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(506) 223-1327        Published Monday, Nov. 27, 2006, in Vol. 6, No. 235        E-mail us    
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Title insurance here can cause misunderstandings
By Garland M. Baker
Special to A.M. Costa Rica

Is title insurance legal in Costa Rica?

An Instituto Nacional de Seguros ruling Sept. 29 says that title insurance was not legal in this country but that now it is and has been since July of 1997.  However, insurance officials say the legality could change in the future.

The decree from the legal department of the insurance monopoly explains title insurance is not insurance but a guarantee or a bond.  This finding is a flip flop of the insurance monopoly's last ruling in 1976 that said title insurance is an insurance and that no company in Costa Rica can sell it except for the monopoly known as INS.

The national insurance company became a monopoly with law No. 12 of Oct. 30, 1924.  Only INS can sell insurance.

INS further stated that title insurance is an Anglo-Saxon creation and is not necessary in Latin America or Costa Rica because Roman law governs Latin countries.  According to INS, the Registro Nacional and licensed public notaries make property transactions safer than in the Anglo world like the United States.

In 1997, a representative of a Stewart Title Guarantee Co. asked INS for a new analysis because the company wanted to sell a product called “Guaranty of title for land located in the territory of the Republic of Costa Rica.”

The legal department of INS ruled in a decree dated July 30, 1997, that a title guarantee is not regulated by the monopoly. 

The legal opinion said Article One of the Law of Fidelity Insurance of 1931 precludes fidelity guarantees, also referred to as fidelity insurance, from the insurance monopoly. 

In other words, warranties and guarantees of all types are insurance but excluded by definition from the domain of the national insurance monopoly.

The fine print goes on to explain that a title guarantee is really a bond of fulfillment and not an indemnification.

Most people in Costa Rica believe title insurance is an indemnification.  This is incorrect because indemnifications cover unknown futures losses where title insurance is to cover something from the past.

The cornerstone of title insurance in the United States is the chain-of-title.  Chain-of-title means the history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent.

Different variations of title insurance exist around

Skeptic's view of title insurance

the world. However, it is principally a product developed and sold in the United States.  Title insurance protects an owner or a lender against a financial loss in real property due to title defects and other issues

Title insurance gets a bad rap in the United States because creditors require it to protect lending interests and forced borrowers to purchase it even if they do not want it.  Many believe it is overpriced.

Legal regulators criticize the market because it is full of commission schemes and kickbacks.  The industry mimics other business structures paying high commission to brokers and/or resellers.  Affiliated business arrangements attempt to legitimize kickbacks or commissions to brokers, real estate agencies and attorneys.

Affiliated business arrangements exist in Costa Rica too, and that is why almost everyone is hit with the “buy title insurance” spiel when purchasing property here.

In Costa Rica, title insurance is not necessarily insurance over the title of a property but legal insurance to help pay the legal bills to protect the title of a property.

In theory, title insurance according to the INS ruling guarantees one's right under Article 1038 of the country’s civil code.  Many factors can limit a payoff.  Knowing the “what is not covered” is more important than knowing “what is covered” with any policy.

Is it worth it?  Title insurance is full of hype and it is not the same kind of policy as most North Americans purchase in the United States.  Read the fine print and understand what the warranty truly guarantees in Costa Rica. Good homework and due diligence can save buyers the additional expense.

Garland M. Baker is a 35-year resident and naturalized citizen of Costa Rica who provides multidisciplinary professional services to the international community.  Reach him at info@crexpertise.com.  Lic. Allan Garro provides the legal review.  Reach him at crlaw@licgarro.com.  Baker has undertaken the research leading to these series of articles in conjunction with A.M. Costa Rica.  Find the collection at http://crexpertise.info.  Copyright 2004-2006, use without permission prohibited.

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San José, Costa Rica, Monday, Nov. 27, 2006, Vol. 6, No. 235

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Our readers opinions

Problem not just Caribbean
but in the entire country

Dear A.M. Costa Rica:

