Buying Property in Costa Rica

Condominium Property

Condominium property is regulated under Costa Rican law by the condominium Act (ley reguladora de la Propiedad en Condominio) and by the regulations to this Act. As defined in such regulations, all condominiums have two types of areas:

Common Areas: these are all portions or areas necessary for existence, maintenace, safety and enjoyment of the condominium by the owners of individual units.

Common areas are non-transferable.

Individual Units: these are private units that may be owned directly by one or more individuals or corporate entities. Owners may freely transfer, mortgage, lien, lease or agree to convey the unit in any possible way.

The condominium Act and its regulations establish a general legal and regulatory framework for all condominium property. Additionally, more detailed rules and regulations are found in the condominium master declaration and in the condominium by-laws, specific to each condominium.

All condominiums are created upon the execution of a master declaration deed-accompanied by the condominium by-laws. These documents must be granted before a Costa Rican Notary Public and filed and recorded before the Public Registry. On one hand, the by-laws regulate issues such as use of common areas, rules regarding management of the condominium and operational issues related to the homeowners association. On the other hand, the master declaration comprises, among other things, the declaration assigns a percentage value to each unit. This value is obtained from dividing the unit’s area by the area of the entire condominium. This value is of a great importance because it will determine the voting right of each unit owner within the homeowners association and it may also be used to assess the responsibilities of each unit owner with respect to the maintenance and improvement of these areas.

Frequently, condominium by-laws establish the following bodies:

• General homeowners association
• Board of directors
• Administrator

The purpose of the General Homeowners Association is to promote and enforce uniformity within the condominium, and to allow the unit owners to pool their resources for the benefit of the association.

The Board of directors is in charge of controlling the administration and enforcement of the by-laws. Additionally, the board must execute the decisions agreed by the Association. In smaller condominiums, the board is usually excluded and thus, the duties of the board are concentrated in the administrator.

The administrator may be appointed directly by the General Homeowners Association or such authority may be delegated to the board of directors. Among the main duties of the administrators, we can mention: a) hiring, supervising and firing of employees, b) collection of installment and c) acquisition of material and services required by the condominium.

As evidenced, unlike property not under the condominium regime, condominium property is subject to specific rules and regulations comprised in the master declaration and condominium by-laws. These rules and regulations aim to provide higher standards to such properties, usually translating into better investments. Notwithstanding, upon acquiring condominium property, one should assess if these rules and regulations interfere with the desire use and enjoyment.

For information on condos for sale and rent please write to contact@betterhomescostarica.com

Real Estate Title Registration

Costa Rica has a safe and well-develop mechanism for title registration and transfer. At the center of the system lies the National Public Registry (“NPR”) managed by the Executive Branch.  All real estate titles must be recorded before the NPR where a full description of recorded real estate is available to the public (including information such as location, borders, measurement and owner). Also available is a complete history of prior real estate transactions as well as information on pending land transfers, annotations, liens, or other restrictions imposed on real estate. There are two systems in use for real estate registration:

a)      Manual book recordation (tomos): initially used to record land and related transactions. The system relied on handwritten or typewritten books organized by province wherein land was located.  Although this system has not been in use for many years, some pieces of real estate are only recorded in the old books system.

b)      Folio Real: introduced in the 1990’s the system incorporates and summarizes important information about a certain piece of real estate in a single card. Each transaction related to a certain piece of land results in a new card that’s later microfilmed, allowing users to research past transactions. The folio real system also assigns a unique ID to each piece of land located within a certain province. For classification purposes, each province was assigned a number:

      San Jose                 1                                 

Alajuela                  2

Cartago                  3

Heredia                  4

Guanacaste             5

Puntarenas              6

Limon                     7

The first number of the unique ID assigned to each property in folio Real system corresponds to the province. The province number is followed by and separated with a dash from the property number, which typically has four to six digits. Finally, and also separated with a dash a three-digit number. This last number is reserved for properties owned by several owners in different or equivalent proportions (i.e. “000” for a property owner by a single person or entity, or “001” and “002” for a property with shared ownership. An example of the unique ID of a property recorded under this system would be:

Property number:  5 -110456-000

A fourth and final element of a property’s unique ID may be a letter “F”. This indicates that the property is a unit or a “finca Filial” part of a condominium.

Although only available in Spanish, information on the current Folio Real card for any property on this system is available free of charge on-line for anyone with access to the internet at http://www.registronacional.go.cr

Changes in title to real estate, claims related to real estate, liens and real estate transactions in general, must be filled and recorded with the NPR to have an effect on third parties. Supreme Court rulings have consistently upheld that any document not filed or recoded before the NPR does not affect third parties who act in good faith. For example a sale of a lot not filled by purchaser with the NPR would not prevent seller from selling the same lot to a third party who acquires it in good faith nor will it prevent such third party from validly recording the sale. Of course, the initial buyer would have a full legal recourse against seller, but not against the second buyer as long as he acquired the lot in good faith. This clearly illustrates the importance of the system as a means of protecting parties to real estate transactions and providing trustworthy public information.

