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REAL ESTATE ISSUES IN COSTA RICA REAL ESTATE ISSUES IN COSTA RICA In this section we are working to help educate those of you that wish to purchase a property or home in this beautiful country. Like every other country, there are laws and information that you should understand in order to help make this an enjoyable and comfortable experience THE NATIONAL REGISTRY & PROPERTY DESIGNATIONS Technologically Costa Rica is well advanced regarding property registration, but there are still some lingering laws and legal designations of properties that for the prospective purchaser warrants proper due diligence and the advice of an experienced realtor. The Registro National, the National Registry in English, is a fully computerized government managed system for the registration of property in Costa Rica. All “registered” properties can easily be found in the registry. The fact that the Registro National is a fully computerized system has helped to create some much needed safeguards related to property ownership in Costa Rica, as well as property acquisition. The National Registry can be accessed via the Internet. This makes it very easy for a realtor or other professionals to conduct a search on a specific property to see if there are any encumbrances, liens or annotations on the property. Any experienced realtor can easily access the National Registry and perform the required due diligence to determine a properties status. The following are the more common designations a property can have in Costa Rica. Titled Propertyty – As the name suggests this is property that is titled and the seller can offer this title with the property. The seller will have a “plano catastrado”, a survey plan, which clearly indicates the coordinates of the properties boundaries, the size of the property, all the appropriate registration numbers, stamps and signatures that demonstrates the property is registered in the National Registry. This can then be reviewed via the Internet, and double-checked to make sure all is okay with the property. (i.e. liens, encumbrances, annotations) The deed or escritura will have been prepared in the lawyers “Protocolo” book. Once the deed is signed the lawyer takes the protocolo book to the National Registry and submits the new deed. Legally this can be, and must be done with in 14 days, of the date of the transaction. However, to protect the new buyer, it should be done immediately. The property will immediately have an annotation attached to it making note of the new ownership. It generally takes thirty days for the National Registry to issue new documentation and to make the required changes to the registration (ownership) of the property. Concession Property or Maritime Zone Propertyty - This property designation, Concession or Maritime, is probably the most miss understood property designation by foreigners. The reason being, most relate it to what they have heard about “concession” properties in Mexico. The two are completely different. Approximately 85% of Costa Ricain order for the government to rescind a concession they have to pay the concession holder the appraised value of any and all improvements to the land, be it a home, condos, business or hotel. The law governing concessions only allows for Costa Rican’s or a Costa Rica corporation to hold concessions for Maritime Zone properties. There seems to be some conflict as to the validity of a concession owned by a Costa Rican corporation, which in turn has a majority of the shares of this corporation owned by a foreigner. The bottom line is that many foreigners in Costa Rica have concessions to Maritime Zone property and there has yet to be an instance where the Costa Rican government has forcefully taken back a concession that was in good standing. Unregistered Land – In Costa Rica there still remains a significant amount of land that is not surveyed, does not have a survey plan and is not registered in the national registry. Purchasing a piece of unregistered land is not uncommon or difficult. The first step in purchasing unregistered land is getting the land surveyed, and producing a plano catastrado (survey map) of the land. Then the prospective buyer needs to make sure that this new survey plan and its boundaries match those of its neighboring properties. It is wise to check against the overlapping of property lines, and or the possibility of extra land or less land being purchased. The property can be purchased and the new survey registered in the national registry and the property then becomes a registered titled property. There are other designations of property in Costa Rica but the above are the most common. If you are purchasing property in Costa Rica be sure to use a competent attorney and realtor to check and verify the status of the property being purchased.d. Written by Scott A. MacDougall, an expat with over 10 years of living and working in Costa Rica, specifically involved in the real estate, construction, and land development industries. During this time Scott worked as the Director of Marketing and Sales for the two largest and most successful resort community developments in Costa Rica. WHAT YOU SHOULD KNOW ABOUT REAL ESTATE AGENTS IN COSTA RICA!
