You are here: Home E-Guide to Real Estate in Costa Rica Chapter 8 - Due Diligence Title Insurance

Title Insurance

Title insurance is a relatively new concept for Costa Rica. Until only recently, it was rather difficult to get title insurance in Costa Rica. It is not required to have title insurance when purchasing a property since the properties are usually purchase by foreigners in cash Now, there are some very good options for obtaining title insurance when buying real estate in Costa Rica. Title insurance is not required when purchasing property in Costa Rica, unless the buyer is obtaining a mortgage for the purchase. However, many North Americans feel a greater sense of security in having title insurance arranged during the purchasing process.

Title Insurance is insurance against defects in title to real property. It is meant to protect an owner’s financial interest in property against loss due to title defects, liens or other matters of public record. Before you purchase your property, the property may have gone through several ownership changes or there are documents lacking proof of the seller’s ownership. Someone along the way may have forged a signature in transferring title or there may be unpaid real estate taxes or other liens against the property. Title insurance covers the insured party for any claims and legal fees that arise out of such problems. Title insurance will defend against a lawsuit attacking the title, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy. Title insurance guarantees that no one else can claim your property thus it also provides the peace of mind that you will not incur unexpected debts from your new property.

In short title insurance in Costa Rica protects against:

  • Invalid documents executed under expired or non-existent power.
  • False assumption of identity of the legitimate property owner.
  • Falsification of documents, legal power, and other papers related to the transfer of property title.
  • Liens or other financial burdens charged to the previous property owner.
  • Hidden heirs of previous property owners.
  • Documents executed by minors of age.
  • Invalid documents delivered after death of previous owner.

However, before you commit to title insurance you should consider Costa Rica has an excellent public registry. A competent attorney can perform the initial title search and explain how to perform this verification and what to look for.

Furthermore your escrow agent can be a lawyer or law firm. All escrow agents must be registered with the Superintendence of Financial Entities (SUGEF), the government body in charge of supervision of financial entities and administration of third party funds. It is mandatory for administrators of third-party funds to be properly registered with this institution. If you escrow agent is registered with SUGEF your funds will be protected and the risk of anything happening greatly reduced.

Stewart Title Latin America is one of the title insurance companies currently operating in Costa Rica.

Stewart Title – Costa Rica – Costa Rica

Phone: (506) 258-5600