One of the NPR’s underlying principles is the “first in time first in right” principle, which grants rights to parties in the order in which the document which grant them those rights are filed and made public through the NPR. A second very important and related principle is the succession principle, according to which documents are recorded in the same chronological order in which they are filed.

For more information or advice write to contact@betterhomescostarica.com

Building a House in Costa Rica

Construction

Building a house, condominium, or office space in Costa Rica, can mean a bureaucratic maze of Government regulations.

According to construction law in Costa Rica, any application for a construction permit must be presented by a licensed architect or engineer.

The Colegio Federado de Ingenieros y Arquitectos (the college of Engineers and Architects, or CFIA) license all architect and engineers in Costa Rica, and establishes fee schedule for its members. Most fees are based upon a percentage of value of the construction project.

In fact, CFIA establishes that any project has a two phases, one for construction plans and permits and another for control and execution.

The construction plans and permits phase can be further divided. Preliminary studies may or may not be required, depending upon the range of the project. In the pre-project design stage, the architect or engineer will meet with the client to discuss the construction requirements. With this information, they will prepare drafts of the proposed construction project, which should include site planning and preliminary work drawing, for review by the client. When you contract for this service, be sure you agree with your architect or engineers on precisely what is to be provided.

Construction plans and technical specifications remain one of the most important steps in the overall construction project since the successful execution will depend upon the quality and accuracy of these drawings. Once you and your architect or engineer have agreed on the layout and design of the building, work can begin on drafting these plans.

In Costa Rica, a complete set of building plans should include a site plan, distribution plan, elevation and transversal and longitude perspectives, roof design and drainage, design of footing and support beams, structural plans, electrical design, mechanical and sanitary system design, as well as a plan that details all of the interior finishing of the construction.

It is only when the construction plans are completed the architect or engineer can begin preparing a materials list and construction budget.

The control and execution phase involves the actual construction and project supervision. The regulations authorize three kinds of supervisory tasks, each of which requires a considerable time investment by your architect and engineer.

It is important the architect or engineer, sometimes both, visit the construction site at least once a week to ensure the general contractor is following the plan specifications. They will also verify the quality of the materials being used and review invoices being presented by the general contractor.

It is equally important that there is day-to-day supervision of the project by an architect or engineer, or by someone appointed by them. This helps ensure there are no costly corrections necessary during the construction phase. It is the architect or engineer that takes complete responsibility for the execution and completion of the project.

Before you sign any contract, be sure you understand the fee structure, and know what is, and more importantly, what is not included within the fees. Further, make sure you clearly define the responsibilities your architect or engineer is going to assume. Do the same thing with your general contractor and any subcontractors you or they may take on.

You should also consider conducting some preliminary studies on your property before you buy it. These procedures (your lawyer can help you) ensure you won’t have trouble obtaining building permits when it comes time to build.

First, determine if the lot has basic services such as water, electricity, telephone, and drainage. Second, make sure there are no restrictions on the lot that could result in a permit being denied. It is not enough to check the Public Registry; you should also arrange to check the Ministry of Public Works for future road construction projects; the ministry of Health, the National Institute of Housing and Urban Development and the Municipality where the property is located. Finally, be aware of any environmental regulations, such as national wildlife refuges and areas deemed protected by the Forestry Law.

For more infomation visit Better Homes Costa Rica

Rental Management

Property Investment and Rentals

Anyone who can enjoy and appreciate; open space, the radiating warmth of mother nature, beautiful flowers, magical birds, monkeys and parrots as neighbours, the smell and feel of the ocean, mystic rain and cloud forests, rolling hills and pastures, fresh cool mountain air, OR even the more rapid pace of the metro city - framed by a mountainous, lush green flora ...

There is more to say about the attractions that motivate people to vacation or own a vacation home in Costa Rica then the actual requirements: funds, desire, ability to leave your country and not much more. What will go a long way is a pinch of common sense that should lead you to the right choices.

A non-Costa Rican "foreigner" has the same rights to own property in Costa Rica as do citizens. All have a legal right to ownership which is reflected in the laws and protected by the Constitution. Citizenship nor residency or even presence in the country, is required for land ownership or a vacation home.

There is one exception to the simplistic legal right to own land. Property fronting the ocean or close to the ocean, within 200 meters above the mean high tide, is known as the maritime-terrestrial zone. This zone holds certain ownership restrictions affecting foreigners.
Bon Appetite - there is an endless variety of very special properties for you to choose from. The limit is your energy to search and select the most appealing to your taste. Enjoy your venture.

Primeros, first and foremost ... find the "right" property of course through an experienced real estate agent.

When looking you should be considering the purpose and function of the property; vacation home, retirement property (now or in the future), primary residence, or investment.

The next important consideration is the "location, location, location", in terms of what is important to you.

Weather: rain, humidity, dry climate, cooler temperatures, altitude. Varying conditions exist in different regions, e.g. the Northwest of Costa Rica, Province of Guanacaste, is dryer 1/2 of the year, moderate rain 1/4 of the year, and many beaches.

Terrain: mountainous, flat, dense with forest (wet/dry), road conditions during the wet season (pothole intense, passable/impassable).

