5 Property Scam Red Flags to Check Before Buying in Costa Rica or Panama

Most property scams in Costa Rica and Panama aren't elaborate. They rely on a foreign buyer not knowing which document to ask for, or not reading it carefully once they have it. Here are the five red flags that come up most often, and what actually catches each one.

1. The seller isn't the registered owner

This is the most common issue, and the easiest to miss if you never check the title yourself. Someone can show you a property, negotiate a price, and even sign a contract, without being the person the national registry actually recognizes as the owner. Sometimes it's an heir selling land still registered to a deceased relative. Sometimes it's someone with no legal connection to the property at all.

Caught by: the title search (Folio Real in Costa Rica, the equivalent Registro Público entry in Panama), which lists the registered owner's name directly.

2. The land doesn't match the survey

A buyer is shown a beautiful, oceanview parcel — and the registered survey describes a smaller lot, in a different shape, further from the water. This happens more often than it should, especially with undeveloped land where boundaries are easy to describe loosely and hard to verify by eye.

Caught by: comparing the registered survey (Plano Catastrado) against the property's actual boundaries and area — on paper, not just on a walk-through.

3. The property sits in a restricted zone

Coastal and riverside land in both countries is subject to setback rules — Costa Rica's maritime zone (Zona Marítimo Terrestre) restricts building within 200 meters of the high tide line, and similar restrictions apply near rivers, wetlands, and protected forest. A seller doesn't need to lie outright for this one — just leave out that most of what you're buying can't legally be built on.

Caught by: checking the zoning and land-use certificate (Uso de Suelo) and cross-referencing environmental and maritime zone restrictions before you assume the whole lot is buildable.

4. Debts that transfer with the property

Unpaid municipal property taxes, utility liens, or HOA dues don't disappear when ownership changes hands — in both countries they can attach to the property itself, meaning you inherit someone else's unpaid bill along with the land.

Caught by: a Paz y Salvo check, which confirms the property is current on the debts that would otherwise transfer.

5. Pressure to skip the checks entirely

This one isn't a document problem, it's a behavior pattern — and it's the clearest warning sign of all. "Cash only." "There's another buyer, you need to decide today." "You don't need a lawyer, I'll handle everything." A seller in a hurry to close before you've verified anything is, at minimum, not acting in your interest.

Caught by: simply refusing to skip the check. A legitimate seller with clean documents has nothing to lose by letting you verify them first.

The pattern across all five

None of this requires special expertise to avoid — it requires checking the actual registered documents against what you're being told, before you commit any money. That's the entire job of a due diligence report.