The Tico Times English-Spanish Real Estate Dictionary

May 23, 2016
3 Comments

Even if you speak pretty good Spanish, it would be understandable if you thought “traspaso was trespassing, “bienes raíces” were good roots and “catastrado” would refer to a man horribly mutilated. You might think of a “corredor” as a jogger and “servidumbre as serfdom, while scratching your head over “fideicomiso or “gravamen.”

These are just a few of the terms used in the Costa Rican real estate business every day. Real estate lingo can be hard enough to decipher in your own language, let alone in “Tico” Spanish.

But we’re here to help, so we developed this guide to Spanish real estate terms used in Costa Rica. Feel free to bookmark this page for future reference, as you won’t need these words every day, but you can come back next time you’re on the hook for an “enganche.”

Click on any letter below to go directly to that section, or just scroll down.

A |B |C |D |E |F |G|H |I |J|K|L |M |N|O |P |Q|R |S |T |U |V|W |X|Y|Z

 

A

addendum: anexo

An addendum is a separate document that highlights additions or amendments to a purchase/sale agreement. This can be a description of changes in a former agreement, which has to be signed by all parties in the first agreement to be legal. This can also be any legal document that shows proof of title, copies of the IDs of the buyer and seller, a home inspection report, a copy of the survey of the property, wire instructions or anything else that might be important enough to make it part of the purchase/sale agreement.

amenities: amenidades

The amenities of a property are the services, features or facilities in, on or around a property, a condominium or a neighborhood. Those amenities can include a playground, a golf course, a swimming pool, a school, a shopping center or a movie theater, for example. Amenities usually help increase the value of a property.

amortization: amortización

Amortization is the paying off of debt (mortgage) with a fixed repayment schedule in regular installments over a period of time.

amortization schedule: plan de amortización

An amortization schedule is a table detailing each periodic payment on a mortgage. Amortization refers to the process of paying off a mortgage over time, through regular payments.

appraisal: avalúo

An appraisal is an assessment or an estimate of the value of a property. In the real estate sector in Costa Rica, it is customary to appraise a property only when the buyer needs a mortgage, or by court order in case of a legal dispute or inheritance. An appraisal is executed by an appraiser who is registered with the Colegio Federado de Ingenieros y de Arquitectos de Costa Rica and can be used for a legal dispute or a bank mortgage. A seasoned real estate agent will be able to execute a more realistic market value. “Appraisal” in Spanish is “el avalúo” or “el peritaje.” “Appraiser” in Spanish is “el perito” or “el perito valuador.”

appreciation: apreciación

The appreciation of a property is the increase of the value through market demand, or through an upgrade by adding on or remodeling, which will allow you to sell the property for a higher price than you paid for it.

arbitration agreement: arbitraje

All real estate-related agreements should carry an arbitration clause, in the event that any conflict or dispute arises between the parties as to the facts of a default, or the validity, interpretation or meaning of this agreement. Usually arbitration is left to the Center for Arbitration and Dispute Resolution of the Costa Rican-American Chamber of Commerce or a similar organization.

assumable mortgage: hipoteca asumible

An assumable mortgage (an outstanding mortgage that can be transferred from the current owner of a property to a buyer) is very unusual in the Costa Rican real estate market. Banks and lenders in Costa Rica usually oblige you to re-qualify unless the seller’s mortgage agreement shows otherwise.

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B

balloon mortgage: hipoteca globo

A balloon mortgage is usually a short-term mortgage of less than 10 years where the loan balance is paid off in one or more balloon payments (defined as the repayment of outstanding principal at the end of a loan period during which only interest has been paid). Balloon mortgages are seldom used in Costa Rica.

bridge loan: hipoteca puente

A bridge loan is made by a lender to cover an interval between two transactions, typically the sale of one property and the purchase of another. The Costa Rican financial system does not use bridge loans (yet), but as the professionalization of the job market changes, with families wanting to upgrade to larger homes, this is likely to change.

buyer’s agent: corredor del comprador

In Costa Rica it is customary for a real estate office to represent both buyer and seller, unless the property for sale is listed by a different agent than the one representing the buyer. In a few real estate offices that cater to the foreign market, there are buyer’s agents who do not have their own listings and will represent only the buyer.

