Short answer: the file behind the NDA is where a Costa Rican hotel purchase is actually decided. Not the photographs, not the asking price. This is the document by document list, with the local names, what each document proves, and the specific red flag to look for in each.
Nothing here replaces Costa Rican counsel and a local accountant. It is a map, so that you know what to ask for and can tell quickly whether the seller’s file is real.
A. Ownership and land
Registry study (estudio registral). A current extract from the national registry showing the folio real, the registered owner, area, boundaries and every annotation. Red flag: recent transfers between related parties, annotations you do not understand, or an owner name that does not match the party you are negotiating with.
Cadastral plan (plano catastrado). The surveyed plan registered with the cadastre. Red flag: an old plan, a plan whose area disagrees with the registry, or buildings that on inspection sit outside the plan boundary.
Encumbrances (gravámenes y anotaciones). Mortgages, liens, easements, usufructs, litigation annotations, servitudes for access, water or power. Red flag: an access easement across a neighbour’s land that is informal rather than registered. If the road to the hotel is not legally secured, nothing else matters.
Corporate file. Articles, shareholder register, legal representation certificate (personería jurídica), corporate books, and the registered agent’s status. Red flag: dormant filings, unpaid annual corporate obligations, or powers of attorney that do not clearly authorise the sale.
Maritime terrestrial zone, where relevant. The concession title, its term and remaining years, the municipal file, payment compliance, the status of the coastal regulatory plan, and the shareholding limits applicable to foreign concessionaires. Red flag: an expiring term without an initiated renewal, arrears, or a corporate structure that does not satisfy the foreign participation restrictions.
B. Permits and licences
Municipal operating licence (patente). Current, in the correct name, for the actual activity. Red flag: a licence for a smaller activity than the one being operated.
Use of soil (uso de suelo). Municipal confirmation that the zoning permits the current and intended use. Red flag: a use tolerated for years but never formally permitted, which surfaces the moment you apply for anything.
Construction permits. Permits for everything standing. Red flag: the classic Costa Rican gap, where a founder added rooms over the years without permitting each phase. This is fixable, sometimes expensively, and it is your negotiating point rather than a surprise for later.
Environmental viability (viabilidad ambiental, SETENA). Required for development and relevant to expansion. Red flag: an expired file, or unfulfilled conditions attached to the original approval.
Health ministry permit. Operating permit for the establishment, kitchen, pool and water systems. Red flag: expired, or issued for a different configuration.
Tourism institute declaration (declaratoria turística, ICT), where held. Confers certain benefits and signals compliance. Red flag: lapsed and presented as current.
Sustainability certification, where held. Commercially meaningful in the lodge and nature segment. Red flag: an expired certificate still displayed in marketing.
C. Water, the decisive one
Water availability letter (carta de disponibilidad de agua) from the water utility or the local ASADA, plus the connection contract and the actual delivered capacity.
In much of Costa Rica this single document determines whether you can add a room, a pool or a restaurant seat. A seller telling you there is “no problem with water” without a letter is telling you there is no letter.
Red flag: no letter, a letter in a previous owner’s name, a letter capped below current consumption, or a district with a moratorium on new connections. Verify wells and concessions for water use separately, since a private well requires its own authorisation.
D. Financial
Filed tax returns (declaración de renta, D-101) for at least three years, plus value added tax filings. Compare the filed numbers with the management accounts. Red flag: a large gap between the two with no documented explanation. Whatever the explanation, you can only underwrite what is documented.
Full financial statements. Profit and loss and balance sheet by year, ideally by month, with the chart of accounts.
Normalisation schedule. Family owned hotels routinely mix personal and business expenses: vehicles, family housing, relatives on payroll, personal travel. Producing a defensible operating profit requires identifying each adjustment and evidencing it. Red flag: normalisation presented as a single lump adjustment with no supporting detail.
Debt schedule. Every loan, its balance, rate, maturity, security and any change of control clause. Red flag: debt secured against assets not included in the sale, or a lender consent requirement discovered late.
Working capital and deposits. Guest deposits and prepayments for future stays are a liability that transfers with forward bookings. Agree explicitly how these are treated at closing.
Municipal and corporate taxes. Property tax, municipal charges, annual corporate tax. Red flag: arrears, which can attach to the property rather than the person.
