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Fraudulent Transactions Detection in Costa Rica: A Growing Concern

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In Costa Rica, a country known for its stunning natural beauty and welcoming atmosphere, property theft has become a growing concern. Despite the National Registry’s mission to “protect recorded rights offering legal security,” fraudulent transactions have been occurring with alarming frequency.

The problem begins with the National Registry itself, which is responsible for recording all title to property in Costa Rica. The registry relies on licensed Notary Publics to draft property transfer deeds, but what happens when these officials are complicit or negligent?

A Recent Case Highlights the Severity of the Issue

A recent case involving a client who owned a property for 25 years highlights the severity of the issue. Despite having clear ownership, the client was sold out from under them due to fraudulent documents filed with the National Registry.

The Notary System: A Vulnerability

Costa Rica’s Notary Public system is based on the civil law system and is used throughout Latin America and Europe. However, Costa Rica’s open system allows any licensed attorney to become a Notary, creating a large pool of potential fraudsters.

In some cases, Notaries have been known to lie about property owners’ presence, revive the dead, or dupe victims into signing fraudulent documents. The victims then begin to pile up as innocent purchasers rely on certified title reports issued by the National Registry, unaware of the initial fraudulent transfer.

How to Prevent Property Theft

To make your property less appealing to thieves, consider these steps:

• Keep undeveloped properties well-fenced and marked with local contact information.
• Regularly check your property title to ensure no registrations have been filed against it.
• Check your property periodically to prevent physical possession by others.
• Place a lien in your favor against the property to deter thieves.
• If purchasing land, consider areas or communities where neighbors or administrators can keep an eye on your property while you’re away.

The Costa Rican Government’s Response

With at least 400 active criminal investigations regarding property theft, it is clear that the issue demands attention. The government must implement policies and procedures to deter and punish this activity, ensuring a safer and more secure environment for property owners in Costa Rica.