Legal advice on banking and financing, Costa Rica, Bank lawyer


What is banking law?

A company with a solid financial structure will undoubtedly have better opportunities for growth and competitiveness in the market. For this to happen, your business requires financing and other tools related to Banking Law.

Banking Law is defined as a set of rules that regulates the relationships between banking entities and users.

At ERP Lawyers & Associates we specialize in providing you with legal advice in banking law and finance, so that you achieve your business objectives.

What is financing and what forms exist?

If your company requires renting or buying personal property, such as vehicles, technological equipment or machinery, to name a few, you can resort to these options:

  • Pledge: when giving a credit the pledge is constituted on the good as a guarantee of payment.
  • Leasing: the bank grants a loan and the client cancels it in monthly installments. It is used a lot for the purchase of vehicles. In this case, the owner of the vehicle is still the creditor.
  • Renting: you negotiate with a rental company or car sale, to have the fleet of vehicles that best suits the needs of your business.

ERP Lawyers is responsible for processing the credits and negotiating or reviewing loan contracts, to ensure you always a fair deal.

Real estate credits

If your company plans to physically expand or relocate its operations, you can choose to buy land by applying to:

  • A direct credit with mortgage
  • A trust

The counseling in Banking Law provided by ERP Lawyers & Associates, the best boutique law firm in Costa Rica, includes studies of the markets in which your business is developed, and an accurate handling of laws and regulations related to financial activities.

Our firm handles financial accounting principles that allow you to interpret and analyze economic information generated by your company, to propose strategies that improve your financial structure.

How is a mortgage constituted?

Commercial Law regulates the constitution of a mortgage, that is, the person asks a bank, financial institution or private person, for a mortgage loan and puts as collateral a property (for example, a house). In exchange for the loan, the client will pay monthly installments and interests previously established, in addition to the main debt; If the loan is not paid, the creditor has the right to recover his money by auctioning off the property.

When you subscribe to a mortgage loan, hire legal advice to choose what suits your business or personally.

What types of mortgage are there?

1. Mortgage loan with fixed interest:

When the interest rate and the fee to pay remain fixed throughout the loan.

2. Mortgage loan with fixed interest and payment of main debt at maturity:

It usually happens when the lender is a private person and the term of the credit is short term (usually one to three years). In this case the debtor only pays interest during the term of the loan and cancels the main debtl at the expiration of the term.

3. Mortgage loan with variable interest:

Interest is reviewed every three or six months, or once a year; and adjusts to market conditions. One of its advantages is that this type of mortgage loan facilitates longer amortization periods (up to 30 years or more).

4. Mortgage loan with mixed interest:

A fixed interest is usually charged for 3 or 5 years and then the interest becomes variable.

To ensure fair treatment, we will verify everything related to your mortgage: the currency to be used, interest for late payment, repayment terms, loan opening fees, mortgage constitution expenses, insurance and various clauses.

What is a trust?

The trusts are legal and banking figures to finance projects such as purchase and construction of homes, buildings, apartments and others. In the trust, the bank, financial entity or individual who lent the money makes sure to recover it eventually by controlling the administration of the real estate project.

There are three participants in a trust:

1. Trustee:

Physical or legal person registered before the SUGEF and to whom the property is transferred in said quality. Generally, you are paid a monthly or annual fee by the trust administration.

2. Trustor:

It is the person who transfers the property to the trustee for the loan of the money, so that the latter administers it and ensures the payment of the obligations contracted by the trustor.

3. Trustee:

Who receive the benefits of the trust until the contract between the parties concludes. If the conditions of the trust are fulfilled, the trustor recovers the property or leaves it to the trustee due to the breach of the established obligations.

To process a trust, you should take legal advice, as you will need to undergo a study, as well as a credit, detail your financial history, present various documentation and clearly understand the contents of the trust.

What are the benefits of a trust?

  • The property is unattachable.
  • Lower costs for the person or company that requests it.
  • Tax benefits.
  • The Trustee is duly supervised by the SUGEF.

In Costa Rica, a trust can be extended for up to 30 years and can be extended further.

How does ERP Lawyers protect me from a possible mortgage?

For ERP Lawyers it is essential to protect the rights of each client, so when they sign contracts with banks, financial entities or third parties, our job is to advise them so that their rights are not altered.

We will take care of:

  • Drafting contracts of any kind.
  • Reviewing the contracts that our clients must sign.
  • Verifying that the clauses of the contract are not abusive and fulfilled throughout the agreement.

We will also include basic data in the contract to safeguard the interests of our customers:

  • Full name, nationality, address and ID of the parties that sign the contract.
  • If established with a legal entity, the contract will indicate your company name, registration identification, address and information of your legal representative.
  • Detailed description of the object of the contract.
  • If applicable, the total amount of the contracted obligation, for example: a loan.
  • Periodicity or date in which payments must be made, the amount of each and the place or places to make them.
  • Validity of the contract in terms of months or years.
  • Applicable interest; interest for late payment.
  • If applicable, expenses for commissions or insurance.
  • Detailed reasons why the contract can be terminated. Place for notifications to the parties.
  • Date of the signing of the contract.