Debts that stay glued to the property

Some debts do not travel with the person: they travel with the property. Even when the auction is “free of liens” and the court cancels the mortgages, these land on you. They are the most common surprise, and the most avoidable one.

1. Municipal taxes and services

“Las deudas por tributos municipales constituirán hipoteca legal preferente sobre los respectivos inmuebles.” In English: debts for municipal taxes constitute a preferential legal mortgage over the respective properties.

A preferential legal mortgage means the municipality holds a security over the property that arises on its own, with no need to register it, and that ranks ahead of nearly everything else. That is why you will not see it in the registry check: it is recorded nowhere, and it exists anyway.

This covers the property tax, waste collection, sewerage, park maintenance and other municipal charges. If the previous owner stopped paying for years, that balance stays attached to the property.

There is a limit worth knowing: municipal taxes lapse after five years (article 73 of the same code), so the inherited debt does not grow indefinitely into the past. Even so, five years of property tax, waste collection and sewerage is real money.

2. Condominium fees

If the asset is a condominium unit (apartment, house in a gated community, unit in a shopping centre), unpaid fees also stay attached.

Fees owed by owners for common expenses, along with any fines and interest they generate, constitute a mortgage charge over the unit, preceded only by the charge for property tax.

So the queue looks like this: property tax first, condominium second, everything else after. The same provision puts a licensed public accountant in charge of certifying those amounts, and that certification is an enforceable mortgage title: the condominium can foreclose on the unit with it.

3. Utilities: water, power, internet

These debts usually belong to the account holder rather than the property, but in practice they can leave you without service until you sort things out with the provider. Budget for reconnections and paperwork.

4. What does get cleared

When the auction is approved, the court orders the cancellation of the registrations or filings relating to the enforced claim, those ranking below it, those appearing in the certification used as the basis for the auction, and those filed afterwards. That part the court does resolve, and it is exactly what makes a first-rank auction attractive.

Putting numbers on it

Same house, two scenarios

Winning bid

₡50,000,000

Municipal taxes in arrears (4 years)

₡1,800,000

Condominium fees in arrears (3 years)

₡3,100,000

Real cost from inherited debt alone

₡54,900,000

Almost ₡5 million that appeared in no advertisement. Finding it out cost two phone calls.

Remember the underlying rule

Article 159 of the Code of Civil Procedure says that whoever acquires at auction does so at their own risk as to location, condition or factual circumstances, whether or not these appear in the case file. There is no “nobody told me”. Asking is part of the price.