building in costa rica
Building a Home
If you've looked around and had trouble finding the perfect abode, you may consider building your own. While there are many advantages in designing and building to your own specifications, the experience usually requires a great deal of work and patience.
Most Costa Rican architects and contractors are not accustomed to planning and building up to American and European standards. However, good companies with extensive experience do exist. It is of the utmost importance that you spend the time to research the various companies. Look for an experienced construction firm that can provide assistance with permits and other logistical matters. Meet with them, ask questions, and make sure that you are able to communicate effectively with them.
By law, only architects and engineers who are members of The Costa Rican Association of Engineers and Architects can file applications for construction permits. Only after reviewing your construction plans and determining that they meet all electrical, seismic and structural regulations, will they file the application. Rates charged by architects vary considerably, but here are the minimum rates of members of the Costa Rican Association of Engineers and Architects:
0.5 % of the project cost for a preliminary survey of the plans and permits, which is only necessary depending on the job.
4.0 % of the project cost for a full site planning, drafts, review of construction plans and technical specifications.
1% to 1.5% of the project cost for a pre-project design.
1.0% of the project cost for itemized budgeting.
0.5% of the project cost for global budgeting.
Construction and Project Supervision (3 levels)
Management: Architect fully oversees the entire project. Cost: 12% of construction costs
Supervision: Architect visits the job site daily to supervise the project. Cost: 5% of construction costs
Inspection: Architect visits the job site once a week to make sure that the plans is being followed by the contractor. Cost: 3% of construction costs
When you have agreed on the general design of the property, your architect will draw up the plans, as well as a materials list and construction budget. Your total planning package should include the following items:
a site plan
elevation, longitudinal, and transversal perspective drawings
distribution plan
roof and drainage design
plan of footings and supports
structural plans
electrical plans
mechanical plans
sanitary system
interior design and construction
Construction permits are required for any house with an area greater than 750 ft². Submit the application to the Oficina Receptora de Permisos de Construccion (Permit Reception Office). You will need to provide them with the following materials:
Four copies of the construction plans
Two copies of the property deed
Four copies of the property cadastre plan
One copy of your electrical design plan approved by SNE
One copy of the architect or engineer's consulting contract
Approval from the water department regarding availability of a water source This application will then be reviewed by the following agencies before a decision is made:
Roads and Transportation Department (MOPT)
Electricity Department (ICE)
Water Department (AYA)
Housing and Urban Development Department (INVU)
National Electrical Services (SNE)
Health Department
Costa Rican Architect and Engineer Association (CFIA)
Local Municipalities
Estimating the total cost of building a home is difficult without the construction plans. However, depending on materials and the quality of work, you can expect the cost to range from US$30-50/ft². This is still considerably cheaper than building in the U.S.
Building a home can be a challenging venture, especially in another country. Here are a few things to consider when taking the leap. When construction does begin, try to spend as much time as you can on site to confirm that everything is going as planned. As a homebuilder, you might also consider paying the contractor as the job progresses, in addition to materials up front. A happy crew may be more likely to maintain a high standard of quality. Contractors generally receive discounts on materials, and they may want to use comparable materials that provide them with the largest profit margin. Make sure that they use materials that were agreed upon in the contract.
Costa Rican law imposes strict guidelines on zoning and construction. Along both the Pacific and Caribbean coasts, 200 meters inland from the high tide is owned by the government. Within the first 50 meters of this area, building anything is strictly prohibited. However, with permission from the local municipalities and the Costa Rican Tourist Board, the area from 50 to 200 meters above high tide can be leased. This is legally prohibited for foreigners, yet there are ways around the stipulation. Vertical requirements also exist. The ICT discourages building anything over three stories within beach areas. Along rivers, building a house is prohibited within 50 to 100 meters from the shore.