C

cable TV: televisión por cable

In Costa Rica you will not be able to get cable TV everywhere. Check before you purchase property what cable TV services are available.

caveat emptor: el riesgo lo asume el comprador

Caveat emptor (“Buyer beware”) means buyers need to perform their own checks, inspections and research to ensure the property is as described and worth the purchase price. In Costa Rica “caveat emptor” is not used in real estate contracts. That makes it doubly dangerous for a buyer and obliges you to do your homework before you purchase and to hire the right professionals to assist you.

certificate of title: certificación registral

This is a document that certifies the identity of the person or corporation that owns a property. You can request the certification of title of a property from your lawyer or request it in person or online from the National Registry (Registro Nacional).

closing: traspaso de propiedad

The closing is when ownership of a property is transferred to a new owner, according to the terms of the purchase/sale agreement. The closing occurs either at the closing notary public’s office or at the escrow agent’s office when escrow is involved. The transaction will be recorded in a deed and registered in the National Registry.

closing costs: gastos de traspaso

The closing costs are customarily shared by buyer and seller 50/50 and paid at closing. Closing costs include notary public fees, 1.5% transfer tax, 0.5% National Registry stamp, documentary stamps and duties. Real estate commissions are paid by the seller unless negotiated differently. Buyer pays home inspection fees, the cost for constitution of a corporation if wanted and any new mortgage-related costs. To calculate costs precisely, use this closing cost calculator.

collateral: garantía

Collateral is the property used by the buyer to secure a mortgage, usually the property that is being purchased. If the mortgage is defaulted on, the collateral becomes the property of the lender after a foreclosure.

commission: comisión

The real estate commission in Costa Rica is usually paid for by the seller of the property, at closing, to the real estate listing agent. The commission is a percentage of the purchase price and is negotiated depending on location and property type and a number of other factors. Some real estate agents function entirely as buyer’s broker, and it is not uncommon to see a dual agency in Costa Rica real estate transactions.

commission split: comisión compartida

When the buyer is represented by one agent and the seller by another, there is an automatic commission split. This split is usually a 50/50 split when both agents are fully involved. If one agent just refers the client to the other agent, the referring agent receives 25%. Both agents take care of paying their own brokers or any referrals they have to pay to a third party.

comparative market analysis (CMA): análisis comparativo de mercado

A CMA is used to determine a fair market value of a property for sale, considering size, condition, location, construction quality and amenities. For a CMA you need to analyze and compare what similar property in a similar area sold for in the past, which is very difficult in Costa Rica, as sales prices are not public. A CMA is an in-depth review and analysis of a home by a real estate agent to determine the fair market value of a home.

condominium: condominio horizontal or condominio vertical

A condominium is a legally constituted building or complex of buildings containing a number of individually owned apartments or houses that have legally registered bylaws.

construction loan: préstamo para construcción

When you already own the building lot and only need a loan for the construction of property, a bank will extend a short-term loan (usually 1 year or less). This construction loan is usually released in various stages and will turn into a long-term mortgage once the construction is finished.

contingencies: contingencias

Contingencies are the provisions in a purchase/sale agreement that give the buyer an opportunity to back out of a agreement if certain events or conditions fail to occur (e.g., house does not appraise, inspection issues, etc.). Sometimes a home purchase is contingent on the buyer’s ability to sell his or her existing home, even though that is not common practice in Costa Rica.

corporation tax: impuestos personas jurídicas

The corporation tax was approved in January 2012 and declared unconstitutional in 2016. Unless you have corporation tax pending, check at the National Registry after registration; corporations do not have to pay this tax until the National Assembly approves a new tax law.

