HCBA Lawyer Magazine Vol. 28, No. 2 | Page 48

REAL ESTATE LiCEnSES in MEXiCO & CEnTRAL AMERiCA: PARAdiSE AwAiTS?
Real Property Probate & Trust Section
Chairs: Kristin Morris – Shutts & Bowen & Anthony Diecidue – Genders Alvarez Diecidue
The danger with buying
property in these countries
is not finding pieces of
paradise, but the people
B
uying foreign property
can be a lifelong dream
for some. If one has the
resources, then why not
buy a villa in the coastal paradises
of Costa Rica? For one thing, the
process (and dangers inherent
therein) of buying land in these
places makes obtaining such
property far more risky than it may
initially appear, and it may turn a
“dream” into a nightmare. The
danger with buying property in
many of these countries is not
finding pieces of paradise, but the
people who find them for you.
A mistake many American
property seekers or owners make
in these countries is to assume each
country places the same rules and
regulations on its real estate market
as the United States. 1 For example,
in Florida, a real estate license
is necessary to perform any
property transaction that ends in
compensation for the real estate
agent. 2 Unfortunately, this is often
not the case in Mexico and many
Central American countries, where
any person off the street can offer
their “services” to unsuspecting
foreigners, since there are minimal
or no license requirements. In
Mexico and Costa Rica, realtors
are not required to have a realtors’
license before conducting business. 3
In fact, across all of Mexico and
Central America, only two
countries require and enforce a
46
who find them for you.
© Can Stock Photo / kwest19
real estate license: the Republic of
Panama and Guatemala. 4
Imagine you are visiting Costa
Rica on holiday. You recently
inherited a piece of property there,
but would like to sell it to buy a
bigger house closer to the beach.
You are discussing your possible
selling options on a cab ride when
the cabbie turns to you and says he
knows “so many people” who
would love to buy the land from
you, and he would even help you
find a new property closer to your
desired location. You excitedly
agree. Weeks go by with no word
from your new “friend.” Then,
out of the blue, a neighbor tells
you that your “realtor” has been
making incredibly controversial
claims about your property to
prospective buyers. When you
race off to confront the man, you
discover he has skipped town.
This may seem like an overly
dramatic example, but in reality it
illustrates a less damaging outcome
of unknowingly hiring an unlicensed
realtor in a foreign country. When
money begins changing hands, the
results can be much worse than
falling behind on your plans to
build a tropical paradise.
But real estate sales and
purchases in Mexico and Central
America do not have to be a
nightmare. Many countries, like
Costa Rica, are trying to fix market
flaws in their real estate operations,
and Panama and Guatemala
already require all real estate agents
to be licensed. 5
So what can attorneys do to help
their clients interested in a piece of
paradise? For starters, remind them
that a friendly foreign cabbie who
says “they know a guy” is most
likely not a licensed real estate
agent. One should deal with these
people with extreme caution, if at
all. The most prudent course of
action is to advise clients to seek out
licensed and experienced real estate
agents, preferably an agent that has
lived in the area for years, and to
keep involved in their transactions
or obtain local counsel.
States have their own real estate
brokering and licensing laws, often
codified in statutes and regulations.
For example, real estate licenses in
Florida are governed by Chapter 475,
Florida Statutes, and Chapter 61J2,
Florida Administrative Code.
2 See §§ 475.15, 475.161, Fla. Stat.
(2017); § 61J2-1.011, F.A.C (2017).
3 Costa Rica proposed legislation for
real estate licenses in 2010, but the
proposed legislation did not pass. “Ley
Reguladora de los Contratos
Inmobiliarios y de la Correduría de
Bienes Raíces” (La Gaceta No. 54 del
18 de Marzo del 2010). Ivo Henfling,
Will Real Estate Licensing Soon be
Mandatory in Costa Rica? (2016),
1
Continued on page 47
NOV - DEC
2017
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HCBA LAWYER