Many expats say that property fraud bill does not go far enough

Expat reactions were mixed over a proposed law that would freeze suspicious property transfers to reduce fraud. Although the measure appears to be the first to recognize the serious problem of land titles here, most who commented on the news story said that the bill does not go far enough.

According to the bill, the Registro Nacional would have the power to investigate suspicious property transfers and freeze them for a time. There also would be access to a judicial data base that presumably would hold the names of crooked lawyers and notaries.

Notaries are presumed to act with honesty when they record the transfer of a property. In Costa Rica, that transfer does not have to contain the signature of the seller, and the notary creates what amounts to a deed. This is filed with the Registro Nacional.

If the notary creates a fake property transfer, there is no way for the Registro to know this unless the individual had been charged with doing the same thing in the past.

One expat also questioned the estimate of the prevalence of property frauds offered by the bill’s sponsor, Rafael Ortiz Fábrega. The lawmaker said that just 1 percent of the transactions at the Registro are fraudulent. The expat said that he personally has had two cases of fraud involving his properties during the time he has been in Costa Rica.  Even so, 1 percent would be a large number.

Lawmakers have generally ignored the problem of property fraud for years. Some skeptics claim this is because many are lawyers and that lawyers are the ones who profit from the fraud one way or another.

Others point out that the lawmakers have done nothing to fight another type of property fraud, the invasion by squatters.

Someone who owns a home in Costa Rica probably will not be targeted by fraud while still living. And there are ways to protect individual homes. But large ranches or other tracts of underdeveloped land are ripe for invasions or fraud at the Registro. This has created a drag on investment.

Even politically aware Costa Ricans are victims. One man who represented the country at the United Nations found that one of his ranches had been transferred without his knowledge to an unknown party.

Presumably the crooks were hoping that the elderly diplomat would die, and then they could emerge as the property owner along with some fabrication about when the man sold them the property. On a more ominous note, some persons have died violently, and the heirs learned that the dead individual’s property had been transferred to others shortly before the death.

Over the last 15 years, U.S. Embassy officials have been largely silent on the problem, although there is one woman there who sends condolence emails when expats experience a judicial reverse.

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