Let's start with reassurance: thousands of foreigners buy Costa Rican property every year through clean, boring, well-documented closings, protected by the same fee-simple ownership rights citizens enjoy. The horror stories are rare — and they are almost never random. They cluster around the same handful of warning signs, visible in advance to anyone who knows what to look for. Here are the nine we never ignore.
1. No Water Letter — or a Vague Story About One
Water rights are the quiet king of Costa Rican real estate. A property without documented legal water can be unbuildable and nearly unsellable. If the answer to "where's the water letter?" involves the words "in process," "the neighbor shares," or "easy to get later," the price should drop or your interest should.
2. The Seller Isn't the Registered Owner
The National Registry is public and definitive. When the person selling isn't the person on title — a cousin "handling it," a corporation whose representative can't produce authority documents — everything must be verified before a colón moves. Legitimate intermediaries exist; so do people selling property they don't own.
3. "The Survey Is Old, But It's Fine"
Boundaries here are defined by the registered plano catastrado, not the fence line, not the hedge, and not the seller's arm gesturing toward a ridge. Discrepancies between the registered survey and occupied reality are exactly the kind of problem that's cheap to find now and brutal to fix later. Walk the boundaries with a surveyor. Every time.
4. A Price That's Suspiciously Beneath the Market
You know the neighborhood's price band because you've been shopping it. When something lists dramatically below it, there is a reason — title trouble, water trouble, access disputes, or a seller who needs speed more than money (which can be legitimate, and your attorney will find out). "Too good to be true" is not a folk saying here; it's a due-diligence category.
5. Maritime Zone Confusion Sold as Beachfront Certainty
Within 200 meters of high tide, most coastal land is concession property — leased from the municipality, with real restrictions on foreign majority ownership until five years of residency. It can be done properly. But a listing that blurs "titled" and "concession," or a seller who waves the distinction away, is inviting you into the single most misunderstood corner of Costa Rican property law. Demand clarity in writing.
6. Squatter History Nobody Mentions Until You Ask
Costa Rican law gives occupants of neglected land accumulating rights over time. Raw land that's been unattended for years deserves specific questions: Who watches it? Any occupation history? Fences, caretakers, regular inspections? Absentee-owned acreage without a caretaking arrangement isn't automatically poisoned — but it needs a lawyer's eyes and honest answers.
7. Pressure to Skip the Escrow
Licensed escrow companies exist so that your money and the seller's title cross the finish line simultaneously. A seller or facilitator pushing direct transfers, cash portions "outside the closing," or urgency that conveniently precludes escrow is describing a transaction you should walk away from — politely, and quickly.
8. Corporate Shares Instead of a Property Transfer — Without Diligence
Buying the corporation that owns the property is common and legitimate here. But share purchases inherit the corporation's entire history: debts, liabilities, tax standing. Done right, with a full corporate audit, it's routine. Offered as a shortcut to "make it easy" without that audit — red flag with a flagpole.
9. Everyone on the Seller's Side, Nobody on Yours
The listing agent works for the seller. The seller's lawyer works for the seller. Costa Rica's system works beautifully for buyers who bring their own independent attorney to run title searches, verify surveys, and read what gets signed. A deal that discourages you from independent counsel isn't a deal; it's a script.
The Beautiful Boring Truth
Every one of these has a clean counterpart: registered owner, current survey, water letter in hand, escrow-run closing, independent lawyer, market-honest price. That describes the overwhelming majority of transactions — including the $150,000+ purchases that qualify buyers for investor residency under the window closing July 14, 2026. Vigilance isn't paranoia here. It's just the price of paradise, and it's payable in patience.
FAQ
Is title insurance available?
Title insurance products exist in Costa Rica through international providers; many buyers rely instead on rigorous attorney-led title review. Discuss both with your counsel.
How long does proper due diligence take?
Typically a few weeks — title, survey, water, corporate audit if applicable. The calendar cost of skipping it is measured in years.
Who pays closing costs?
Negotiable, often shared. Budget 4–5.5% total including the 1.5% transfer tax.
Want a second set of eyes before you commit? Send us the listing. We'll tell you what we see — including the flags — and connect you with independent attorneys who work for you, not the seller. Free consultation.
General information, not legal advice.