Special Power of Attorney for real estate transactions and its implications

As of this January, the Real Estate Registry established a new version of its Qualification Guide. Within the various provisions and requirements that have been added to this Guide , there is in particular an issue that deserves a particular care from the Notaries Public, since it will change the way to corroborate the suitability of the powers of attorney granted to legal representatives in order to act effectively in real estate acts with registry effects.

Over the years, the notary and registration practice, and thus accepted by the same Real Estate Registry until this January 2021st, allowed representatives with powers of attorney granted through agreements from any Assembly of “shareholders, quotaholders or associates”, to act by practicing their representation and powers, and that subsequently, such act be included in the aforementioned Register. The new version of the Real Estate Registry Qualification Guide, in force from this January, states that only special powers of attorney granted by direct appearance before a Notary Public by legal representatives with sufficient powers to do so will be approved, no longer accepting the special powers of attorney granted in Assemblies.

The change of criterion of the Real Estate Registry responds merely to a direct reason: that the document in which the special power of attorney is granted through agreements from an Assembly are not, by definition, public deeds, and therefore do not meet the legal requirement required by our Civil Code.

This has a great impact on the law practice. Although the interpretation of the Real Estate Registry is based on the reading and text of the law, the aforementioned modification will cause legal firms, clients and companies, to modify the way they give representation regarding real estate transactions, allowing legal creativity to achieve it. It is well known that in Costa Rica operate countless companies whose representatives are outside the country, which makes the granting of special powers of attorney by direct appearance, an option not so comfortable for all legal operators. As the special powers of attorney granted by the respective Assemblies were no longer accepted through their agreements, the situation changed the way many companies operated, impacting in time and cost. Without a doubt, proper legal advice is and will be even more necessary.

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