Real Estate Fraud in Costa Rica

It is reported that up to 30% of Costa Rica's real estate offers may hide some sort of fraud.

Tuesday, August 18, 2009

Before considering investing or purchasing a property in Costa Rica, two key issues must be taken into consideration:

-Costa Rica's complex legal system is based in the old Napoleonic Code, and its general motto is "If there's no blood, there's no damage". Taking a civil issue to the courts costs a lot of time and money.

-In the U.S., to be a real estate broker one must be registered and take an exam, as opposed to Costa Rica, where anyone can operate as real estate broker, agent, or intermediary.

Because of this, when buying a property in Costa Rica, it is important to take the following precautions:
1- Be warned if the property looks abandoned. These properties are the most "attractive" to fraud schemes, as their owners do not frequently control the legal status of their assets.
2- If the broker seems foreign, ask him for his residence permit or his identification document.
3- Check the Internet to see if there are complaints or police reports against him.
4- Get advice from a real estate attorney.
5- Be cautious. Specially for not spending money in high-value properties that will begin construction in more than two years...

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Ponzi Scheme with Costa Rican Investments?

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The text of the lawsuit establishes that during the past six years, Paragon Properties of Costa Rica, a Hollywood-based company, received money from over 900 U.S. retirees, promising to build residences in various Costa Rican communities, insisting that unhappy investors would receive 100% of their money back.

Real Estate Hints to Revival in Costa Rica

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However, as the year comes to an end, there are recovery signs in the market, driven mostly by a sharp reduction in property prices.

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