BUYING & OWNING - Rules of the Road
Buying and owning property in Costa Rica, or any foreign country can be a confusing and intimidating process. How can I make a safe and efficient transaction? Can I just leave everything up to the lawyer? What are my rights as a foreigner? Can squatters invade my land? These and many other questions will be answered in the information provided in this guide. Costa Rica does have a system, although not perfect? it works fairly well. Thousands of foreigners have safely invested here. You can be one of them. Unfortunately, many foreigners become so enchanted with the country and it?s people that they fail to exercise good judgment and common sense, or another familiar scenario... making decisions on what "they thought they understood to be the rules". In Costa Rica, you will find similarities to stateside rules but many aspects of the system are different. Take the time to learn the basics! Also, as a buyer, being somewhat knowledgeable during the process will cut down on wasted time looking at properties that don?t fit your needs or properties that are unsuitable for one reason or another. The information provided here will go a long ways in getting you started.
Property or Finca - The three basic categories?
PRIVATE LAND / TITLED : In Costa Rica, foreigners can own titled property in their own name and share the same rights as a Costa Rican citizen. There are two documents which, similar to the states, describe "titled" or fee simple property ( land outside the beach zone ): First, the title itself or escritura. Titles are registered in the national registry or Registro Nacional, and show ownership along with any leans, mortgages, or judgements. The second part is the registered survey map or plano catastrado. The plano serves the purpose of recording measurements, size and location along with other useful information like whether the land falls inside restricted areas such as IDA Land (co-op owned lands with the government) or inside protected areas like national parks and reserves. NOTE: The escritura and the plano may be different from each other and yet refer to the same property. The plano is NOT the ownership document and may even reflect a previous owner?s name. Ownership of the land (title or escritura) is recorded in a separate department of the national registry. Both parts must be checked to verify that ownership and mapping coincide with the same piece of land. These two departments are currently making internal changes to make the process a little less clumsy. Once a property is titled for the very first time (original inscription), there is a three-year "incubation period" where third parties can make a claim. However, any new claims must carry a fair amount of proof before a title can be challenged. After three years, a claim can still be filed but calls for extraordinary circumstances. There is a ten-year statue of limitations for such claims.
DECLARATION OF VALUE: ( Titled Land ) It is common in many land transactions to not claim the actual selling price but declare a lower value so as not to pay higher taxes and registration fees. This is the buyer?s decision but may not be advisable in all cases. If there were ever a future claim against the seller or the government, or you wanted to mortgage the property, any reference would be made to the recorded value and not the actual price that was paid. You may also consider that in the future if you resell the property, it may be more difficult to explain a substantial difference between what you are asking and what you paid for the property. Consult your lawyer before making this decision.
PRIVATE LAND / UNTITLED : ... also called "possession" land. Most of the land in Costa Rica falls in this category. Even though many lands are untitled, it does not mean that they do not qualify for title. Some do and some don?t. In a possession scenario, it is the recording of the legal transaction that establishes possession or ownership rights...not a title. The reason for this is that for many years, farmers and settlers (for any number of reasons) never applied for their title but possessed them in a "legal manner", established boundaries and transferred rights through private documentation. When properly recorded, these rights are completely legal, fully transferable and can qualify for inscription in the national registry as fee simple title. Legitimate possession rights can be demonstrated by researching the history of ownership recorded through private documentation. This is done through a properly recorded bill of sale in a lawyers protocol book. The bill of sale or carta de venta shows transfer of ownership and describes the property in words relating to the surrounding properties and well defined landmarks. Pages from the lawyer?s protocol book are then registered in the national registry.
The other side of the possession issue, are lands occupied and claimed by illegitimate settlers or "squatters"; someone claiming rights of ownership but have no "ownership documentation", only that they occupied the land for a certain amount of time. In these cases, there may be some form of rightsestablished but it is more difficult to define. Costa Rica does have a homestead law or precario law that sets the guidelines, however it is outdated and needs to be modified. Sometimes there is a clear distinction between "legitimate possession" and "illegitimate possession" and sometimes there is not! BEWARE!
