Costa Rica Consumer Protection Law to Cover Real Estate
New Real Estate Consumer Protection
Under the new law developers who wish to offer pre-construction sales contracts must demonstrate their financial capacity before the Ministry of Economy, Industry and Commerce (MEIC). Based upon those filings MEIC may impose performance bond guarantees.
Developers who wish to offer property such as condominiums and homes with a future delivery date are now obligated to register with MEIC. They must provide audited financial statements and full corporate disclosures. The financial report must disclose any financial obligations that are encumbering the property such as mortgages or promissory notes. The law provides an 8-day “cooling off” period by which a purchaser may rescind a contract without liability. A copy of the real estate contract that will be used for the sale of property must also be provided to the MEIC for prior approval.
Developers must provide full details and guarantees in the form of a performance bond. “Performance bonds are commonly used in the construction and development of real property, where developers procure such bonds in order to guarantee that the value of the property to be delivered will not be lost in the case of any unfortunate events and is not in fact delivered for whatever reason that the buyer will at least receive compensation for his lost costs.”