Real Estate - Fraud in Costa Rica
Unfortunately, property fraud in Costa Rica is quite common, there are gangs dedicated to looking for properties with certain characteristics to steal them from their legitimate owners. The good news is that Costa Rican criminal law protects the original owners against these attacks, in addition to the fact that it is a crime that is documented. Even so, it will be a long process (years)
Properties at risk:
The properties at risk are usually lands in coastal areas. Properties in hot spots like Tamarindo, Jaco, Nosara, Samara, Papagayo, Santa Teresa, Malpais, Puerto Viejo, and Manzanillo (The last two in the Caribbean coast) are quite desirable. Usually are properties without mortgages.
Owners at risk:
Most real estate frauds are committed against the foreign owner, especially North Americans and Europeans, or are in the name of Corporations, where in most cases the shareholder is a foreign citizen.
How the crime occurs:
Criminals are very creative, and there are many ways in which they commit the crime, we are going to list the most common examples:
Scenario 1: A scammer works with a corrupt Public Notary to grant a false power of attorney to act on behalf of the corporation or person who owns the property, that power is in favor of the scammer or an accomplice, then they sell the property for a price significantly lower than the market price.
Scenario 2: A scammer works with a corrupt Public Notary to transfer the property from the real owner, they transfer the property to the scammer, or sell it directly to a bona fide third-party purchaser, sometimes mortgaging the property.
Scenario 3: A scammer appears before a Notary Public acting as the foreign citizen who owns the property (false IDs are frequently used), transferring the property to the scammer through a simulated purchase.
In all cases, the public deed granted by the public notary (crime of false document) will be presented before the National Registry (crime of use of false document), the National Registry will act believing that the document is true and will transfer the property according to what indicate the deed (scam crime)
In practice, each case is different and should be analyzed by your LAWYER SPECIALIZED IN CRIMINAL LAW to determine if the scammer participated alone, together with the notary, or even with the person who acquires the property and determine if more crimes were committed.
What to do if my property is stolen?
The most important thing is to act fast, hire a CRIMINAL LAWYER (criminal procedure in Costa Rica can be tricky- as for a heart problem you go to a cardiologist – for a criminal problem you must go to a criminal lawyer ) to advise you.
Criminal complaint should be file to the prosecutor's office as soon as possible (in Costa Rica victims can hire private lawyers to represent them in criminal proceedings and in these cases it is highly recommended to do it that way). The criminal complaint should include a motion for a judge to immobilize the property at the National Registry (precautionary measure) in this way it is ensured that the property will not be sold or mortgaged again.
Your lawyer must file a private criminal accusation and a civil action in the criminal process, where he claims the economic damages suffered but the most important thing is that he requests that the falsity of the public document through which the property was stolen be declared by the judge, that way he can get your property back.
Be patient, the criminal process will take several years, and can be resolved through negotiation or in court.
What happens if I bought a “stolen” real estate?
The situation is complicated for the ones who purchase stolen property unaware, at the end of the procedure they will be forced to return the property to its rightful owner, however, what they can do is collect damages from those who scammed them.
In a preventive way, you can hire a lawyer to monitor your assets, or you can hire a registry alert, a service that costs around $10 a year on the National Registry page, and send you an email if someone files a document that affects your property. That gives you enough time to act.