For Costa Rican developers, property owners and real estate companies, attracting international buyers involves much more than marketing a property or development abroad.
Foreign buyers and their advisors typically expect clear documentation, reliable title information and contractual structures capable of supporting a Due Diligence process.
Preparing the project in advance can help facilitate negotiations, reduce friction during the transaction and strengthen confidence among buyers, Realtors and advisors.
Keep title documentation in order
Before actively marketing a property or development to international buyers, sellers should carefully review the legal and registry status of the relevant assets.
Among other matters, it is important to have clarity regarding:
- ownership;
- liens;
- mortgages;
- easements;
- restrictions;
- cadastral information;
- condominium regime, where applicable; and
- any special circumstances affecting the property.
This information should be readily available and capable of being clearly explained to the buyer and their advisors.
An inconsistency discovered late in the negotiation may delay closing or affect confidence in the transaction.
Contracts that build confidence
In real estate developments, reservation, option or pre-sale agreements are often among the first legal documents received by a potential buyer.
For a foreign investor, these documents are also an initial indication of how the project has been structured.
Contracts should therefore clearly address matters such as:
- property description;
- purchase price;
- payment schedule;
- closing conditions;
- developer obligations;
- treatment of deposits;
- refund conditions;
- delivery timelines; and
- remedies in the event of default.
Clear contractual terms help manage expectations and can contribute to greater confidence throughout the transaction.
Prepare for Due Diligence
An international buyer will likely engage legal counsel to review the property, project and transaction structure before committing capital.
The seller should anticipate that process.
Having documentation organized from the outset allows the project team to respond more efficiently to information requests and identify potential issues before they become contingencies during the negotiation.
The objective should not simply be to answer the buyer’s questions, but to enter the Due Diligence process with an organized and reviewable structure.
Consider the international Realtor
Many foreign buyers are introduced to Costa Rica through international Realtors and brokers.
These professionals also need to clearly understand what is being offered, how the project is structured and how the acquisition process will work.
A project targeting international buyers should provide clear information regarding:
- ownership structure;
- development characteristics;
- purchase process;
- available documentation;
- commercial terms; and
- key steps leading to closing.
The easier it is for the Realtor to understand the transaction, the better positioned they will be to explain it accurately to their clients.
Understand both sides of the transaction
Preparing a project for international buyers requires understanding the seller’s objectives while anticipating the questions that buyers and their advisors are likely to raise.
Early legal review can help reduce uncertainty, strengthen documentation and support a more efficient negotiation.
For developers and property owners, this preparation can also become a commercial advantage: a legally and documentarily organized project can inspire greater confidence in the international market.
Author:
Mauricio Ramírez Rodríguez
Attorney – CENTRAL LAW in Costa Rica
Certified International Property Specialist (CIPS) – National Association of REALTORS® (NAR)
At CENTRAL LAW in Costa Rica, we advise developers, property owners, investors and real estate companies on the legal structuring of projects aimed at both local and international markets.
Our regional presence also allows us to support investments and transactions involving Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama and the Dominican Republic.
Disclaimer: This content is for informational purposes only and does not constitute individualized legal advice.
