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Conflict of Interest Rules in Costa Rica


Conflict of Interest Rules apply to lawyers in Costa Rica, just as they do in the United States, or Canada. The prohibition is contained in the Code of Ethics to which all Costa Rican lawyers must subscribe.

The difference is, in Costa Rica, the decision to act in a conflict of interest circumstance is left to be made as a moral decision by the lawyer, without fear of any practical retribution by the College of Lawyers, while in the United States, or Canada, a lawyer acting in such circumstances would most likely receive a suspension from practice for a period of time, as a penalty for having acted in such a manner.

In Costa Rica, the breach of this ethic usually occurs in the circumstances of a purchase of property from a developer. Most developers have in-house, salaried lawyers/notaries, who are available to act on a property purchase closing without additional expense to the developer.

The property purchase transaction most commonly includes the closing costs as part of the purchase price, if the developer’s lawyer is used to the exclusion of an independent lawyer acting for the purchaser. This is a very dangerous circumstance for a purchaser, who’s legal interests would remain unrepresented in the transaction. A purchaser must have independent legal representation in the property purchase transaction if their legal interests are to be protected.

The only circumstance where a seller’s/developer’s lawyer should be acting as the closing lawyer/ notary is where vendor financing is offered as part of the purchase agreement. In such circumstances, it is common to have two lawyers handling the closing jointly, one acting for the purchaser with respect to the title transfer and the other acting for the seller/developer with respect to the vendor financing.

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