Tigre

My first visit to Costa Rica was in 2002. I immediately fell in love with the warmth of the climate and people. After spending two weeks in San Jose, Puerto Viejo on the Caribbean side, and Tamarindo in Guanacaste, I knew there was a good chance I would return sooner than later. Sooner came just 6 months later when my uncle mentioned he was flying down to Costa Rica to close on a piece of property in the Southern Pacific Zone. On that trip I found my own piece of paradise above the small town of San Buenaventura, home to the San Buenas Golf Resort. Two years and 8 trips later, I decided to move to Costa Rica full time. Every day I am thankful for that decision.

Aug 012012
 
dollar+airplane+scarlet+macaw

The strongest principle of growth lies in the human choice.   – George Eliot

Now that the Costanera Sur (Coastal Highway) has been completed, the new international airport for the southern Pacific zone is the single, most popular, regional question we receive. Most investors want it. Most environmentalists are alarmed by the thought of it. But, everybody wants to know how it is progressing and when/if it will be built.

dollar+airplane+scarlet+macaw

Can money and a safe environment co-exist?

As per a recent report in the July edition of Enlace, a small local newspaper here in the southern Pacific zone, the Costa Rican government just concluded a meeting to determine the future of the International Airport in the area.  They also discussed how this airport would also be the 1st “green” airport in Latin America.

Another Airport Article?

I’m skeptical when I see news articles for the new International Airport in the Sierpe/Palmar area.  There has been talk of building this airport since I moved here in 2006.  Although Costa Rica has developed by leaps and bounds over the last 10-15 years, slow progress is the custom here.  The difference with this recent announcement is Continue reading »

Jul 192012
 

My uncle, who is now retired in Costa Rica, just sent me a link to this video. Quality video footage from the 1940s is difficult to find, and it got me thinking. This is not “real estate” per se, but it IS a look back at a younger version of the Happiest Place on the Planet.

Interestingly, the year after this film was released, Costa Rica experienced a very short yet bloody civil war. Although it only lasted 5 weeks, but 2,000 citizens lost their lives. The Communist-leaning government of Calderon Guardia was overthrown by a rebel contingent led by Don Pepe. In addition to eliminating the (more) corrupt Calderon government, many other progressive changes came out of this uprising– the standing Army was abolished, women were awarded the right to vote, and full citizenship was provided to the black population living and working in Costa Rica.

Unlike many of the countries to the north and south, Costa Rica has experienced relative peace and prosperity. Perhaps the best news is Latin America’s longest running democracy (Costa Rica) continues to set a progressive agenda in the areas of environment, education, and sustainability.

At times it can be beneficial to look back in order to appreciate the moment. Much of the playful sentiment that is captured in the film continues to unfold on a daily basis in Costa Rica. In fact, the shots of the banana plantations remind me of the drive out to Sierpe, a popular launching point for dolphin and whale excursions, as well as, hiking tours in the Corcovado National Park.

Enjoy the video, and feel free to recommend our blog to friends and family. Saludos.

Jul 122012
 
Costa+Rica+Secret+Beach

I know what you’re thinking, “That’s beyond obvious, Mr. Guy In The Zone.” For those who tune into this blog on a regular basis, I agree… BUT, did you know that the search term “Where Is Costa Rica” gets over 13 million global monthly Internet searches? Two things came to mind when I saw this statistic—

  1. The Pura Vida Buzz, a phenomenon I will expand upon below
  2. Rising Interest in Vacation and Retirement
Costa+Rica+Secret+Beach

Searching for Costa Rica…?

The Pura Vida Buzz — The last time I asked the question “Where is Costa Rica?” I was waaaaay back in college.  My roommates were surfers, and they mentioned Costa Rica as a possible surf destination.   Search engines weren’t as populated with information in the early-90s, but there were a few travel books in the local bookstore.  The thing I remember jumping out at me was the color green.  Whether it was the frogs, the jungle, or the aerial views… Continue reading »

Jun 242012
 
aerial+view+building+Costa+Rica

Yes, we moved… from our office in Uvita to a new, larger space in Ballena, just a quick drive down the Costanera Highway. Ballena and Uvita are both home to the Marino Ballena National Park, an area that is vibrant with wildlife, as well as, electric green and blue hues.

