Escrow in Costa Rica: moving money safely
The single rule that prevents the worst outcomes: your money never reaches the seller until the property legally becomes yours.
Legal-topic page, reviewed by a licensed Costa Rica attorney before publish. Educational, not legal advice.
How escrow works
You deposit the money with a SUGEF-registered escrow agent, not the seller. The agent holds it under an escrow agreement and releases it only when the agreed conditions are met, typically when the transfer deed is signed before a notary and filed with the registry. Until then, your funds are protected.
Escrow is not legally mandatory in Costa Rica, but it is standard and strongly recommended. It protects the buyer (money is not gone before title transfers) and the seller (funds are confirmed and ready). SUGEF is the financial regulator, and registered escrow agents operate under anti-money-laundering rules.
Escrow protects the transfer, not the choice. Run a free Folio check so the property you are escrowing is actually clean before your money moves.
The escrow flow
A written agreement names the SUGEF-registered agent and sets the exact conditions for release.
Anti-money-laundering documentation on where your funds come from. This is normal and a sign the agent is doing it right.
Funds sit in the regulated account, not with the seller, while due diligence and closing proceed.
Once the transfer deed is signed and filed and conditions are met, the agent releases funds to the seller. You are the registered owner.
What is NOT real escrow
Wiring to a seller directly. Sending money to an individual's personal account. Depositing into a law firm's ordinary operating account and calling it "escrow." None of these carry the protection of a SUGEF-registered escrow agent. If someone resists using regulated escrow, treat it as a warning.
Real escrow
- SUGEF-registered escrow agent
- Written escrow agreement
- Anti-money-laundering compliance
- Release tied to registered transfer
Not escrow
- Direct wire to the seller
- An individual's personal account
- A firm's ordinary account, no agreement
- Release on trust, before transfer
Escrow protects the mechanics. Folio makes sure the property itself is worth escrowing, before your money moves.
Frequently asked questions
How does escrow work?
You deposit funds with a SUGEF-registered agent who releases them to the seller only when conditions are met, typically when the transfer is signed and filed. Expect source-of-funds documentation.
Is escrow required?
Not legally mandatory, but standard and strongly recommended. It keeps your money out of the seller's hands until title transfers.
Is a lawyer's account the same as escrow?
No. Real escrow uses a SUGEF-registered agent under anti-money-laundering rules. An ordinary account is not regulated escrow; a law firm can hold escrow only if it is itself SUGEF-registered.
Why do they ask where my money is from?
Anti-money-laundering compliance. It is required and normal, and a sign the escrow agent is legitimate. Prepare your source-of-funds documents in advance.