During the last five to ten years Costa Rica has become a country that many foreigners have selected as the location for their new home, vacation property, retirement property or investment property. During this time the real estate industry has experienced phenomenal growth. This growth will continue at a steady rate over the next fifteen years as over 60 million North Americans will retire during this time period, and many will look to Costa Rica for that little piece of paradise to call home. The first thing that anyone looking to purchase real estate in Costa Rica should do, as they would in their home country, is to seek the advice of an experienced professional realtor. The reasons for this may be more profound in Costa Rica. You may be asking why? As a newcomer to a foreign country, you will not be familiar with the local laws that govern real estate transactions, the laws pertaining to the ownership of property, the various legal designations of property and the general do’s and don’ts related to purchasing a property. This knowledge is critical to ensure you do not meet with any surprises along the way. An experienced professional realtor will ensure this is will be a transaction where you are informed and comfortable at all times. One of the most important pieces of information you should know as a prospective buyer of property in Costa Rica is that realtors are not licensed here. There is no entity in Costa Rica that acts as a watchdog over the real estate industry and the real estate agents. Anyone can sell real estate in Costa Rica and because of this; it makes the expression “buyer beware” take on more serious significance. It is common knowledge that realtors make their livelihood from commissions received when they sell property. As there is no license to lose, and the need to put food on the table, some realtors may slightly embellish the actual attributes of a property or a home. This one aspect alone should make you understand that the process of selecting your realtor is something that you need to do with a critical eye. There are however two associations that realtors can become members of; the oldest and most well established of these associations is the Camara de Corridores de Bienes Raices. Established in 1974 the CCBR has a membership of 220 realtors. The second is a newly formed association founded in Guanacaste and is called the Guanacaste Association of Realtors (GAR). Members of the associations pay annual dues, share listings, and work to create a more formalized procedure for purchasing real estate, thereby helping to make the purchase of a property, a safe and secure process for the buyer. Additionally, the Associations work to educate their realtors and have ethics policies that its members are suppose to abide by. Both are lobbying for the establishment of mandatory licensing for all realtors. Now having said all of that, the reality is that, whether or not a realtor is a member of either or both Associations some will be good and some will (I hate to say it), be bad. There are some basic characteristics that you can look for in a realtor that will help you end up with a good one. Professionalism - is one of the key elements that all good realtors have. It is the general packaging of the realtor. Professionalism incorporates a broad spectrum of characteristics. Experience & Knowledge – The two go hand in hand and like any other profession, an experienced realtor will definitely make the process of purchasing a property a more comfortable experience than a non-experienced realtor. Their experience and knowledge is directly related to the time they have lived and worked as a realtor in Costa Rica. Organization – Take note of how well organized your realtor is. Do they have all the information they said they were going to have and is it current and accurate? Is their office well organized and orderly? Appearance – Though seemingly not important, appearance is important. Your realtor should have enough concern for themselves and their level of professionalism to be attired appropriately, and well groomed. Punctuality – A good realtor will return your phone calls, as well as answer your e-mail inquiry in a timely manner. They will be on time for appointments. Tico time does not apply in the business world, even in Costa Rica. Customer Service – Real estate is a service industry. The good realtors go beyond what is expected of them regarding customer service before and after the sale. Is your realtor giving you the service you expect? Are they willing to work hard to find you the property that is the right property for you, or are they trying to sell you that property that is the right property for them? Pressure – The old hard sell is alive and well in Costa Rica. If you feel any pressure at all from your realtor an alarm bell should be ringing. Do not allow yourself to be pressured by your realtor. Do not buy that one and only deal of the century because someone else may buy it tomorrow. A good realtor will not pressure you at all, and should work to ensure that your purchase is a comfortable one for you. Good properties sell themselves. Your realtor is responsible to find out what fits your needs and show it to you. Take note of the above and use common sense when dealing with realtors in Costa Rica. Do not hesitate in slowing things down, and seeking second or third opinions. There are many truly professional and experienced realtors working in Costa Rica that perform their duties with one goal in mind. That goal is, complete customer satisfaction. Look hard, be critical, don’t settle for the first realtor you run into and shop around. Find the one that you feel most comfortable with. Use your common sense. It constantly amazes me how many people for some inexplicable reason leave their common sense at home. Yes, Costa Rica is an incredibly beautiful country. Yes, the people are incredibly friendly. Yes, this is a great place to live. Yes, it is a very advantageous time to consider purchasing real estate here. Work with an experienced professional realtor to help you acquire all the information and knowledge you need to make a comfortable and informed purchasing decision and you will end up with that perfect piece of Paradise that you wanted, and it will be done in the manner you hoped for and expected. WHAT NORTH AMERICANS ARE BUYING IN COSTA RICA! For the past ten years, it will be eleven this November; I have been involved in the real estate, construction and land developments industries in Costa Rica. More specifically I have been involved in direct real estate sales during this entire time period, be it as a sales agent, or sales team manager. The following is a brief description of the five different but very identifiable property types, which 9 out of 10 prospective purchasers wish to see. Fully Amenitized Gated Community These are large pieces of property that have a fully developed master plan that includes all the amenities, services and facilities that are common to resort communities in North America. The communities typically include an internationally recognized hotel operator, a golf course, tennis, pools, owners private social club, bars, restaurants, and may include a marina, or equestrian facilities. There will also be a variety of condos, homes and lots being sold in and around the golf course as well as other areas with in the gates of the resort property
Costa Rica presently has two fully amenitized gated resort communities open and operating. They are Los Suenos Resort and Marina, and Conchal Resort. Hacienda Panilla Resort has a golf course and small hotel open, and the Peninsula Papagayo Project is open its Four Season Resort Hotel and Arnold Palmer Golf course sincce early 2004. Gated Estate Lot Development (¼ acre to 2 acres) Many buyers do not wish to be in an overly Americanized high density gated resort community but do want the security of a private gated community. They wish to have more space, more privacy, design their own home, and yet remain close to the services and facilities they desire. The community will have a property owners association, and will have associated By-Laws. There is a number of private estate lot or lot developments in Costa Rica. The majority of these lot developments offer ocean views, while others are able to combine ocean and sunset views. Buyer of these types of lots should only do so after all the infrastructure has been installed, the water, electricity and roads.
