A lawmaker who is a presidential candidate has proposed a law that would let the Registro Nacional freeze transactions that are suspicious.
The measure, presented at the legislature Thursday, is designed to reduce property fraud.
The lawmaker, Rafael Ortiz Fábrega, said on his political party’s Web site that only about 1 percent of the country’s property transactions are fraudulent. But prime targets for crooked real estate agents, lawyers and notaries are expats, many of whom live outside Costa Rica, A.M. Costa Rica has said.
The bill has the support of the Registro Nacional, the Dirección Nacional de Notariado, the Tribunal Registral Administrativo and prosecutors at the Ministerio Público, said the summary on the Partido Unidad Social Cristiana Web site. Ortiz is not a run-of-the-mill lawmaker. He was president of the Asamblea Legislativa in 2015 to 2016, and he has announced as a presidential candidate.
The bill was referred to the Comisión de Seguridad y Narcotráfico due to the organized crime dimension.
“Today we have an opportunity to see a project of law that is the result of an effort of communications and cooperation between distinct actors involved in the responsibility of offering to Costa Ricans a system of registral security of real estate in accord with the times and demands of modern society,” Ortiz was quoted as saying by the party. He used the term proyecto de ley, which is what bills presented for possible action to the legislature are called here.
There are two kinds of property theft. One is where someone moves illegally onto the land of another and tries to gain possession by staying there. The second, which is targeted by the Ortiz measure, is white collar fraud.
The fraud involves lawyers and notaries creating false paperwork that transfers the title of property to a confederate. Once named as the owner, the confederate can sell the property or saddle the property with a large mortgage and keep the cash.
As A.M. Costa Rica has pointed out repeatedly, reversing such an illegal transaction can be costly and lengthy. In addition, if the stolen property is then
sold to someone who is identified as an innocent third party, the transaction is final, and the sale can never be reversed. Frequently innocent third parties are not so innocent.
Prosecuting such a case is difficult because the notary whose name appears on the property transfer usually tells a judge that his documents and protocol book have been stolen or some other fabrication. Criminals have been known to avoid prosecution by making a small financial settlement with the victims.
The measure put forward by Ortiz would not prevent all of these frauds, but the Registro would be able to investigate and deny a transfer in suspicious cases.
Although A.M. Costa Rica has stressed frauds perpetrated on expat residents or foreign property owners, most of the victims are Costa Ricans. A typical case would be that of a recently widowed woman who finds that her property is owned by someone else. Frequently she does not have the funds or the business sense to take quick action.
Property thieves are adept vultures who seek out properties where an owner just died. They then fabricate a story about how the dead individual just sold the property. That happened to one European woman whose husband was reported to have committed suicide here while she was in her home country. When she returned, another man was in possession of her ranch with the papers to prove ownership.
Despite the estimate by Ortiz, property frauds are so frequent that the Registro maintains a service to notify owners of any activity with their property titles.