Ballena is only 7 kilometers south of Uvita, at kilometer marker 169. Our new office is in the same building with the used clothing and furniture boutique Adorable and the Roadhouse 169, the hottest new restaurant and bar along the Costa Ballena. If you want to find us on a Google Earth map enter: 9° 7’23.84″N by 83°42’4.88″W.

aerial+view+building+Costa+Rica

Courtesy of JP Cudahy, Aerial Photog

Why did we move?

The landscape of Costa Rica real estate continues to evolve.  As wonderful as a prime location with big windows sounds, 99.9% of buyers do not window shop and buy.  In fact, plunking down $100,000 for an ocean view lot while on vacation (a phenomenon that was a frequent occurrence as recently as five years ago) is more rare than a Resplendent Quetzal at the beach.  The three primary ways potential buyers contact us are–

  1. Google “Costa Rica real estate” or “Dominical (or Uvita) houses for sale”, or some version thereof, and find this blog or our listing website.
  2. They view one of our property videos or Talk Shows on our You Tube channel.
  3. Visit Dominical.biz while planning their vacation Dominical and areas south like Uvita.

If you need to sell your property here on the Costa Ballena, please contact us by phone at 011-506-2786-5407 or email us at info@guysinthezone.com.  If you want a little more information on the best way to list your property, including our new Modified Exclusive program, please watch this video.

For those sellers who are already taking advantage of this service, do not worry.  We are in constant contact with the other agents in the area.  They are aware of your Modified Exclusive Listing. In fact, I am showing three of these exclusive properties today!

KM 169

If you follow the kilometer markers south out of Uvita, you will quickly arrive at km 169.  The building (pictured above) is just before the turn for the Crystal Ballena Resort; on the right (or beach) side of the highway.  So… come on down, grab a beer from the bar, and let’s talk real estate.

google+map+new+office

See you soon!

May 292012
 
signing-costa-rica-real-estate-contract

About a year ago, my business partner Ben, with his unique perspective on Costa Rica real estate, wrote about the changes with “escrow accounts” in his blog article- Wire Transfers, Escrow & An Investment Idea. He explained,

For years we have used a rather casual system here in Costa Rica by which lots of land was bought & sold. Buyers generally put 10% of the purchase price of a piece of property into escrow while we real estate guys and the lawyers went about being duly diligent making sure that the property was what it claimed to be. That money was put into what we called an “escrow” account.

signing costa rica-real estate contract

Escrow makes closing easier.

Well, as it turns out, those escrow accounts were anything but actual escrow accounts.  They were simply the attorney’s business bank account and he held the money pending the closing when he would then disburse the funds.

The process of buying a house or land in Costa Rica did include fewer steps, although I’m not sure it was necessarily a clearer or safer process for buyers and sellers.  Although we haven’t experienced any issue in our office, we have heard a few stories of deposits not being returned due to defects in the title or terms of the Purchase and Sale Agreement.  That is not the case now, as everything is clearly explained in the legal documents for a deal.

Escrow Companies In The Zone

Last week, we was visited by two lovely ladies from Stewart Title Company.  Even though our companies haven’t worked together (yet), they wanted to drop off their business card and a one sheet on “How To Open An Escrow Account”.  They went through it line by line and the words “Blog article!  Blog article!” kept echoing in my head.  It’s the life of a writer who also happens to be a Costa Rica real estate professional.

Ok, so you find your dream property in Costa Rica and negotiate a good price.  Your lawyer drafts up a Purchase and Sale Agreement, and all of the terms (including the escrow information) are contained therein.  Usually, your lawyer will recommend an escrow company he or she has worked with successfully.

These representatives typically speak English, and here’s what your escrow agent is required to ask for—

  • Two Forms of Identification (think- passport number and driver’s license)
  • Escrow Agreement (Stewart Title said it was 6 pages and basically summarizes terms of the deal)
  • KYC (Know Your Customer) Form (applies to individual shareholders of acquiring corporation with at least 10% of the shares)
  • Proof of Income (Tax Returns, W2 Form, CPA Letter, etc.)

