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Post Closing Issues by Attorney Roger Petersen

by attorney Roger Petersen for the Easy Times

Post Closing Issues by Attorney Roger Petersen

III. Post Closing Issues of Costa Rica real estate.

1. Dealing with Utilities on the Property in Costa Rica that you are buying.

(a) Changing the Name on the Utility Bills

Once the property transfer title is recorded it is the responsibility of the property owner to transfer utilities from the name of the Seller to the name of the Buyer. Although this would appear to be a simple task, in Costa Rica it is not. In many cases a telephone line cannot be transferred and the Buyer must use the telephone line and leave it in the name of the Seller.

Where possible the Seller should issue a Power of Attorney to the Buyer so that they can issue instructions to the phone company regarding the use of the telephone line. If the Buyer wants the electric and water bills changed to their name they can do so but the Attorney will charge for this service since it is not part of the legal closing service. Ideally the real estate agent should assist the Buyer in completing these processes.

waterbillsm.jpg(b) Delivery of Utility Bills to the New Owner of the property.

The Real Estate Agent should obtain copies of the utilities installed on the property [electric, water, telephone, cable TV, Internet] to determine where the bills are being mailed or delivered. Some property owners have the bills sent to the property while others may have it sent to a post office box which the own. If they go to a Post Office Box and the Seller does not need it anymore then try and get them to give the Box to the Buyer as part of closing. This will insure that there are no interruption in services which could be a great inconvenience to your Buyer.

2. The Local Municipal Government.

Your property deed is recorded in the Property Section of the National Registry which is the official national registry for recording titles to property. However, you pay property taxes at your local Municipal Government.

BienesInmueblessm.jpg

To this date the two are not automatically connected. In other words just because a sales deed is recorded in the National Registry does not mean the Municipal government where the property is located knows about it.

It is the responsibility of the Buyer once they receive the recorded property transfer deed back from the closing Attorney to hand carry a copy to the Municipal government to inform them of the transfer so they can collect property taxes from the new owner.
When the Buyer approaches the Municipal government to update the ownership information they may be required to fill out a Declaration of Property Value [Declaracion de Bienes Inmuebles].

The property tax law requires that this form be filled out by property owners every five [5] years. This form is the basis used by the Municipal Government to establish the value of the property which in turn is used to calculate the property tax.

At present the property tax rate is 0.25% of the value of the property and it is paid quarterly.

Some property owners elect not to fill out the form and by not doing so the Municipal Government has the right to conduct an appraisal of the property and set the property tax.

By Real Estate attorney Roger Petersen, author of the book The Legal Guide To Costa Rica and the Complete Guide to property taxes and the new Luxury Home Tax in Costa Rica.

Feel free to leave your comments on this blog.

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I DO want to remind our readers that we appreciate any referrals you can send us. I know you all meet people on the plane, in the supermarket, at yoga, at the gym, at the beach or in a restaurant. Please remember the American European real estate Group’s agents when you talk about your home in Costa Rica when you meet someone who wants to purchase one, we appreciate it.

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Ivo Henfling

Ivo Henfling started the American European Real Estate Network Costa Rica in 1996 and has grown it into the largest Costa Rica MLS with thousands of up to date property listings for sale and for rent. Ivo has written hundreds of articles about real estate and living in Costa Rica for The Tico Times and other online informational sites.

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