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Registro Nacional Turns Its Back on Obvious Frauds

by Garland M Baker on November 13, 2006

It’s the law, officials say

The Registro Nacional confirmed its policy last month of turning its back on fraud. The government institution stated in its publication “Materia Registral” that fraud is the exclusive responsibility of the courts and not of the Registro Nacional. The ruling came from the administrative directorate of the organization.

Property records at the Registro Nacional are under daily attack by fraudsters. The director, Roger Hidalgo Zúñiga, is under suspension while a thorough study of strange property transactions takes place.

However, the organization does not feel legal matters, like transferring property fraudulently, are its problem.

Recently, a person representing a company affected by an illegal property transfer wanted the Registro Nacional to object to the registration of a property. The transaction involved a double transfer: First to Company A and then to another company, B.

The notary presenting the documentation was under suspension and the sale to Company B preceded the sale to Company A.

The Registro did not stop this obvious funny business and let the property transfers go through.

During the last weeks of August, another group was trying hard to put a fast one over on the Registro, and the effort almost succeeded. However an aggressive lawyer put a stop to the foul play. The people in the property division of the recording office did nothing to help.

According to the Registro Nacional, by law, workers cannot solicit current information regarding the current status of public notaries. The agency also states, by law, it cannot question information regarding who is the rightful owner of a property upon its sale, only upon its presentation to the registry. This is why they did not stop the property transfer in the example above.

The Registro Nacional is the official registry of lands of Costa Rica. However, the agency states that to insure judicial security, it cannot act alone to police property trafficking. They can only collaborate and cooperate in the team effort to control the activity.

The members of the team are notaries, the courts and the registry. The Registro states that none of the members can weaken the system by doing the job of the others. Thus in their conclusion they are not responsible for stopping illegal property transfers even if such funny business is obvious, because this is not their job.

The Registro’s responsibility is limited to inscribing documents that meet the legal requirements of registration. If a document has a misplaced comma, the Registro will reject it. But workers are not responsible for questioning the job of notaries because this would mean invading their space. Registry people are qualifiers not police persons, they say.

The courts exist to do the policing, the Registro says.

Under Costa Rican law, Article 480 of the Civil Code states that only an agreement between parties is necessary for a transaction to be complete. No ceremony or even inscribing the act in the national registry is necessary.

The registration of documents at the Registro Nacional is to protect third parties by providing a place where others can view transactions. It is the responsibility of notaries to make sure they are correct and of the courts to insure they are honest. Of course the courts are overwhelmed, and some notaries are crooked.

All this boils down to the fact that workers at the Registro Nacional will not place an administrative alert on a property transaction without an order from a court even if the deal is obviously fraudulent.

Workers there will not check on notaries to be sure they are current and not under suspension or verify that the person presenting a property for registration is, in fact, a notary.

The Registro Nacional will only annotate properties with an alert where the institution itself makes an error in registration.

In summary, there are three parts to the property transfer puzzle, not one. This entity wants people off its case and points fingers at the other two components.

For property buyers, this means taking extra doses of due diligence and protecting real estate with mortgage certificates and voluntary immobilizations to avoid fake sales and transfers.

{ 1 comment… read it below or add one }

john brightman May 24, 2009 at 3:03 am

HI
looks very interesting!
bookmarked your blog.
john brightman

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