The last one, Proof of Income, often raises the eyebrows of prospective buyers, but escrow companies have to ask for it since the Bank Secrecy Act was tightened when the Patriot Act was passed.  The IRS and other government agencies just want to make sure people are not laundering money in a foreign country like Costa Rica.  Simply put, banks in Costa Rica now require a legal document for private transfers of large amounts of money.  They will not release the funds to the seller if it is not provided.

There are still instances when property transactions and large amounts of money are kept out of the banks, but understandably most people don’t feel comfortable living with a stack of money in their house (even in a safe,) and I don’t blame them.

Depositing Monies In Earnest

Most sellers require a minimum of 10% of the purchase price to be held in escrow.  This is the earnest deposit.  This deposit is sent to the recently opened escrow account and tied to the terms in the contract.  If there is an issue that wasn’t disclosed or degrades the property in a significant way, the buyer can elect to cancel the deal and have their deposit returned.  Other common “terms “ that can result in a seller requesting their deposit back are—

  • Title- Issues can include improper registration in the National Registry (Registro Nacional), clouded ownership, probate, etc.
  • Property Size- Normally, contracts stipulate that “the size (in square meters) of X property will not differ more than 3% from register survey; however, I have never experienced a deal that did not close because of this issue.
  • Liens/Encumberances- Restrictions on the title/property that can be financial, environmental, or legal.

The vast majority of times, a good lawyer will uncover some aspect of the property (referenced above) that requires clarification and/or fixing.  In rare cases when there is no solution to the problem during due diligence, the buyer is able to request their deposit be returned.  Escrow isn’t the most exciting aspect of buying Costa Rica real estate, but it is important and it does work to the benefit of sincere parties.  Pura vida.

May 222012
 
alt="off-the-grid-house-in-costa-rica"

My business partner Ben likes to call them the “End of the World-ers”. People who have reason to believe there will be major global changes in the near future. They are interested in buying land and living off the grid in Costa Rica. By off the grid I’m referring to not being connected to the government-run electrical system. They are looking at Costa Rica as a relocation option, because of favorable factors like- weather, low taxes, friendly culture, good health care, etc. Recent “End of the World” clients include– a couple from France interested in le Costa Rica, a large family from California tired of the rat race, an eco-hotel group from Switzerland… clearly, living off the grid in Costa Rica is on the global radar.

solar powered cabin in costa rica

Off the grid… in the jungle.

If you’re anything like the aforementioned relocators wanting to buy land here, you’re in luck!  There are many big fincas (Spanish for farms) in this renewable energy Eden.  We use the term farm, but only a very small subset are actual working farms with barns, cows, and roosters.  Drive 15 minutes into the mountains above Uvita or Ojochal and you can find stunning property with flowing water; some even have ocean views!  The best news is you can grow many different types of food in the mountains of Costa Rica.

Most big fincas range from a short walk to town (and close to electricity lines) to 25-minute 4wd dirt road drive to town and no electricity for kilometers.  The beauty, privacy and value of farms way up in the mountains are exemplary, but what to do about power?

Solar

Installing a solar power system is smart, especially in the southern Pacific zone of Costa Rica.  This region sits at around nine degrees North of the Equator which offers 12 hours of Sun/day, and there is relatively little variation throughout the year. Solar panel energy production is calculated at half that number (6 hours) in rainy season and/or at higher elevations that often have more clouds cover.

Reportedly, Costa Rica has agreed to lift the tariff on imported solar panels and accessories, so the price to install a solar system shouldn’t be as cost prohibitive, moving forward.  Solar systems with batteries for storage are completely self-sufficient.  In addition to solar panels and an inverter, this type of system requires batteries to store the energy created for use at a later time.

If you’re going to be off the grid, experts recommend an alternative energy source to compliment the primary system.  This is especially true during months with heavy rainfall/cloud cover (September-November).  Gas-powered generators are nice to have, but for truly sustainable off-grid power, you’ll want to consider hydro or wind turbine options.

Wind and Hydro

If you think about it, wind… is actually a form of solar energy. The earth’s atmosphere is heated unevenly by the sun and this phenomena (modified by different terrain—bodies of water, vegetative cover, etc.) creates wind.   We see a version of this here in the southern Pacific zone of Costa Rica.

