How to protect your property
If you have a piece of land or vacant property in Costa Rica you will need to protect it from squatters and fraud. Vacant and empty land or homes present an easy opportunity for thieves and white-collar criminals. When buying, selling, and maintaining your property you must do your diligence to protect your investment.
If you have a piece of land or vacant property in Costa Rica you will need to protect it from squatters and fraud. Vacant and empty land or homes present an easy opportunity for thieves and white-collar criminals. When buying, selling, and maintaining your property you must do your diligence to protect your investment.
You can do this by not leaving it unattended and having regular groundskeeping and cleaning. Make sure you have a fence and proper clear signage so that there is no dispute on the land. Always have an alarm system on your house and have it serviced regularly. You may want to have a backup generator for frequent power outages or “blackouts”.
When renting your home:
Prepare a lease using a lawyer and make sure it is iron clad, there are system abusers everywhere, so do your diligence
Be aware of the landlord-tenant laws in Costa Rica-know your rights and responsibilities
Do a thorough inventory and inspection before and after renting.
Do a background check on potential renters. Hire a PI or run their ID in the system, trust us, it may save you a headache in the future.
Protecting your home from fraud:
You can take a Property Alert service, where they will monitor your property title and alert you if anything has changed in your title given by the National Register. Do your own due diligence on this because the registry takes no responsibility.
Check the title of your property online once a month. It takes only a few minutes.
Register a Cédula Hipotecaria on your property. This is much like a mortgage you own, to protect the property from being sold or mortgaged by anyone else. Ask your attorney about the Cédula Hipotecaria. If you don’t have an attorney, check the list of legal counsel we recommend.
Be Mindful of Currency
Surfing the dollar.Make sure your rental leases are in Costa Rican colones currency. If you write your contract in any other currency-USD, Euros, etc, then the rate stands for the entire duration of the contract and no increases may be made. So if you have a tenant for 3-5 years and the contract stipulates the rent being paid in USD, you will not be allowed to adjust it for annual inflation. If you write your contract in CRC colones, then you are entitled to increase the rent annually up to 10%. Concerning housing rentals, in Costa Rica, the agreed rent in colones can only be updated at the end of each year of the contract; In the case of rents agreed to in a foreign currency (ie US dollar or Euro), the agreed amount will be maintained for the entire term of the contract, without the right to readjustment.
Make sure your rental leases are in Costa Rican colones currency. If you write your contract in any other currency-USD, Euros, etc, then the rate stands for the entire duration of the contract and no increases may be made. So if you have a tenant for 3-5 years and the contract stipulates the rent being paid in USD, you will not be allowed to adjust it for annual inflation. If you write your contract in CRC colones, then you are entitled to increase the rent annually up to 10%. Concerning housing rentals, in Costa Rica, the agreed rent in colones can only be updated at the end of each year of the contract; In the case of rents agreed to in a foreign currency (ie US dollar or Euro), the agreed amount will be maintained for the entire term of the contract, without the right to readjustment.
In Costa Rica, readjustments in housing rentals is a set of rules that regulate all property rental and lease contracts, contained in Law No. 7527 “General Law of Urban and Suburban Leases” (Ley General de Arrendamientos Urbanos y Suburbanos – 7527), specifically to article 67 of the so-called Tenancy Law (Ley del Inquilinato). As tempting as it may be to draw up a contract in foreign currency due to the instability of the CRC colones, be aware that the economy in Costa Rica is strong and the colones has climbed in value steadily over the years. Get legal advice before drawing up any contract. We want to share the tip that only leases in CRC colones can be adjusted for inflation annually.