counteroffer: contraoferta

This is an offer made after a previous offer has been rejected, either by the buyer or seller. All previous offers are void when renegotiated.

credit report: referencia crediticia

In a credit report you will find the detailed credit history of an individual by a credit reporting agency such as Datum. Lenders in Costa Rica are not yet using a person’s credit score, as they do in the United States.

credit reporting agency: agencia de referencias crediticias

In Costa Rica, there is only one credit reporting agency: Equifax, which carries the name Datum and is regulated by the Superintendencia General de Entidades Financieras (SUGEF). It collects and sells consumer credit history information to those who need it.

credit score: puntaje de crédito

A credit score is a numerical rating calculated from your credit report that helps lenders determine your credit-worthiness based on your past history, payment record and current financial status. The credit score system is not used by the local financial institutions (yet).

D

deed: escritura de traspaso

This is the document that transfers ownership of property from the seller to the buyer, written up by a notary public in his “protocol” and accepted by the National Registry.

depreciation: depreciación

Depreciation is the loss in value of a property because of its age and deterioration or because of a bad economy. If the home has depreciated below the existing loan amount, you have negative equity.

disclosure: obligación a informar

In some countries the seller is obliged by law to disclose major physical defects on the property for sale, such as electrical, plumbing, roofing and flood zone issues. Costa Rica does not have disclosure laws.

down payment: pago inicial

When buying a property from a developer, you will have to make a 20% down payment to be able to receive an 80% mortgage from a financial institution and take the property off the market. This down payment is always accompanied by a formal option to purchase. This is essentially your deposit on the property you want to buy.

due diligence: debida diligencia

Due diligence is checking all aspects of the country, the location you want to live and the property itself before buying it to ensure it is structurally sound and to your liking.

E

earnest money: arras or enganche

Earnest money is used to show good faith to the seller of a property, customarily 10% of the agreed sales price, unless negotiated differently. In Costa Rica, it is customary for the seller to receive the earnest money, though this is a bad practice. We recommend the use of an escrow agent to hold the earnest money until closing for a safe transaction. The option to purchase/sale agreement describes what happens to the earnest money if either party does not close.

easement: servidumbre

An easement is a right of land use by someone who does not own that part of the property. This is used for driveways or power lines, to allow wild animals through, to prevent the cutting of trees, for water lines or as a result of an agreement on a certain view.

encroachment: invasión

Encroachment occurs when a neighbor builds on your property without your permission. The most common encroachment is fencing.

encumbrance: gravamen

An encumbrance is a claim, a liability or a lien on a property. Your real estate agent should check the title when the property is listed and your attorney should do a title check when you sign the option to purchase/sale agreement and again at closing, so that any encumbrance is identified before closing.

escrow: fideicomiso

Earnest money should be deposited in escrow, a third party, as well as the rest of the closing funds, to secure a smooth transaction. Escrow in Costa Rica is regulated by the Superintendencia General de Entidades Financieras (SUGEF), and few attorneys or title companies manage escrow accounts. The escrow fee is part of the closing costs.

escrow agent: fideicomisario

An escrow agent is the person or firm that takes care of escrow agreements for a fee.

F

fair market value: valor del mercado

This is an estimate of a property’s market value, based on what a buyer can expect to pay for a comparable property in a competitive market. Fair market value is not used in Costa Rica for lack of data of all comparable property, as sales prices are not public information.

finance charge: gastos de formalización

The finance charge is always paid by the buyer to secure the mortgage and consists of an origination fee and service charges by the lender.

financing: financiamiento

Financing refers to the funds that come from the lender to pay for a property, typically in a mortgage.

first mortgage: hipoteca en primer grado

This is the mortgage that is first in line on a same property and will have the first right of foreclosure if loan payments are not made on time.

foreclosure: remate

This is the legal result of a defaulted mortgage, in which the lender takes possession of the property.