Gated Private Large Lot Development (3 acres to 10 acres) This is a product for those that wish to remove themselves a little further from the higher traffic areas. They want to be surrounded by lush green jungle and truly be in a semi-remote area. The lots range in size from 3 acres to over 10 acres but still have a gated secure entrance as well as some common area facilities. The communities are located a short drive (30 minutes) from most of the services and amenities needed such as shopping, restaurants, bars, golf courses and marinas.
Beach Front Stand Alone Condominiums This property is for those that simply want a condo on the beach. Nothing else will do. Typically these will be smaller sized condo project due to Costa Rican regulations governing construction with in the Maritime Zone. The Maritime Zone is the first 200 meters of land from the median tide level. All but approximately 15% of the entire coastline of Costa Rica is Maritime Zone. The balance is titled property. Buyers of beachfront condos should be aware that as these condos are in the Maritime Zone they will be a concession property which the buyer will receive a lease from the Costa Rican government. Being a concession holder in Costa Rica is in most cases the only way to “own” beachfront property. This property type has been fully explained in previous articles and can be further explained by a competent attorney. It can be a safe secure means of having beachfront property in Costa Rica.
Income Generating Property There are those that wish to make a property purchase here in Costa Rica, and have it be an income generator. There are some distinct projects that offer such villas or condos. The villas or condos are on an existing resort property. The hotel acts as the property manager, and the villas and condos are aggressively marketed and rented. Monthly maintenance fees are charged and cover a variety of expenses, the most common being the landscaping, maintenance and security costs. One of the great aspects of this type of property is the fact that when you close the door, and walk away, you have not a single worry about your home, all is taken care of for you, and it will be making money for you while you are away.
Do’s & Dont’s - Buying A Lot ! As Costa Rica is a relatively new market source that has emerged for vacation and retirement property, many of the properties are in various stages of development. Truly we are in our infancy as a real estate market and as such there is a tremendous amount of opportunity for growth, as well as a need to mature. If you are considering purchasing a lot, be it beach front, ocean view, non-view, central valley or off somewhere nice and quiet, you will either be purchasing a lot in some form of gated community, or a lot off on its own. Regardless of where you are buying the lot, you will be confronted with the same concerns to ensure you receive what you are paying for. The primary concern is that the property is free and clear of any lien, encumbrance, or annotation. Your lawyer and or realtor can check this for you as the National Registry can be viewed via the Internet, and the status of all registered properties can be easily checked. Secondly, you need to be concerned about your services, water and electricity. If you are purchasing a lot in a gated community or development and services are not readily available, meaning installed, I would be cautious. In your contract you should clearly state water and electrical service will be available at the property line. Make sure you get a contractual agreement that it is to the property line, not simply that it will be available. You need to also be concerned with drainage and erosion. Take a look at the surrounding land or properties (up, down, all sides) and determine where the rain water is going to drain. Make sure that proper drainage systems and erosion controls are in place. Make them a part of your purchasing contract if they affect your property and or the road getting to your property. If you are purchasing a lot that is on the side of a hill and has been cut and or filled, request that a compaction test be done to ensure that the land is stable and can be safely built on. At the same time you should request a perk test as well because more than likely you will have to put in your own septic system and you need to ensure it will drain properly. Lastly, if you are buying an ocean view lot, and or you wish to have a private lot, look around at the neighboring lots and site plan if it is in a development. Make sure the future neighbors will not disturb your privacy or block your view. Review the registered restrictions on the neighboring lots if you are buying in a development. Buying land in Costa Rica really is not different than buying land anywhere else. Take your time, be thorough, and seek the advice of experienced professionals to assist you. |
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