Annotations For Dummies … Nosara Updates
- September 1, 2016
With all the news about annotations, we at the Nosara Real Estate Report feel obligated to try to explain the differences between the various types of annotations that may be found in property reports retrieved from the Costa Rica National Land Registry (Registro Nacional). This is a very confusing subject, and the differences between one annotation and the next often are significant. Here are some of the most common annotations, what they mean, and how they may affect a property:
Administrative Warning (“Advertencia Administrativa”)
This type of annotation is the most well known in the Nosara area, as we have reported already on the 600+ administrative warnings put on properties (as well as the first 120+ that were removed in May 2016 and now reporting about the the additional 40+ removed on August 9, 2016). An Administrative Warning is simply a notice to 3rd parties that an official investigation is ongoing, and that the property with the administrative warning is included in the investigation. This type of annotation does not necessarily imply that there is a problem with a property, just that it is involved in an ongoing investigative process. The ongoing process may turn into a civil or criminal investigation or evolve into something that warrants a different type of annotation being issued; but in general, this type of annotation does not affect an owner’s ability to use, enjoy, sell, or transfer a property. However, in some cases, particularly in Nosara, the administrative warning can prevent the issuance of a new property survey.
Judicial annotations are much more significant to the real estate investor and/or property owner. A judicial annotation is a notice to 3rd parties that a property is subject to the outcome of judicial process, i.e. – the property is subject to an ongoing court case that may affect the ownership of the property at some point in the future. A judicial annotation can come from a Civil Process (a process in civil court, or a private arbitration panel) or from a Criminal proceeding.
Civil Processes can be Ordinary Processes, Summary Processes (similar to an Ordinary but a shorter version that takes less time), or they can be an “Interdicto,” which is a process to establish official records of who is in possession of a property. The most important thing to understand about a Judicial Annotation is that the property is directly affected by the outcome of the judicial process. Anyone interested in buying a property with a Judicial Annotation should get very detailed information from their lawyers regarding the extent to which the legal process might affect a property.
Recently, the Administrative Contencioso Court placed judicial annotations on 86 fincas and 90 planos that are part of the ongoing Custodia legal proceeding. This is significantly different than an administrative warning, as now these properties are explicitly subject to the outcome of the court case. Depending on its outcome, the case could result in title holders to the affected properties suffering limited or complete losses.
Judicial Annotations are issued for a Criminal Process in the event of fraud or forgery, among other things. Outcomes will vary, depending on the seriousness of the criminal annotation. In less serious cases, a property may have the criminal annotation because it is being used as proof or “pruebas” in a larger criminal case, even though there are no current problems with the specific property; but in other cases, the criminal annotation may mean the property was stolen and currently is in judicial process to restore ownership to the rightful owner. In any case, the only way to know how a judicial process affects a particular property is by having an attorney investigate the claim and figure out the basis for the annotation, so she or he can recommend a course of action.
This is an annotation that signifies a property is being used as collateral or guarantee in some other separate proceeding. This is much less common in the Nosara area, but it can be something that shows up on a title search, leading to more questions. Again, have your attorney perform due diligence to investigate the details of an annotation of this type
The most serious annotations are the “immobilization” type. These annotations inform you that the property has been blocked from any pending sales or transfers by a direct court order, pending the final outcome of a court case or other proceeding. A property that is “immobilized” is essentially frozen, so this type of annotation is very serious and requires great caution.
Given that annotations can mean anything from a warning that the property possibly may be implicated in an unrelated legal proceeding to a complete immobilization of the property by direct order of a court, there is no shortcut to a thorough and individualized investigation of the meaning of any specific annotation. Fortunately, there are attorneys sufficiently knowledgeable about the varieties of annotations impacting Nosara real estate to provide the informed consumer with the information he or she needs to make good choices.