On a recent bus trip back from San Jose to Puerto Viejo, I had to bite my tongue at the ticket booth at the Caribbean terminal.
Two American tourists were in line ahead of me buying tickets. I heard the agent actually tell them they should not visit Puerto Viejo because it is so dangerous.
Now, I can´t speak for anyone else, but I´m getting a little tired of the Caribbean getting this bum rap as the really dangerous place in this country when the crime problem is, in reality, a pervasive national problem that is growing worse and more serious by the day.
It took me a while, but I finally figured out that all the talk about the dangers lurking on the Caribbean side has as much to do with unresolved racism, Costa Rica´s own dirty little secret, as it does reality.
During my stay in San Jose, I visited my friend Harry´s Gringo hangout and, within minutes, I´d heard a half a dozen horror stories about assorted robberies, assaults, and sundry other scams that had been perpetrated against expat residents and tourists alike.
Funny thing, though, not one of those horror stories involved the Caribbean. They were all San José- or Pacific coast-based. The ¨southern California¨ town of Jacó, in fact, was featured prominently in at least three of the sad and frightening tales I heard.
For so many people to disparage the Caribbean the way they do is to do a gross disservice to an area, its people, and the rich customs and traditions that are so abundant here.
To be sure, we have our problems with crime. What is most disturbing is the changing nature of the crime emerging here and all over the country. It is becoming increasingly well organized, sophisticated, and violent.
The annoying petty theft that is present in every tourist milieu everywhere is giving way to something that borders on a form of terrorism. Home invasions, attempted kidnappings, armed assaults with shotguns, and violent rapes are just some of the crimes being committed throughout the country.
No geographic area is immune.
To point fingers at one area of the country as being worse than another is little more than an attempt to deny the sad reality that crime is endangering this whole country, both socially and economically.
I work in the tourism industry on Cape Cod in Massachusetts in the summer. I cannot tell you how many times I hear people say things like, ¨You live in Costa Rica much of the year? I hear it is very beautiful but getting very dangerous¨.
Another common tale of woe involves the people I´m speaking to, or someone they know, having  actually visited Costa Rica and, you guessed it, been robbed or assaulted.
Those kinds of stories, unlike happy vacation tales, tend to take on lives of their own and spread like wildfire. They are cancerous in nature.
The longer nothing is done to seriously and intelligently combat this cancer, the more brazen and powerful the criminal elements become, and Costa Rica´s reputation as a desirable destination spot just goes further down the hopper.
This is not a ¨Carribean¨ problem or a ¨Jacó¨ problem or a ¨San José¨ problem. It is a national problem crying out for leadership and guidance from the nation´s leaders to help local police forces and ordinary people find ways to take their communities back from the drug dealers, thieves, and assorted othe punks and pukes who are riding roughshod over us all.
Sadly, that leadership and guidance have been sorely lacking for a very long time. And, Costa Rica may not have that much time left to prevent the kind of damage to its reputation that could prove to be irreversible.
The clock, as they say, is ticking. Not just over here on the Caribbean, but all over the country.
Someone has got to wake up and start listening. Otherwise tourism, the basket Costa Rica has put so many of its economic eggs in, is going to be a dead industry much sooner than many people seem to realize.
Michael Cook
Puerto Viejo de Limon
and North Truro, Massachusetts

Honesty still flowers
in Pacific beach town

Dear A.M. Costa Rica:

It was to be a fun filled “Big Chill” Thanksgiving Weekend, renting a house in Jacó with two other couples.  After all, what could be better than cooking a Turkey while watching a gorgeous, Costa Rican sunset?

We 3 couples were also savvy residents — well prepared for resort town thievery. You see, in prior years, the pizotes had stolen our turkey right off the counter of the kitchen,  as our group left the big bird cooling to say goodbye to the day.
What we were not prepared for was losing passport, money, license, etc., taken not by pizotes, but rather left behind on a chair in the flurry of our reunion at a funky, Jacó café called the “Wishbone.”   The thought of standing in line for hours to replace our Costa Rican license, cédula and credit cards was enough to turn a relaxing weekend into a “Lost Weekend.”

“It’s gone forever” my husband, Barry, said when he discovered that he had left his man purse behind, and the restaurant had closed until the evening shift.
“Maybe not,” I replied.  “After all, what self-respecting Tico would be caught dead with such a girly, metro-man accessory?”   If we ever needed a wishbone, it’s today, we noted as we headed back to town, thinking the worst and hoping for the best.

For any who have uttered a generalization about the untrustworthy nature of the Costa Rican people due to incidents that can occur anywhere,  read on.

The kind and honest wait staff at Jaco’s Wishbone Cafe had indeed secured my husband’s man purse and, despite our protest, would not accept a reward for doing the right thing.   Important to note, that the purse had been well stocked with colons for our holiday weekend and would have represented quite a bonus to a local salary.

This was also the second time we had left behind a valuable in Jacó. The first time, my purse left on the beach at the Best Western in Jacó when we first moved to Costa Rica nine years ago.  That also was returned and again a reward not accepted.

Is there petty and sometimes unfortunately even more violent crime in Costa Rica? You bet.  Do you need to be street smart? Absolutely.  However, I travel 10 days a month teaching throughout the United States, and you know what?  I often feel safer in Costa Rica than in most U.S. Cities.

I also find that whether in the United States or Costa Rica, most people are genuinely honest and kind.  Unfortunately due to the nature of news, we hear most often about the bad and the ugly.  Let’s not forget the good in Costa Ricans and our fellow citizens everywhere.  Let’s think the best and not the worst of each other and let’s always believe in Wishbones!