H

home equity loan: préstamo con garantía hipotecaria

This is a loan that allows homeowners to borrow against the equity in their home for investments that are not necessarily related to the property put up as collateral. This is a line of credit that creates a second mortgage on the property. Financial institutions in Costa Rica do not offer home equity loans.

homeowners’ association (HOA): asociación de propietarios o condóminos

An HOA is an organization of homeowners in a condominium that is duly registered in the National Registry and enforces covenants, conditions and/or restrictions for the homes in the condominium. The HOA collects monthly fees to cover salaries and maintenance of the common areas and sometimes to pay for water.

I

interest rate: tasa de interés

Interest rate is the proportion of a loan charged by a lender to a borrower for the use of assets. Rates vary based on economic factors and in Costa Rica are usually based on the prime rate. Most financial institutions offer a fixed rate for the first two years and after that it is adjustable. Mortgage interest rates in Costa Rica are substantially higher than in most other countries.

internet connection: conexión internet

Not every area in Costa Rica has broadband internet. Check with your real estate agent before you purchase property, and be sure there is a utility company that offers the service.

L

lease agreement: contrato de alquiler

A lease agreement is a contract between homeowner and tenant that allows the tenant use of the leased property for a certain amount of time for a certain amount of rent, where both have to abide by the rules stipulated in the agreement.

lien: anotación

A lien is filed on the property title in the National Registry and is usually a claim for the courts to resolve.

listing: alistado

A property listing is a written contract between a seller and real estate agent authorizing the agent’s office to market and sell the owner’s home. The term is also used to refer to the property for sale, or any property information, photos, etc.

lock box: lock box

A lock box is a device that affixes to a door (or other external location) and contains the keys to open the home. It allows real estate professionals to enter a property without having to obtain their own key. Lock boxes are not used in Costa Rica, for various reasons, so agents make showing appointments with the owners present to open the house. Spanish speakers also use the word “lock box” for lack of a Spanish translation.

lot: lote

A lot or building lot or home lot is a tract of land with set boundaries shown on a registered survey map.

luxury home tax: impuesto solidario

The luxury home tax was created to build housing for the poor in 2009. All property with a value higher than ₡126,000,000 (in 2016) should pay 0.25% over the value. This tax is due on Jan. 1 every year. For more information, ask your attorney or real estate agent.

M

market value: valor de mercado

Market value of a property is the estimated value based on its current condition and ability to sell within 90 days. In Costa Rica, the sale price of properties is not publicly available, so it is impossible to put together a comparable market analysis.

mortgage: hipoteca

A mortgage is a legal agreement in which a person borrows money to buy property and repays the loan over a given period. The loan is typically secured by real or personal property.

mortgage broker: agente hipotecario

Private mortgage brokers and mortgage brokerage companies do not exist in Costa Rica. For a mortgage, you will have shop around for the best deal with banks and private lenders.

multiple listing service (MLS): listado multiple

An MLS is a large database that shows all properties listed by real estate agents, shown in an IDX on every member’s website. It allows buyers to work with only one agent to request showing appointments for any of the listings on the MLS. There are three multiple listing services in Costa Rica:

  1. The CCCBR (Cámara de Corredores de Bienes Raíces) MLS
  2. The CRGAR (Costa Rica Global Association of Realtors) CRMLS
  3. The American-European Real Estate Group MLS

 

O

offer to purchase: oferta de compra

It is important to always put in writing the intent of a buyer to purchase a property and to include the sale price and any conditions the buyer wants the seller to meet. Once accepted by the seller, the buyer’s attorney writes up the option to purchase/sale agreement to put the sale under contract. To avoid misunderstanding, do not make any verbal offers.

option to purchase/sale agreement: opción de compra/venta

After buyer and seller both agree on the offer to purchase, the buyer’s attorney writes up a document called the option to purchase/sale agreement that describes the transaction, the cost of the property, who pays for which costs, when to close and how much earnest money goes in escrow. Once signed, the property is under contract and off the market. Another correct word in Spanish is “contrato de promesa recíproca de compraventa.”