Services Available: hospitals, medical/dental clinics, grocery stores, specialty stores, hardware stores, pharmacy, restaurants, gas station, churches, schools, post office, police/fire services, experienced service workers for gardening, domestic cleaning, car mechanics, professional services - property manager, internet services.

Recreation/Entertainment : swimming (pool or the sea/lakes/rivers), snorkelling, diving, sailing, fishing (onshore/offshore), kayaking, horse back riding, golf, lawn bowling, canopy tours, hiking, bicycling, bird watching, internet café, disco, concerts, restaurants, museums, galleries, shopping malls.

Transportation: International and local Airports, bus - private and public, car rentals.

Planned Communities: Gated, guarded, similar home values, association regulations, common area amenities.

Complete home, condo, apt, property management, includes the following,

Hire, general contractors for repair and maintenance of property, gardening [includes watering house plants], pool maintenance, utility payments [cable TV, water, electricity, phone], pest control, A/C maintenance, maid service, security visits.

Rental services are determined by the customer, we customize to what you want

There are short term rentals and long term rentals, we screen the prospective clients for your rental, collect  necessary client documentation, make bank deposits, collect damage deposits, airport pickups, laundry service, clean and maintain the units, inventory checks, short term rental agreements long term lease agreements, contacts via advertising on our website, walk-ins, referrals, work with owners scheduling rentals.

Now ... enjoy yourself and tell a friend to join you and "Come to Costa Rica".

Mi casa es su casa!

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Costa Rica Notary Public

Anyone living or doing business in Costa Ricaquickly notices almost any transaction or administrative paperwork requires one to visit a Notary Public, which might be seen as just an annoying, expensive and burdensome legal step.

Few people really understand what a Notary Public is or what role he plays in the legal, administrative and commercial fields, and most importantly, what a client has the right to expect.

The practice of a notary in Costa Ricavaries a great deal from many English-speaking countries. For instance, in the U.S. or the U.K. , the office consists of a private practice by a common person, who generally functions as a “professional witness”.

In Costa Rica, however, as in most of Latin America , the Notary Public is a hybrid profession, falling somewhere between the Civil Servant and the Liberal Professional. Indeed, the main feature of the Notary Public is that he must serve all those come to ask for his services in his “open-to-the-public office”, as he is invested by the State of public authority or public faith, which basically means that whatever he witnesses and signs acquires full proof value and authenticity, as well as presumption of legality. This calls immediately and logically for specialized studies and academic preparation in the field of law.

Consequently, all notaries in Costa Rica are also lawyers, that is, attorneys-at-law and members of the Costa Rican Bar or Colegio de Abogados. This is important, since as Bar members, they must comply with a strict ethical code of conduct and may be liable for any practice in violation of these rules. Notaries are also subject to strict surveillance by a Public Authority, the Dirección Nacional de Notariado, to which anybody may complain and seek compensation for damages suffered as a consequence of any irregularities.

The Código Notarial, the statute regulating Notary activities, defines the Notary Public as the professional in Law legally authorized to provide the public function delegated to him. The Notary is then defined by the Public function or duty he provides, which basically consists of hearing, advising, modelling, drafting, and certifying or authenticating.

The Notary must first carefully listen what the parties requesting his services have in mind, what they express to him as their will. In turn, using his legal expertise he must advise them of all relevant legal circumstances, provisions, and available options pertaining to what he has interpreted and understood as their true intention.

Once the parties have discussed the matter with the Notary in an informed way, and decided on how they wish to conclude their business, he must then model or shape their will into a legal, effective and acceptable form, and then draft the legal instrument or document containing the transaction. In order to perform this task, the Notary will need to see certain documents to identify the persons and goods involved, such as an official ID (a valid passport, for foreigners), a registry study and map (when the contract deals with real estate), a valid power of attorney when acting on behalf of someone else (the chairman of a corporation, for instance), etc. It is indeed the Notary’s obligation to make sure everything is done legally and that the document he is drafting will be a valid and enforceable one.

When this document is ready, the Notary must read it to all parties, who in turn agree to it if they are satisfied that it encloses their will, and approve it after the Notary has once again warned them of all the legal implications of their actions. It is important to note the document has to be written in Spanish. Where any of the parties involved do not speak or properly understand Spaish, a translator is required, unless the Notary himself speaks the clients’ language, in which case he may do the translation himself.

Then comes the core stage of the Notary’s involvement: he will collect the parties’ signatures, which must absolutely and unavoidably be written personally, and in the Notary’s presence. Only then does he stamp his own signature at the bottom of the document, thus authenticating and giving full public faith to what he has witnessed and authorized, as well as full power of proof to the document and its contents.

The original document remains within the Notary’s Protocol Book as a safeguard legal measure, while the parties are entitled to receive an authentic “first copy” or testimonio, for pragmatic purposes and official use.

Essentially, the main task of a Notary is to prevent future conflicts that could arise among as a result of lack of legal counselling, and vague or poorly-drafted contracts. In short, it is hoped after having read these few lines the Notary no longer thought of as the “guy you pay for a signature”.

For more information please write to contact@betterhomescostarica.com