Categories: Banking Law and Financing
Investing in the acquisition of real estate project is possible, even if you don´t have the necessary capital, considering the different credit options that exist in the market.
Credit options for the acquisition of real estate properties in Costa Rica:
Whether you have in mind to buy a lot, house or apartment, ERP Lawyers & Associates, your legal advisor in Costa Rica, explain you the different types of loans you can get and their main characteristics.
1. Direct Credits: Costa Rican citizens or those foreigners with a residency ID, as well as the legal corporations, can apply to obtain this kind of credit.
When it comes to real estate properties, the warranty to issue the credit from a bank is a mortgage, this means that if the person buys a house that is valued in several million colones, the bank will loan him/her a percentage of that value and, if the client do not pay, the entity can recover its money auctioning the property.
2. Trusts, as a way of financing real estate projects:
Trusts are used -in most cases- to finance big real estate projects, such as the development of an apartment tower or horizontal residencies.
Through the trusts the bank or the individual who loans the capital can eventually recover the money, through the administration of the project.
In the trust there are three figures:
-Fiduciary or trustee: this will be the individual or legal corporation who the property is transferred to in that condition. It should be properly registered at the Superintendencia General de Entidades Financieras (SUGEF).
-Trustor: is the person to whom the fiduciary loans the money to execute the desired project. In exchange, the trustor transfers the real estate to be administered by the fiduciary.
-Fideicomisario: receives the benefits from the trust until the end of the contract between the parties. If the conditions of the contract are fulfill, the property returns to the fiduciary or can be transferred to the Fideicomisario.
Requirements to ask for a trust
The requirements may vary from one bank or a legal corporation to another, however, the person interested in developing the project needs to comply with several procedures for applying to a trust: undergo a study to determine her/his financial history, present his pay roll and guarantors, etc.
Specific benefits to apply to a trust: (title: benefits of a trust)
- The real estate won’t be subject of a seizure.
- Lower costs.
- The fiduciary will be properly guarded by the SUGEF.
The time limit to extend a trust in Costa Rica is of maximum 30 years.
The best legal advice on Credit options acquisition real estate or for developing real estate projects
ERP law firm has a close relationship with private banks, making possible for our clients to be addressed by loans executives that will study your case and determine if the trust is the best choice for your real estate project.
As a law firm with extensive experience in Real Estate, we will provide you with the legal documentation required for processing the trust. Contact us for an integral advice.