P

parcel: terreno para construir

A parcel is a defined area of land, such as a building lot. Other Spanish words used are “lote” and “parcela.”

plat or survey map: plano catastrado

A plat or a survey map, sometimes also called a plot map, is a map of the property, made by a surveyor and registered in the Catastro Nacional, which is a department of the National Registry. The survey map shows the location of the property, the exact size, the boundaries and who the neighbors are (though those names are seldom updated). It is a property map showing the boundaries of a piece of land.

power of attorney: poder legal

A power of attorney (“el poder legal”) gives one person (the agent) the power to act on behalf of another person (the principal). The term is often abbreviated POA. A general power of attorney (“el poder generalísimo”) is a power that gives broad authorizations to the other person. The agent may be able to make medical decisions, legal choices, or financial or business decisions. A special power of attorney (“el poder especial”) narrows what choices the agent can make. It’s possible to make several POAs, authorizing different agents to act on your behalf on specified matters.

pre-approve: pre-aprobar

After pre-qualifying with your lender, you can be pre-approved by submitting the necessary documents to apply for the loan. Those documents do not include the property information but the proof of income and documents related to your monthly expenses. To be pre-approved will not constitute a final approval; it will only approve you to make a purchase for a mortgage of a given amount.

prepayment penalty: multa por pago anticipado

All mortgage agreements have a clause indicating whether there is a penalty for paying your mortgage off early. You should check your mortgage agreement before you put your property on the market so you know to expect.

pre-qualify: pre-calificar

When you want to purchase a property and you do not know how much you can borrow from a lender to make the purchase, the lender can pre-qualify you with the data you give the loan officer. The lender will pre-qualify you for a mortgage so you won’t waste your time looking at property you cannot afford to purchase.

property tax: impuesto sobre bienes inmuebles

The property tax in Costa Rica is charged at 0.25% of the registered value in the municipality where the property is located.

R

real estate: bienes raíces

In Costa Rica, real estate is called “bienes raíces,” though in some countries it’s called “inmobiliario.” Real estate titles and concessions are registered in the National Registry. Every property has a survey which is registered in the Catrastro Nacional, part of the National Registry. The title of a property will also show any liens, mortgages, court orders or foreclosures, as well as the ownership information, the size of the property, its location, the neighbors, the title number and the survey number.

real estate agent: corredor de bienes raíces

There is no legal obligation for a real estate agent in Costa Rica to be licensed. Real estate agents in Costa Rica can be licensed by either of the two boards of real estate in Costa Rica, the Cámara Costarricense de Corredores de Bienes Raíces (CCCBR) or the Costa Rica Global Association of Realtors (CRGAR). The latter trains its members and is permitted the designation of Realtor by the National Association of Realtors.

real estate broker: real estate broker

A real estate broker is the owner of a real estate office that has several agents and is not necessarily licensed as a real estate broker by a real estate board. In Costa Rica, the word “real estate broker” is also used, for lack of a better Spanish word.

real property: bienes inmuebles

“Property” signifies dominion or right of use, control and disposition which one may lawfully exercise over things, objects or land. One of the basic dividing lines between property is real property and personal property. Generally, the term real property refers to land.

record: registrar

Title transfers and mortgages are first recorded in a “protocol” by the recording notary public, which is then presented to the National Registry.

referral fee: pago por referencia

This fee is paid by one real estate agent to another for referring a buyer or seller, and is paid from the commission received by the agent who receives the referral. When a referral is made by a third agent to two other agents, it is customary to pay a “santo,” which is a lower fee than the referral fee. In Costa Rica, it is customary to use the English term “referral fee.”

refinancing: refinanciamiento

Banks in Costa Rica often have special promotions, especially during housing expos. Refinancing your property means paying off your existing mortgage with the proceeds of a new loan, usually under better conditions or by consolidating various debts into one. If you need refinancing for your property in Costa Rica, talk to your account officer and check with the different banks on your options.

rent to own: alquiler con opción a compra

Renting with an option to buy is a concept unknown in Costa Rica. The seller would have to take the property off the market, and if the tenant did not purchase within the allotted time, rent paid would not apply toward the purchase price. In some cases, “rent to own” might be a possibility in Costa Rica with a significant down payment of earnest money at the signing of the agreement.

