Important Immigration News!

 Posted by on September 19, 2012  News in The Zone  No Responses »
Sep 192012
 

It is a well-known law that limits the amount of time that a non-resident can stay in Costa Rica to no more than 90 days. So, for those that like to visit for longer than that, or for those that migrate and spend say, half the year hear, listen up, er… read up!

I just received a call from my buddy in Immigration.  He told me about a law that was going to be put into effect on the 27th of this month. It goes like this: if you over-stay your time here, you will be fined $100 per month. Now this is getting a bit serious.

Juan went on to explain more by means of an imaginary situation. Let’s say that you are 3 months over your 90 days, and you go to cross the border into Panama in Paso Canoas. You give the gal behind the window at Immigration your passport.  She sees that you are 3 months over. She says, you need to pay the $300 dollars.

Now, you weren’t expecting this, and you may not have the $300 dollars.  So you explain this to her. She says, well then fine, just go on into Panama. You can come back into Costa Rica in 9 months.

That is the gist of what Juan told me. I’ll be getting more details on this and posting them shortly.

 

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.

Relocation FAQ

 Posted by on October 21, 2011  For Buyers, Relocation to Costa Rica  3 Responses »
Oct 212011
 

I just received some questions from a connection that I made in the Social Media site LinkedIn. I am reprinting these here due to the increase in these types of questions lately. I’m sure that these questions, and their answers, will be of help to a number of our readers.

Location In The Zone:

  1. We don’t want to feel like we’re living in the middle of nowhere, but we’re not looking to live in a large city like Seattle! What is The Zone like?
Costa Rica Real Estate

One of many developments above Dominical.

As a starting point, you picked a good one. The Zone, as we like to call it down here in the southern pacific zone of Costa Rica, is definitely a bit removed from things.  The developments are typically more spread out than North American developments, so in most cases your neighbor will not be right on top of you.  Access to The Zone is possible via two regional airports (both approx.40 minutes from Uvita) and the Costanera Highway.  Thanks to the new San Jose-Caldera Highway, the trip to San Jose is now 3 hours.  That said, it is difficult to say if this area would appeal to you with this point, and I would recommend a visit before making that determination.

Costa Rica Real Estate

You can buy or build your dream home.

Buy or Build:

  1. We are also trying to decide between building a home or buying existing… Do you have any suggestions?

This is one of the more common questions that we deal with. Here is an interesting data point: the majority of people that walk into our office want to buy an existing house. Yet, the majority of people that buy from us buy raw land & build.  Why is that?  Here in The Zone, we have been outside the main flow of tourism.  This was due to the bumpy, dirt road between Dominical and Quepos.  It is now paved, and we are more in the flow.  Historically, those visitors and relocators who found their way down here were a bit… well, let’s call it eccentric… might be the way to put it. These are truly individualistic individuals who built their house as an expression of that individuality. These houses are not easy to sell. Now, I should clarify that this building approach is ancient history.  There are very nice homes available in The Zone; however, there just aren’t that many of them.  The inventory continues to evolve, and home sales are up.  That said, I suspect that it’ll be a while before we hit the 50/50 mark of house/lots sales.  Our recommendation is to take your time and look at everything.  After you go through this process, you can compare those houses with what it would cost to buy & build on a similar piece of land, keeping in mind raw land is plentiful.  You might find that $450,000 house can be built for $350,000, and you’ll have it the way you want it.  Conversely, you might find a great house for less than what it would cost to buy and build.  In today’s market place, and with the economic crisis, you never know what you might find.  Building in Costa Rica can be a daunting and frustrating task.  For this reason alone, some people simply refuse to go through the process.  This question really is best served in a face to face consultation.

Costa Rica Real Estate

The ARCR is one of many sites with good info.

Groups and Associations:

  1. I have heard to be very wary of some places being over priced for foreigners who don’t know any better. Any good groups or services to retain?

Hmmmm, well I am inclined to think that you’ve found all you need right here with me. 🙂  A not so self-serving answer would be, “yes.”  There are actually PLENTY of options for information, so many in fact that I wonder at how one can really know what the straight story is.  Residency, taxes, zoning, business and so on, in a foreign land, requires that one be on his toes. I like the Costa Rica Living news group at Yahoo groups. Also, the Association of Residents of Costa Rica (ARCR) have been a helpful residency and insurance resource for some of my clients.  Ultimately, I think that what you are doing is a good idea.  Talk with individuals who have done what you want to do.  When I get new clients in the Dominical and Uvita area, I set up lunches with my previous clients who have moved here, built, learned Spanish etc.  It seems that everyone is more than happy to share their experience, and from these tidbits you’ll get a very good idea of what to do and, often more importantly, not do.

Starting A Company:

  1. Did you find it difficult to start a company there? I will be looking to work, but understand I will need to start my own business to get paid. At least until we were able to become residents.

Starting a business, or buying an income generating property, or both, used to be oh-so-easy in Costa Rica.  Business owners would only complete the necessary steps to get a business license if someone from the Municipality came and bugged them about it.  And, income generated by businesses or rental properties was reported even less.  In today’s Costa Rica it has become a bit more difficult, or maybe I should say involved, to operate without them.  For better or worse, Costa Rica is growing up and finding ways to enforce laws that they have had on the books for years, in some cases, decades.  The simple fact is, to do any kind of work in Costa Rica, you need to be a resident.  Otherwise, you run the risk of being deported.  We know people who can help with residency and setting up a business, among other services.

I hope these thoughts help to answer your questions, although it is my experience that they usually bring up new questions.  Safe to say, The Guys here to help.