In 1941, a titling procedure called Ley de Informacion Posesoria was created by the government as a means for landholdes to record or "register" their land that has been "held in possession". Many lands have been registered using this procedure. Minimum requirements to qualify for a registered title to possession land are a registered survey and verifiable history of legitimate possession "passively and publicly" for a minimum of 10 years with no disputes. The remaining parts to complete the title process are notarized statements from adjacent property owners along with a judge?s inspection and review of all documents. This process, done with the help of a lawyer, can take up to a year (possibly more) and cost between $1,500 and $3,000 depending on the size of the land. NOTE: Possession lands cannot be liened or mortgaged as they have not yet been recorded in the national registry.
In some cases, a buyer will pay for the title process after the sale or even make it a condition of the sale or escrow. Keep in mind that not all cases are alike. It takes a good understanding of the history of ownership for each property. In general terms, it is a good rule to not buy untitled property if you are not clear about how it works. However, considering that most of the land in the country is untitled, it is logical that most of the land transactions have to do with untitled land. Many people have safely bought possession lands including foreigners. Many foreigners here in the Osa have purchased possession land.
BEACH LANDS: or Maritime Zone lands are dealt with in a different way. The Maritime Zone Law or Ley Zona Maritima Terestre 6043, commonly called the "Concession Law", was established in1977 and defines the Maritime Zone (ZMT) as the 200 meter strip of land along the shoreline, calculated from the "average high tide". It is owned by the state and jointly administered by the corresponding municipality and the federal institution ICT (Costa Rican Tourism Institute). The ZMT is described in two parts...the first 50 meters is public domain or "public zone" and cannot be developed or claimed by private persons. The next 150 meters or "restricted zone" can be claimed by private persons who solicit the municipality for the concession rights.
First, it is important to understand that the Maritime Law and awarding concessions was designed under the assumption that the land has undergone an approval process establishing what we know as "zoning" or planificacion. If not, rights of ownership and development of coastline property is strictly on a provisional basis. In these cases, the municipal goverment administrates what is considered a "right of occupation" through a permiso de uso, a provisional lease or right of usage also called an ariendo, which is recorded with the municipality once an application or solicitude de concesion is received and acknowledged. Contrary to popular belief, these provisional leases have no time limit as they are intended only as an "interim right" until proper zoning is in place and concessions can be awarded. The "interim occupant" may pay a voluntary, symbolic "occupation tax" or canon for the corresponding permiso de uso and has the right to make certain improvements to the land and build a "temporary structure"...nothing more. Even though you will find permenant structures of all types and sizes all along the coastline country wide, this does not necessarily mean that the mandatory zoning and concession process took place. Over the years, municipal governments have been very complacent about development along the coastline. However, the law is clear, development on any particular parcel of land is allowed only once zoning has been approved and a concession has been awarded.
Zoning and Concessions: Over time, sections of shoreline around the country have been declared as having "touristic aptitude", thus qualifying that section of land for traditional development and zoning under the Maritime Las. Zoning is implemented through a proposal or regulatory plan called a plan regulador. Once a regulatory plan is elaborated and approved through the corresponding institutions: ICT, INVU and the corresponding municipality, the "recognized occupants" inside the newly zoned area can now process and "activate" their solicitude de concesion assuming the intended use coincides with the declared zoning or usage called uso del suelo. Concessions are awarded in the form of a contract and are inscribed in the national registry giving the concession holder exclusive rights of ownership, development and right of transfer. Concessions for residential and tourist projects are automatically renewable every 20 years for eternity assuming the terms of the concession contract are met by the concession holder, which basically are... respect the public zone, pay your taxes and develop in accordance to the zoning regulations laid out in the regulatory plan. Stories of 99 year leases etc. are simply not true.
Even though there has been a substantial amount of development in the ZMT over the years, surprisingly, 90% of the coastline in Costa Rica is still without approved zoning...and 90% of the occupants inside the ZMT have a provisional permiso de uso, NOT a concession....and therefore, 90% of the development inside the ZMT is technically illegal. This fact may sound alarming but in the past, the government never placed a high priority on this issue and people built and developed under lax rules by the local municipality. Today, the situation is much different in terms of allowing any further development along the coastline even though there is still little or no government funding available to pay for the required regulatory plans. However, the government does allow third parties to present zoning proposals for approval assisted by private certified planners. Costs to hire a team of planners are actually quite reasonable; $20,000 - $30,000 for a complete proposal covering approximately one kilometer of coastline. The zoning and concession process typically takes 3-4 years to complete.