Every day around 10am, an ocean breeze blows on-shore.  This breeze lasts for five or six hours and tops out at around between 8-10 knots.  Most (affordable) wind turbines need more than 10 knots (11.5 km) to generate substantial kilowatts/hour number.

Hydro power, on the other hand, is viable option if your property has a river on it with a significant drop in elevation.  According to Paul at Osa Water Works, these small-scale hydro systems can produce over 2kw/hour (that’s 48kw/day!).  Paul bases energy consumption at around 30 kw/day as an average.  Obviously, that average will be higher if you have a swimming pool on your sustainable farm, but something tells me that’s probably not high up on your list.

Rio River In Uvita Costa Rica

Rivers = hydroelectric potential in Costa Rica.

What is high up on the list is water.  Fresh water, usually in the form of natural springs and rivers, or a year-round creek at the very least, is a must.  If you are going to buy land and live “off the grid”, you would be smart to buy a property with a river running through it or along one of its borders.  This is one of the few continuous (as in 24 hours per day continuous) renewable power resources on the planet.

There are a couple of details specific to Costa Rica, namely obtaining a concession (i.e., legal right to extract water from a given source).  In the interest of providing legit information, I asked hydro-expert Paul Collar at Osa Water Works about concessions as they relate to hydro-systems,

“Technically, you are not mandated by law to have a concession for any water extraction.  However, you are expected to apply.”

I asked him if the river had to run through the property or simply run along one of the borders.

”You do not have to own the land adjacent to where the water is being extracted to secure a concession, BUT, you must bound the river at some point, preferably continuous to the property where the water is to be extracted.  As part of the concession application, you ARE REQUIRED to make the bounding property owner aware of your intentions and he must either sign off and agree to your request… or alternately you must sign (and have a witness sign) to the effect that the bounding property owner was made aware of your intentions but refused to sign the form in question… however, having an agreement between the parties is infinitely preferable as a hostile relationship poisons the well.

I found Paul’s comments (and pun) insightful, and many others seem to agree given his business activity has remained strong during the downturn.  Although not specific to “off the grid” clients, his final thoughts on Costa Rican governments move to allow small scale, alternative energy systems (solar, wind, hydro) tying into the grid.

“ICE is presently in negotiations with Setena and MINAE to ELIMINATE the requirement of a concession (for grid-tie systems).  At present, the wording is that a concession must be in hand for a completed grid-tie hydro authorization, but since concessions take up to two years and ICE is fully behind their grid-tie initiative, this agreement is expected to smooth the path to hydro permitting for most. 

For an overview of Water in Costa Rica, I wrote a two part article a couple of years ago.  Costa Rica is considered one of the more “green” or environmentally conscious countries in the world.  The government has repeatedly stated its intention to be carbon-neutral by 2021.  That’s only 9 years off, and it’s one of the reasons Costa Rica real estate is on the radar of many people who want to relocate and live a more independent and sustainable lifestyle.

For more information on Costa Rica real estate, browse our listings at: www.propertiesincostarica.com  or contact us on our contact page here.

For more information on alternative energy systems in Costa Rica, contact Paul Collar at Osa Power and Water 011-506-8704-0027 or visit his website:  www.osapower.com .

Easements… Made Easy!

 Posted by on May 19, 2012  For Buyers  2 Responses »
May 192012
 
Legal right of access in Costa Rica real estate

The fact that you are reading this article means you are interested in purchasing or selling a piece of Costa Rica real estate.

For buyers, let me first lead you through a visualization to help attract the perfect property… You drive up a well-maintained gravel road and turn onto a large, flat building area… A cool ocean breeze is blowing as you step out of the car… the 180 degree view stretches from emerald mountains to a wide and tranquil blue horizon. After days (dare I say years) of searching, you’ve finally found it!

Servidumbre de paso in Costa Rica real estate

Servidumbre de Paso in Costa Rica.

The next step is getting into the details.  The property boundaries are clearly defined for you using the registered survey (el plano catastrado).  Upon closer inspection, you see a squiggly line labeled servidumbre is running inside the boundary.  What is that squiggly line, and is it even important?