P.S.:  The pizotes again had their way with us and invaded our beach house — except this time they only got leftovers.

Rosemary Rein
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San José, Costa Rica, Monday, Nov. 27, 2006, Vol. 6, No. 235

San José, who is St. Joseph in English, with Christ Child in hand is in the lead of the oxcart parade Sunday downtown.

A.M. Costa Rica photos/Noel Dekking

Ox cart handlers again bring the tradition to center of the city
By the A.M. Costa Rica staff

Tradition was on the march again Sunday as owners of carts and oxen brought them to town again, signaling another advance toward the Christmas holiday.

More than a hundred of the carts, pulled by twice as many of the placid beasts made their way up Paseo Colón into Avenida 2 where the Rev. Edwin Aguiluz blessed each yunta or pair of oxen, the cart and passengers individually.

The day was partly cloudy and warm, an improvement from the chilly winds of the week before. The oxen were preceded by dancers and musicians.
St, Joseph rode in the first cart, as is the custom, accompanied by a life size statue of Jesus.

Ox cart drivers can win prizes, and all got medals. But the real motivation is keeping alive the tradition. Some young teams were in evidence practicing for future parades. 

For centuries the oxcarts moved the products of the nation. There even is a legend about a haunted oxcart.

Of course tourists and locals swarmed to get photos, and the whole event was televised on Channel 13, Repretel's cultural station. In fact, the station continued with afternoon programming about the history of oxcarts.

Jimena Melina Garcia Blanco and Valeska Paola Pereira Rojas steal the show from a handful of dance groups.

The Rev. Edwin Aguiluz of the San José diocese blesses each cart and yunta of oxen.

The meddler or the nice guy sometimes ends up as roadkill
Todo sapo muere estripado
“Every toad dies squashed.” This dicho has two meanings; if you go about meddling in the business of others, sooner or later you’ll be sorry, or if you try to be too nice, eventually someone will not be so appreciative of your favors and your feeling will get hurt.
One day I was riding with my nephew in Costa Rica. As many of you may know, Costa Rican drivers are renown for their aggressiveness and aren’t particularly well known for their friendliness when behind the wheel of a car. That being said, my nephew and I were waiting our turn at a stop sign when another driver waved for us to go ahead and turn, which we did.

As we rounded the corner I waved back a thank you. But my nephew scoffed, muttering merely “Sapo,” indicating this dicho. I asked him why he said that. The other driver seemed a very nice fellow. “Nice drivers in Costa Rica end up as accident statistics,” he  replied. Ever since then I have been waiting for a chance to apply this same dicho to my nephew, but the opportunity to do so is yet to present itself.
My grandmother used this dicho to teach us that when we did a favor for other people we shouldn’t expect anything in return because to do so would be behaving like sapos, or toads.

Once we were waiting with my grandmother for the train to go to Limón. As was often the case, Granny was tired and complaining. So my father instructed me that as soon as the train pulled in I must rush aboard to find a place for grandmother to sit. When the train arrived and the conductor opened the gate, I pushed ahead of the other passengers, clambered aboard and claimed a pair of very nice seats for Grams and me.

Then my father came into the car and, with a grin, asked where was my grandmother. I said I didn’t know. She hadn’t shown up yet. “Oh, but she has,” he replied. “When the train pulled in she elbowed her way ahead of every one, ran like a 15-year-old sprinter and climbed into the car through an open window! There she is sitting right over there.”

way we say it

By Daniel Soto

Astonished, I looked in the direction he indicated and indeed, there sat my beloved Grandmamma. But, Grandmother, I’m saving this seat for you,” I said indicating the position next to me.

No sea tan sapo,” (Don’t be such a toad) was her curt reply.
One would imagine that I would stop being a sapo to my grandmother, I was always being assigned to help her. Don’t get me wrong, I loved the woman very much. It was just that on occasion she drove me absolutely crazy. Like, for example, when she complained of her arthritis so much that I escorted her to the doctor. But as soon as we got to the office the woman had somehow undergone a miraculous cure and would tell the doctor that she had no pain whatsoever!
I have many memories, good and bad ones, of the people — including my grandmother — who have touched my life deeply. The Thanksgiving holiday this past week has made me think of these wonderful people, many of whom are no longer with us, that were all so good to me. I am thankful for them all. I don’t think that any of them ever thought of me as a sapo, nor I of them.

But then, we  didn’t go around stepping on one another either. After all, there’s nothing wrong with being a sapo as long as you don’t get squashed.

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San José, Costa Rica, Monday, Nov. 27, 2006, Vol. 6, No. 235

Cargo of rice provokes transgenic fears in some Costa Ricans
By the A.M. Costa Rica staff

The U.S. Department of Agriculture has deregulated a controversial strain of rice that is raising concern in Costa Rica.