The "purchase" of beach property is essentially a private agreement between two parties. Technically, the law prohibits "buying and selling" of state domain. Costa Rican citizens or foreigners having at least 5 years of residency can register beach property in their own name. All other foreign citizens must register the rights to their beach parcel through a Costa Rican corporation formed by an attorney, a simple process that takes about 30 days and costs around $600. The corporate board of directors may be formed by foreign residents but must have at least fifty percent of it's shares held by a Costa Rican citizen. You will see the initials S.A after many corporation names. This stands for Sociadad Anonima or "anonymous society" which is the most common type of corporation used because shareholders have anonimity. The shares are "bearer shares" and are registered in a private registry (the corporate books).
Alternative to the Maritime Law: In 1992, The Ministry of Environment and Energy or MINAE created a new law called The Law for Conservation of Wildlife No. 7317. This decree by the central government offers a program for landowners allowing them to declare their land as a "protected zone" while maintaining ownership rights and allowing certain development and or other activities. This program also encompasses the beach lands or Maritime Zone. In this case, administration of the permiso de uso essentially changes from the local municipality to MINAE. Usage rights are similar to those described in the Maritime Law except in some ways are less restrictive. In particular, traditional zoning or a Plan Regulador is not required and the uso del suelo (declared usage is established through a simpler instrument called a Plan de Manejo or management plan. The plan de manejo describes the project and land usage, be it a residence, tourist project, agriculture or other uses of public and social interest. The specified area or protected zone is then declared a wildlife refuge or Refugio de Vida Sylvestre. Basic guidelines for environmental impact and sustainable development are spelled out in the refuge law, however, large projects are required to present a more detailed study. The purpose of these refugios is to place more lands in state protection while still allowing low impact development. For refugios in the Maritime Zone, concessions are not awarded. Instead, usage contracts are registered with 10 year permisos de uso. Contracts are renewable each term by soliciting the ministry every 9th year. A fixed occupation tax or canon is paid yearly to MINAE but refugios incorporating private, titled land are exempt from the vienes imuebles (land tax). This has become a popular zoning alternative for maritime lands around the country in cases where low impact usage and environmental condtions can be justified. There are no restrictions on foreign ownership under the refuge program. This option may or may not apply or make sense in all cases so it is important to make a proper analysis.
ABOUT SQUATTER?S RIGHTS: "What do I do if I am an absentee owner. How do I protect my land from being occupied by third parties?" The answer is simple? have someone responsible check on it once a month while you are gone. You can also have someone live on the property as your caretaker. If you hire a caretaker, draw up a written agreement and have it notarized by an attorney. Handshake agreements can be full of good intentions but may be a problem later. Don?t make this avoidable mistake. Get it in writing.
Articles in the civil code outlines Costa Rica?s homestead law or Precario law. Basically, the law allows peaceful occupation of "untitled and unattended land" unless there is opposition by the existing owner. If your land is unattended and someone moves onto the land, they begin to establish certain rights after three months. Action for removal is required before the end of the third month but the process is less complicate than if they occupy the land for a longer period. If squatters have occupied the land for more than three months but less than a year, the process of eviction called desalojar or desalojo, becomes more involved. Although eviction is more complicated, you are not yet required to reimburse the occupants for their "improvements" to the property. If the land is occupied for more than a year but less than ten years, you may still be able to recover the property, but the legal process may take years and you will be required to make a settlement for the "improvements" made by the occupants. "Improvements" can range from the construction of shacks, planting of crops and even cutting of trees to clear the property. Improvements and compensation are established by the court. In most cases, it is best to negotiate an out of court settlement. If someone is living on a property you are interested in buying, be it the owner, a relative, a worker etc., you must be sure this is addressed and settled as a condition of the transaction. Precario rights can affect both titled and untitled land but the process of eviction for titled property is in theory, faster and less complicated.