S

sale price: precio de venta

Sale price or purchase price is the amount the buyer pays the seller for a property.

septic system: sistema séptico

Very few cities in Costa Rica have sewer systems, so most properties in Costa Rica have their own septic tank and leech field. Only condominiums have a solid waste and gray water treatment plant.

setback: retiro

A setback is the distance from a certain point — a neighbor’s property or a creek, for example — where you are not allowed to build.

square footage: medida en pies cuadrados

Measurement in square feet is not used in Costa Rica, although most real estate agents who manage a website in the English language will usually list the property and the house in square feet. In Costa Rica, property is generally measured “under roof,” which includes porches and garage.

square meters: metros cuadrados

Real estate in Costa Rica is measured in square meters and hectares. For a full explanation, see “7 secrets of Costa Rica real estate measurement conversion.”

T

title: título de propiedad

The title of a property is the document that identifies who legally owns a property. It is recorded at the National Registry in the form of a deed.

title insurance: seguro sobre título de propiedad

Title Insurance protects the buyer if a dispute over property ownership arises. Costa Rica follows the doctrine of “first in time, first in right,” which means documents that were not recorded against title at time of purchase cannot be charged upon an innocent buyer who purchased in good faith. This makes title insurance unnecessary, though several companies sell the services as title commitments and title guaranties.

title search: revisión de título de propiedad

You can examine the title of a property online at the National Registry by opening a free account. Those records will determine who the legal owner is and whether there are any outstanding liens against the property.

trash collection: recolección de basura

Trash is picked up by the municipality where the property is located, usually twice a week. The charges for trash pickup are charged at the same time as the property tax, quarterly or annually.

U

unencumbered property: propiedad libre de gravamenes

This is a property that is free of any type of lien.

utilities: servicios públicos

Utilities are phone, water and electric services for a property. Once you have proof from the National Registry that a property is yours, you can apply for a new phone line, a new water meter or a new power meter. Most property owners in Costa Rica do not bother making the change and leave the utilities as they are after the real estate purchase.

W

walk-through inspection: revisión de última hora

This is a visual inspection of a property by a buyer and his/her real estate agent just prior to closing to ensure the home is left by the seller as agreed on in the option to purchase/sale agreement. The walk-through inspection should be mentioned in the option. Once the buyer has closed the purchase, it will take a lot of time and effort to make any claims in the courts of Costa Rica.

wetlands: humedales

Wetlands are tracks of land found in aquatic habitats covered in surface water, which plays a large role in the soil, plants and animals that inhabit the area. Wetlands in Costa Rica are sometimes located in government-owned property and declared national parks, but often in private property they carry an annotation on the property title as protected areas.

Z

zoning ordinance: plan regulador

Most cities in Costa Rica have their own zoning plan, controlling the location, size and use of buildings in a specific area. Cities within the Greater Metropolitan Area (GAM) that don’t have their own zoning plans are regulated by the GAM zoning plan. Nonetheless, there are still cities that do not have any zoning at all, mostly in coastal areas.

If you’d like to suggest an addition to this glossary (or quibble with a definition), please contact us.

Ivo Henfling founded the American-European Real Estate Group back in 1999, which was the first functioning MLS in Costa Rica with affiliate agents from coast to coast. You can read other articles like this on his blog. You can contact Ivo at (506) 2289-5125 / 8834-4515 or at ivo@american-european.net.

This guide was reviewed by real estate attorney and notary public Roger Petersen. Read his blog at www.CostaRicaLaw.com.

 

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