Title Question

[Marianella]

We are looking to buy a property in the Quepos area but it appears that the land does not have a title "yet".  here is the info I have gotten from the seller.  Can you advise me on the risks of buying without getting a title? Thanks so much. Marianella

My comments: Although I am a Tica, I am not familiar with the local legal ramifications of owning a piece of property with “no title”.  We understood that the title was in process, so can you tell us if this is a matter of time? And how long? or is there a possibility that the title will never happen?

Seller Comments: Nothing can be guaranteed, of course.  However, with this property, the lawyers have had it for some time and have put a good bit of effort into getting it registered.  I've been close to the process since its inception and have heard nothing but what is normal in the process.  And, the lawyer although slow, is the most competent lawyer I know in Costa Rica (and he is very conservative).  So, I would ultimately rely on his opinion as to the odds of the property ultimately not being titled.  But to answer your question with my opinion, I would say it is just a matter of time.  About a year more I would guess would be a conservative estimate.  The lawyer has said he does not think he can get it by Christmas which is a deadline for the seller.
Just for your information, a title here is based on possession.  Once a possessor (or a chain of buyers who take possession) has "possessed" a property for more than 10 years, the property may be registered through a process.  This property has over 30 years of verified possession.  The biggest problems in the titling process usually arise from fence disputes but this property already has a registered plat map for which the neighbors have signed off in agreement.  So, it looks good.  Again, the lawyer should be the ultimate arbiter in such a decision.
 

[Russ]

Hi Marianella,

You have every right to be concerned and if you are serious about this process you should contract with your own personal lawyer who is familiar (experienced) in the titling process who can review all of the documents and ascertain their validity and to what point in the process the sellers lawyers have progressed.  

You can also verify what they are saying by reviewing the plan # number online.  

National Registry Costa Rica

You click on the "consultas" button, then "Bienes Inmuebles".  From there you have to play around a bit with the owner's cedula and plan number, but likely choices are:
- Información Posesoria y Titulación de vivienda campesina
- Por Número de Finca o Concesión
- Por Nombre Físico o Nombre Jurídico
- Por Número de Identificación
- Indice de Fincas en Tomos por Número

Another point of concern is at what price are you buying the property?  You can't pay full market value for the property when it has no title as yet since you can't compare apples and oranges.  You have to make sure what the price is of similar land in the area in a similar state.  

That said, the seller is being honest with you and it is possible to buy property that is registered in the National Registry as possession rights.  In fact, many properties in rural areas only have this type of title.  Possession rights can be bought and sold, transferred, inherited etc.

So most people never bother to register the full title, which appears to be the case here.  One characteristics that full title has that possession rights don't is that you can mortgage the property, and you probably shouldn't rent it out for any extended period. Otherwise you are pretty much in the same position whether you have normal title or title as "possession rights".

So you may purchase the possession rights and continue with the titling process. You eventually will appear before a judge, with witness like the neighbors the seller mentioned.  At court you must prove uninterrupted possession for a minimum of 10 years.  The possession must be public, permanent, peaceful, undisputed and productive.  

Getting title registered on possession property can cost $5000, or more, and take 2 years or more.

So it appears that your seller is being forthright, so while you should be concerned, careful, and  and do your homework, it also appears that you aren't experiencing anything out of the ordinary either.
 

[Marianella]

Russ,

I am impressed with your quick and thorough reply.  Thank you very much!  We will continue to do our homework and see where it takes us.  
The price of the property is $69.000 for 41 acres +/- betwen Quepos and Dominical , it has a nice ocean view and mountains around, it also has a small waterfall and although access to the property is by 4x4, this is only for the last 1km, as the rest of the way is on good roads.  There is no elctricity, but it is about 2 km away.
The property has a couple of flat areas (football field size) and the rest is steep terrain, good for reforestation, etc.  What do you think about the price? does it compensate for the risk of not having the title?  Thanks again, Marianella

[Russ]

Well I'm happy to help as much as I can, but it is hard for me to say anything about the price.  In general it seems pretty fair.  You are paying about $4000 per hectare (16 hectares in 41 acres).  That is in line with farmland in many areas of Costa Rica.  Uncleared rainforest runs from $1000 per hectacre and farmland is always worth more (to date).  So you like the property, it sounds like a pretty farm to me, and the area has a pleasant terrain in general with pleasing coastal and mountain views.

On the downside you have the fact that it is currently titled as possession rights.  That the road between Quepos and Dominical is unpaved, while the rest of the coast is paved.  ( so you know what the priority will be for future development.    You have no electricity and poor access.  1 kilometer of bad roads doesn't sound like much, but once you are living there you might find it more annoying.

So it is hard to say, not knowing the area and having never seen the property, but if you think the price is fair and you can afford it I don't see that you're getting gouged either. You would probably be hard pressed to find a farm with that acreage at a much lower price than that in any case.