Costa Rica Property Scams: How to Protect Yourself

Costa Rica property scams are real. They are not rare. And they disproportionately target foreign buyers who are purchasing remotely, who do not speak Spanish fluently, and who are relying on people introduced to them through the deal itself.

This is not meant to discourage anyone from buying in Costa Rica. It is meant to name the specific patterns that cause losses and explain the steps that prevent them. Foreign buyers who get defrauded almost always skipped something that was skippable. The good news is that the prevention is not complicated.

Why Foreign Buyers Are Targeted

A foreign buyer purchasing a $400,000 property in Costa Rica from the United States faces structural disadvantages that a local buyer does not. They cannot easily visit the property on short notice. They do not have personal relationships in the local legal and real estate community. They cannot read official Spanish documents without translation. They are often emotionally committed to a specific property or region before the legal process begins.

Fraudulent sellers and dishonest brokers understand this. The schemes they use are designed for buyers who trust the people presenting the deal rather than independent verification processes.

The Most Common Scams and How They Work

Selling Land That Is Not Theirs

The most direct form of property fraud involves a seller who does not own the land they are listing. This happens in two forms. In the first, someone creates fraudulent registry documents that appear to show ownership. In the second, someone with partial rights to a property presents themselves as the sole owner and conceals co-owners or legal disputes.

The defense is an independent title search through the Registro Nacional conducted by your own attorney. Not documents handed to you by the seller. Not a verbal representation from the broker. The actual registry record pulled by someone who represents you.

Undisclosed Liens and Mortgages

Properties in Costa Rica can carry mortgages, liens from unpaid debts, and legal judgments registered against them. Sellers do not always disclose these voluntarily, particularly when they are motivated to close quickly. A buyer who completes a purchase without a full encumbrance search can inherit a mortgage on a property they just paid cash for.

This is not hypothetical. It is one of the more common legal problems our clients come to us about after a purchase they completed without thorough due diligence. A complete lien search is a standard part of legal review. If your attorney does not confirm they are running one, ask explicitly.

Boundary and Survey Fraud

The property being sold does not always correspond to the land described in the title. A seller may show you a beautiful piece of land, but the titled parcel is adjacent to it, smaller than it, or shaped differently. The physical land you walk and the legal description in the registry are two separate things.

Survey verification is the fix. Your attorney should compare the registered plano catastrado, the official survey on file, against the physical boundaries on the ground. Ideally, a topographer visits the site and confirms the corners. This is especially important in rural areas where fences and physical markers do not always correspond to legal boundaries.

Maritime Zone Misrepresentation

Costa Rica's maritime zone law reserves the first 200 meters from the high tide line as public land. Property within that zone cannot be privately titled. It can only be held through a concession granted by the relevant municipality. But the reality on the ground is that some sellers describe concession properties as titled, and some buyers purchase what they believe is private land before realizing the difference.

The consequences range from significant to catastrophic depending on the concession status. Our article on Costa Rica's maritime zone law explains the full framework. The critical point here is that maritime zone status must be independently verified for any property within walking distance of the ocean, not accepted on the seller's word.

Squatter Occupation Claims

Costa Rica's possession rights framework means that individuals who openly and continuously occupy land without the owner's opposition can, in some circumstances, develop a legal claim to that land over time. If a property has been left unmanaged and a third party has been farming, building on, or otherwise occupying part of it, that occupation can become a legal complication.

This is one reason physical scouting before purchase matters. A title search tells you what is legally registered. A site visit tells you what is actually happening on the ground. The two do not always match.

Developer Pre-Sale Fraud

Pre-construction purchases carry specific risks. A developer may take deposits on a project that was never properly permitted, is financed with money from early buyers rather than secured construction financing, or is owned by an entity that has no intention of delivering the project as described.

For pre-construction, legal review must include verification that the developer holds proper permits, a review of the purchase contract by your own attorney, and ideally some history of the developer completing prior projects. Never wire pre-construction funds to a developer without an attorney reviewing the escrow arrangement.

The Two Rules That Prevent Most Problems

Property fraud in Costa Rica is largely preventable with two consistent practices.

Rule one: hire your own attorney before you engage with any deal. Not the broker's attorney. Not the developer's in-house counsel. Your own independent attorney who you found, retained, and paid directly. They should answer only to you. Our guide on how to hire a real estate attorney in Costa Rica covers how to find one and what to ask.

Rule two: do not wire money before due diligence is complete. Any urgency applied to deposit wires before legal review is finished is a red flag. Legitimate transactions allow time for proper verification. A seller who tells you the deal will fall apart if you do not send funds immediately may be telling the truth, but more often this is pressure designed to skip the steps that would expose the problem.

Red Flags Worth Knowing

These are patterns that should give you pause regardless of how credible the rest of the presentation looks:

• The seller is in a hurry. Legitimate sellers are not harmed by a two-week legal review. Fraudulent sellers are.
• The price is significantly below market. In markets where everything is priced to sell, a deal that looks dramatically better than comparable properties usually has a reason.
• All your contacts were introduced by the same person. If your broker, attorney, and inspector all came from the same referral chain, your verification process is circular.
• Documents are only available as scans or photos. An attorney pulls primary documents directly from the registry. Scans from a seller are not a substitute.
• The seller cannot meet in person or on video. Fraudulent sellers sometimes maintain the transaction entirely at a distance to avoid identity verification.

What Independent Scouting Catches

Legal due diligence and physical scouting address different risks. Legal review tells you what the registry says. Physical scouting tells you what is happening on the ground.

We have visited properties where the titled boundary ran through the middle of a structure. Properties where a neighbor openly claimed part of the listed land and had been farming it for years. Properties where the road access shown on the listing did not exist in the form described. Properties where the view or location that justified the price did not survive an honest visit.

None of these problems appear in a title search. They appear when someone goes and looks.

If you are seriously considering purchasing property in Costa Rica and want independent eyes on the ground before you commit, The Buyer's Office exists for exactly this. Book a free 30-minute call with Marcelo at the link below.

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