The company Bayer CropScience LP reported the deregulation last week even as an environmental group here was urging politicians and residents to demand a strict inspection of the next boat load of U.S. rice.

The environmental organization says that the Costa Rica-bound boat may be carrying rice that has been contaminated by the transgenic breed from the United States.  "Peregrine" is the boat in question. The transgenic rice is Liberty Link 601 transgenic strain of rice which was created by Bayer CropScience LP. 

The transgenic markers of Liberty Link 601 are showing up in long-grain rice in the U.S. Southeast, California and other principal production states.

This particular variety of rice has not been approved for human consumption by any regulatory agencies and has been rejected by Japan and the European Union, said the organization, which identified itself as Asociación de Ecología.

However, Bayer CropScience said the deregulation
confirms a preliminary Agriculture Department decision Sept. 8 that said the rice genes do not pose any environmental concerns and should no longer be regulated.

The company noted in a press release that traces of the herbicide-tolerant rice were found at very low levels in samples of commercial long-grain rice. There is no explanation on how the rice genes spread.

The Asociación de Ecología claimed that it was Greenpeace that tipped it off about the boat, and also informed them that the boat is due to arrive on Dec. 2 and dock Dec.8 with 36,000 tons of rice.  The organization is requesting that the Costa Rican government prevent the unloading of the Peregrine until laboratory tests guarantee that Liberty Link 601 is not present.  The report also claimed that Sept. 4, the Corporación Arrocera Nacional, the national rice agency, requested the executive branch take actions to avoid the import of uncertified transgenic rice.

Japan and the European Union also have expressed concern about the rice genes.

Bayer said that regulators have affirmed the rice poses no human health or environmental concern.

Rice is a major component of the Costa Rican diet. The imports were made necessary because the national rice crop fell short.

Correa leaps to a big lead in Ecuador's presidential contest
By the A.M. Costa Rica staff
with A.M. Costa Rica wire services

Leftist economist Rafael Correa has claimed victory in Ecuador's presidential election, as an unofficial quick count and two exit polls show him about 14 points ahead of conservative businessman Alvaro Noboa.

The quick count, released Sunday evening by the election watchdog Participación Ciudadana showed Correa with 57 percent of the vote. Noboa had 43 percent.

Noboa, a billionaire banana tycoon, dismissed the exit polls and the quick count, saying he would wait for official results. This is his third try for the presidency.

The Tribunal Supremo Electoral, the official source, said early today that Correa had 838,019 votes (65.98 percent) and Alvaro Noboa has 432,093  (34.02 percent) with 19.1 percent of the vote counted from 6,992 of 36,613 polling places. The Sunday vote was a runoff between the two.

There are 9.1 million registered voters divided nearly evenly between men and women.
Participación Ciudadana based its declaration on about 1,600 key polling places. One exit poll had Noboa winning, but two others said Correa would be the winner.

Correa said that the people of Ecuador have the hope of getting a new country. He met with reporters after the polls closed, according to Ecuadorian newspapers.

Correa declined to call the Fuerza Armadas Revolucionarias de Colombia terrorists, although he said he hopes to improve relations with Alvaro Uribe, the Colombian president.

He said he would like to see Ecuador rejoin the Organization of Petroleum Exporting Countries. Correa is likely to take Ecuador out of the war on drugs encouraged by the United States and the future of the air base being used by U.S. planes near Mata is in doubt.

Both Noboa and Correa ran on populist platforms promising to improve the lives of Ecuador's poorest citizens. This weekend Noboa said he would reject a free trade pact with the United States, an apparent effort to grab some last-minute support.

Defense nominee Gates wanted to blast Nicaragua in 1980s
By the A.M. Costa Rica staff

Previously classified documents reveal that President George Bush's nominee to be the next Defense secretary had advocated military action against the leftist government of Nicaragua in the 1980s.

Documents released Friday by the National Security Archive, a private research group in Washington, say Roberts Gates, who in 1984 was the second-ranked official in the Central Intelligence Agency, submitted his recommendation to then CIA Director William Casey.

In a memo to Casey, Gates warned that Nicaragua's leftist Sandinista government would become a key ally of the
Soviet Union and Cuba, and expand Communist influence into Central America.

Gates dismissed efforts to support Nicaragua's Contra rebels as "halfhearted," and laid out a four-point plan to overthrow the Sandinistas that included airstrikes. His proposals were never seriously considered by officials in the administration of then-President Ronald Reagan.

The administration was later plagued by revelations that it had secretly sold arms to Iran and used the money to fund the Contra rebels, in violation of a congressional mandate.

Ex-Sandinista leader Daniel Ortega was elected Nicaraguan president this month, 16 years after he was voted out.

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