In Costa Rica, a servidumbre refers to an easement.  It provides a legal right for the owner or owners of a property touched by the easement.  Without getting too technical, the “dominant” property is encumbered and the “servant” property is improved by the easement.  Even if the dominant property is subdivided and sold to new owners, the new properties created will carry the legal title of the servidumbre.

There are instances when an easement is not labeled on the plano, but (if done correctly) they are registered as a “lien” on the title.

Types of Servidumbres

Servidumbres provide value for property in the ever-growing and changing landscape of Costa Rican real estate. They come in a variety of distinctions and protect a variety of interests—

  • Access to a property, often through another property  (Servidumbre de Paso)
  • Water, the right to use a water source and/or maintain water lines (Servidumbre del Acueducto)
  • Environmental, like extracting road material like rock/stone (Servidumbres de extracción de materials)
  • The View, often important with ocean view property (Servidumbre de Vista)

Protecting “The View”

View easements have played a part in a few deals in the past.  Our friend Eduardo Abarca Vargas, who happens to be an excellent lawyer in Uvita, helped me understand the details of this important property detail.

There are a couple of ways to legally describe view easements.  The first is a description based on the numbered boundary points on the plano . (see illustration)  The description (always in Spanish) could read ¨the easement will affect the area of the property within the boundary point 1 and 3 of the property.¨

The second method is when a certified survey crew uses GPS coordinates (lat./long. and elevation).  Based on that data, the maximum height of buildings, trees, towers, etc. on the property below are stated in meters.  Eduardo explains, “One of the most important items is to state the direction the view will be protected, for instance, the easement will protect the view towards the ocean.”

Costa Rica real estate sample plano with easements

What is a Servidumbre de Agricola?

These Legal Teeth Are Sharp

That’s one of the best things about servidumbres; they have legal significance that cannot be separated from the estate or piece of land to which they are registered.  We know of a few cases where a property owner has tried to prevent access along a servidumbre de paso by putting up a gate.  Thanks to the easement, a judge ordered him to take it down under the supervision of the police.  Legal costs aside, there is no cost to having a servidumbre other than paying for any work associated with enjoying the easement (e.g., road or water system maintenance).

Normally, easements are granted into perpetuity and remain unchanged when the property is transferred to new buyers.  There are only a few ways an easement can be dissolved:

  • The owner of the dominant estate acquires ownership of the servant estate or vice versa.
  • Waiver from the dominant estate holder, although such waivers have to be reviewed by a judge.
  • No use. Typically, it takes between 10 and 20 consecutive years of non-use to dissolve an easement.

New servidumbres can be registered, but they require the written agreement of all of the owners of a property.   This can be challenging when dealing with a large family farm, but not impossible.

Due Diligence

As I mentioned, easements can be found on the registered property survey and in the title, recorded as a “lien”.  They are discovered during the due diligence phase of buying your property.  Click here to read more on the stages of buying Costa Rica real estate.

I may sound like a broken record, but I can’t stress the importance of a good lawyer enough.  If you want to ensure your dream property doesn’t have any “surprises” get a good one with years of experience with property transactions.  Our legal associate Eduardo has uncovered many interesting easement issues for our clients over the past four+ years.  Feel free to contact him directly at: edabarca@racsa.co.cr or (011) 506-2743-8345.

It wasn’t the most entertaining subject to write about, but it’s an important one to consider before buying a piece of Costa Rica real estate.

May 162012
 

Has the Costa Rica real estate market hit the bottom? As realtors in Costa Rica we frequently get asked this question, so we decided to share our thoughts on why there are signs pointing toward a positive answer. Regardless of what we think, more and more people are retiring, relocating, and investing in Costa Rica real estate. Thanks for watching and if you have a minute, please comment in the section below and “Like” this video on YouTube. The “Like” helps us reach more people interested in buying and selling Costa Rica real estate.

www.hotcostaricarealestate.com

Interested in Costa Rica real estate as an investment. They primarily live somewhere else, but they own property in Costa Rica for the asset appreciation potential as well as possible rental income. Some just buy and hold (land-bank). For developed properties, the investor has a vacation home to visit as desired.

Migrators spend a regular amount of time in Costa Rica during each year.

Re-locators are those that are looking to move to Costa Rica from wherever they are. They will live full-time in Costa Rica.