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Escrow deposits in Costa Rica
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 karen@karenrealestate.com
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