E. Labour, the most commonly underestimated
Payroll and social security (planilla, CCSS). Registered employees, salaries, contribution history and a certificate of good standing. Red flag: staff working who are not on the registered payroll. Informal arrangements create real, quantifiable liability.
Employment contracts and accrued rights. Costa Rican employment law is protective. Severance, notice, annual bonus and holiday entitlements accrue and are real balance sheet items, not contingencies to be waved away.
Risk insurance (póliza de riesgos del trabajo, INS). Current and matching the actual headcount.
Litigation and claims. Past and pending labour claims, plus any dispute with former staff.
Get an independent calculation of the total accrued labour position. In an asset purchase it is normally settled or assumed explicitly. In a share purchase it comes with the company whether or not anyone mentioned it.
F. Operating
Occupancy, average daily rate and revenue per available room, by month, for at least three years, exported from the property management system rather than typed into a slide.
Channel mix. Direct, online travel agencies, wholesalers, tour operators and DMCs, with net rates for each. Red flag: high occupancy achieved almost entirely at deeply discounted wholesale rates.
Concentration. Any single intermediary representing a very large share of annual room nights is a single point of failure, particularly if the relationship is personal to the departing owner.
Distribution contracts. Rate agreements, allocations, release periods and any change of control clause.
Reputation. Review scores by platform over time, response practice, and what recurring complaints reveal about deferred maintenance or staffing.
Guest data. Repeat rate, database, and whether it can lawfully transfer.
Forward book. Confirmed reservations beyond closing, and the deposits attached to them.
G. Physical
Condition survey. Roofs, structure, humidity and termite damage, electrical, water treatment, pool systems, kitchen equipment, generators, solar, connectivity, vehicles.
Deferred maintenance schedule priced by a local contractor, not estimated from photographs.
Furniture, fixtures and equipment inventory, with ownership confirmed. Red flag: leased equipment or vehicles listed among the assets being sold.
Insurance. Current policies, claims history, and whether coverage matches replacement cost.
The four that kill deals in Costa Rica
If your time is limited, front load these:
- Legal access. A registered easement or public road to the property. Without it, the asset is not what you think it is.
- Water availability in writing. No letter, no expansion.
- Permitted versus built reality. What is standing, versus what was authorised.
- The true labour position. Registered payroll versus actual headcount, and total accrued rights.
Everything else is negotiable. These four determine whether there is a transaction.
How to sequence it
Run legal, financial and labour work in parallel from day one of exclusivity. Order the registry study and the water letter immediately, because they are the fastest to obtain and the most likely to end the process. Book the condition survey early, since good local surveyors are scarce in season. Keep a single issues list, shared with the seller’s advisor, that tracks every open item to closure. Nothing preserves a deal like both sides looking at the same list.
Frequently asked questions
How long does diligence take on a Costa Rican hotel?
For a well prepared file, weeks. For mixed family books, an unpermitted expansion or a concession renewal, considerably longer. The seller’s preparation is the variable, not the country.
Can I do diligence before signing an NDA?
No. Nothing in the list above exists in public. This is the whole reason the NDA sits where it does in the process.
What if documents are missing?
Very common, and not necessarily fatal. What matters is that the gap is identified, priced and either fixed before closing or reflected in the terms. A good advisor gives you the missing list before you ask.
Should I use my own lawyer or the seller’s notary?
Your own Costa Rican counsel, always. A notary is required to formalise the transfer; that role is not a substitute for independent advice.
Further reading: How to Get Access to Off Market Hotels in Costa Rica, Hotels for Sale in Costa Rica: A Complete Guide for Foreign Buyers, From First Contact to Letter of Intent: How a Confidential Hospitality Transaction Runs.
CHN Hospitality Partners is an intermediary in hospitality businesses in Costa Rica, not a real estate agency. We work in hospitality only: operating hotels, lodges and resorts, non-operating hotel properties, commercial development land for hospitality projects, and joint venture opportunities. No houses, no vacation rentals. Every asset on our register appears at invest-costarica.com under its CHN reference code: public listings show the destination and the verified facts the owner allows, silent listings show only a key count and a regional pin. The property’s identity is disclosed only after buyer registration and a signed NDA for that specific asset. Register at invest-costarica.com, or write to tara@invest-costarica.com.
General orientation only. Not legal, tax or investment advice. Every position above must be confirmed with Costa Rican counsel and a local accountant for the specific asset.
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