Apr 212011
 

Episode 12 features a candid look at community in the Southern Pacific Zone of Costa Rica. If you’re considering relocating, buying a house, raw land, or a commercial business in the greater Dominical or Uvita areas, we encourage you to watch. And, please feel free to share your comments or questions. Gracias.


Talk Show – Episode12 by GuysInTheZone

Sep 282010
 

The Downturn… (cue ominous music)

It would be easy to label the decline of the Costa Rica real estate market (since the peak in 2007) in a negative light. In truth, there is no such thing as “negative light” only the opportunity for change, and if our market has seen anything over the past three years, it is change. The shift from bank loans to seller financing is one of the primary changes that has (pardon the pun) opened the door to prospective home buyers, as well as, land and commercial buyers.

Seller Financing Open The Door in Costa Rica

Before defining the effects, basic models, and legal structure of seller financing, let me back up just a bit to clarify why we now find it present in about half of the Costa Rica real estate deals we facilitate.  Like most lending institutions around the world, Costa Rican banks are better described as “institutional holders”.  Banks are not lending for a few reasons— falling real property values, the recession, and they are not lending to each other (e.g., no credit to leverage).  In Costa Rica, the debt-to-income ratio required to obtain a loan is as ridiculous as the double-digit interest rates being charged (often twice the rates in the United States).  The banks’ parsimonious response has opened the door to seller financing, and Costa Rican property owners have embraced the new paradigm.

Sellers Get Creative

“What do I need to do to sell my property?”  We received this common question too many times to count over the past few years.  Our answer typically included these answers— Continue reading »

Apr 212010
 
Training for Costa Rica real estate certification.

The Guys just got themselves certified! Rod & I are now card carrying Costa Rica real estate agents. Imagine that.

I know – you’re saying: “I didn’t know that there was such a thing”. Well, in fact there isn’t, yet, but there is about to be, and so we have joined a number of our peers in anticipating the coming change to the U. S. (and elsewhere) model of licensing for real estate agents.

Training for Costa Rica real estate certification.

Rod being attentive at the Camara de Bienes Raices course in San Jose Costa Rica.

The organization is called CBR or “Camara de Bienes Raices” (Chamber of Real Estate).  Perhaps you’ve seen the CBR logo around on various websites. You’ll be seeing it on ours as well now.  It is a 4 day course of 8 hours a day.  We did it, enjoyed it (for the most part – butts are a little sore.), met & networked with lots of people and now feel just that much more entrenched with our chosen industry in Costa Rica.

CBR has proposed a law that they feel will become adopted this year of required licensing of Costa Rica real estate agents.  Our position is that this will be Continue reading »

Oct 142009
 

There is a new law that has now quietly come into force in Costa Rica.  It is being called the “Luxury House Tax” or a facsimile thereof.

I now have it on good authority that there is mass confusion about this law by the few that have even heard of it. I am one amongst the throng of the confused, but I will here report what I know and will continue to post as I get new information.

There appear to be many that have not heard of the law, but whether a person doesn’t know about the law or simply chooses to do nothing about the law, word is that there will be some rather harsh consequences.  How ‘bout them apples?

This is a new tax and it is only for constructed properties – houses, not for raw land.   Houses built on both titled and maritime zone property are affected.

House owners must declare the value of their house, and then pay the tax between January 1 and January 15th.  The law went into affect October 1, 2009 so the amount in this first time slot will be from October 1, 2009 to January 1, 2010.

If the value of your house is below $170,000 (give or take – this amount will vary depending on the exchange rate), you are exempt.

I have included a table of the current tax-to-value table. At the writing the colon is hovering right around 580 per dollar but you can take the figures below and use the conversion thing by clicking here.

Colon Value From Colon Value To Tax
From 1 to 100,000,000 0.0%
From 100,000,000 to 250,000,000 0.25%
From 250,000,000 to 500,000,000 0.30%
From 500,000,000 to 750,000,000 0.35%
From 750,000,000 to 1,000,000,000 0.40%
From 1,000,000,000 to 1,250,000,000 0.45%
From 1,250,000,000 to 1,500,000,000 0.50%
From 1,500,000,000 to 1,750,000,000 0.55%

There is an example pdf form on the Costa Rica government’s web site. If you’d like to see it for who knows what reason: click here (link no longer active). It’ll open in a new window and load a pdf document that is an example of what the final version will look like shortly.

Dec 052008
 

Yesterday started off as a typical, glorious Costa Rica morning. Rod and I got an early start with San Buenas Golf Resort Project Manager Larry Breau, walking the golf course project. This involved a drive from our Uvita Costa Rica office towards the south about 20 minutes. There was a slight delay in travelling south due to to ICE (pronounced ee-say), which is the monopolistic agency here in Costa Rica in charge of telecommunications. They are running a new grid of lines to accommodate the rapid growth in the zone. No problem, just a 5 minute wait.

We had a full morning of rubber boots, machetes, broad rimmed hats and a liter of water reviewing the project.

In driving back to the office we encountered a line of cars backed up. Thinking it was ICE we sat patiently waiting. A number of people had turned off their cars and were milling about in the road, talking, some with exaggerated arm gestures. One gal walked by and upon seeing the lighter shade of our skin (assuming that meant English is spoken) she approached us and asked what the hold up was. We very authoritatively informed her what was going on with ICE. Turns out we were dead wrong. This was a road block caused by angry protesters out in front of Crystal Ballena, a local hotel and restaurant where a high level meeting was in its second day.

Costa Rica government officials met with developers and the local Osa government departments to discuss some of the project closures that were the result of an inspection sweep Continue reading »

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.