When a foreign investor wishes to venture into the Costa Rica Real Estate market, one of the first questions that come up is how the legal system operates, how it protects investors, and how it could facilitate or hinder the achievement of desired projects. Costa Rica has experienced in recent years the incursion of big names in the industry, such as Four Seasons, Marriott, Wyndham Garden, St. Regis, and others, as well as serious developers, who are usually accustomed to the concept of escrow deposits, and dealing with escrow agents. On the other hand, it's not uncommon for less-sophisticated land owners to be completely unfamiliar with the concept of an escrow agent. This is truly a shame, because an escrow deposit offers security for all parties involved in a transaction, when the agent is registered as an administrator of third-party funds.
An escrow deposit maybe defined as a money deposit entrusted to an agent, usually by way of a bank to bank wire transfer, to be kept in custody, and to be managed and disbursed according to a real estate agreement.
The escrow agent is a good-faith, impartial participant, and the funds become his responsibility when they are received and accepted. The main interested parties, of course, are the depositor and the beneficiary of such a deposit. The buyer is also guaranteed that the conditions specified in the contract will be satisfied prior to any funds being released, which means that both parties are more fully protected. The seller, in turn, is also ensured that the buyer does in fact have the financial ability to complete a specific transaction, and thus he feels that the time and effort invested in preliminary agreements are worthwhile.
It is common for the agent to be a law firm. In all cases, escrow agents must be registered with the governmental entity called SUGEF, which is an acronym for Superintendencia General de Entidades Financieras, the public entity that supervises banks and administrators of third party funds, and it is mandatory for agents to be properly registered with this institution, under the law against money laundering and drug trafficking, Law 8204.
If you need a list of Escrow agents we worked with in Costa Rica, please contact us at firstname.lastname@example.org
Article by Lic. Arcelio Hernandez Mussio