The department of IDA, The Agrarian Development Institute, was established in 1961. This government agency was formed when Costa Rica was trying to develop and expand it?s farming production. The institute was designed to represent landowners in cases where legitimate possession rights were being challenged or where land was not being utilized for some form of productive agriculture. One job of the institute is to defend the rights of the possessor as outlined in the precario law?sort of a public defense body for peasant landowners unable to defend themselves against larger landowners trying to "expand" their territory. However, there are many cases today where the system is abused and people fall victim to "de-facto tenants". That is why it is important to know the history of possession and above all?. follow the rules. If ownership is legitimate?it must be demonstrated within the guidelines outlined in the law. It is important to remember that the precario law and the recognition of possession rights is considered the first step in the titling process and is the basis of how many lands were originally settled and eventually titled in Costa Rica ? in a legal manner.
OPTION AGREEMENTS: In some cases, a buyer may want to make a down payment or buy an "option" on a piece of land. The final deal may depend on some outstanding details to be worked out or obligations to be met, but both the buyer and the seller would like to formalize a provisional agreement. Examples might be that the land needs to be re-measured to verify boundaries or that the seller offers to make improvements before closing. Option money can be given directly to the seller or be held in "escrow" depending on the circumstances of the deal. Option contracts must be notarized by an attorney but are normally not recorded in the National Registry. Therefore, it is recommended the buyer put down a minimum amount in case the deal goes astray. If the deal falls through, it may be difficult to recuperate monies spent. Going to court is a lengthy process and not worth the effort unless large sums are involved. Terms of the sale should be written in the option contract including settlement if the deal does not transpire. Usually, the buyer forfeits the option money if he backs out of the deal without good cause.
REAL ESTATE AGENTS: In Costa Rica, there is little governmental regulation of the real estate industry. However, a knowledgeable real estate expert will be invaluable in helping you with many aspects of your purchase. Get a local recommendation for an agent with a good track record. Ask several of the foreigners living the area who has the best reputation in town... and then ask the agent for some references. In general, a good agent performs a more critical role than stateside agents as the system in Costa Rica is far less sophisticated. There are no formal escrow companies, mortgage companies or banks that assist in the process. In some ways, this puts more responsibility on the agent. For example: All listings must be thoroughly researched before a property can even be considered, especially in rural areas. In some cases, a field agent will not only show you property, but also work directly with the lawyer, the surveyor, the property owner, the registry, and follow up on a host of details until the transaction is completed. The agent represents both the buyer and seller so that when it?s time to draw up the sale document, all issues are discussed and agreed upon before closing a transaction. In any field of endeavor, competency is paramount. Never more so than in successful real estate transactions in Costa Rica. Agent commissions are normally paid by the seller but in some cases, the buyer and seller may split the commission if agreed to in advance.
NOTE: Beware of people off the street...bartenders, taxi drivers etc. (Costa Ricans AND foreigners) that offer to sell you property. They have no sense of real estate as a business and the attraction of a commission from the seller may outweigh their concern for the protection of the buyer...YOU! There are many properties in Costa Rica where ownership rights are unclear, borders are undefined or properties with problems due to hidden conflicts of one sort or another. Getting a lawyer is not enough! A knowledgeable field agent that knows the area and the history of the property will not only show you qualified properties, but will help work out many issues before it?s time to finalize the details with a lawyer. A good agent will also help educate you so you can make an informed decision!
LAWYERS AND CLOSING / THE PROCESS OF SETTLEMENT: Once you have found the property you want to buy, you will need an attorney / notary to execute the transaction. As with real estate agents, it is typical for an attorney to represent both the buyer and seller. It is the buyer?s right to select the attorney?an important step. Equally important as selecting your agent! Ask around and get a good recommendation by others that have had a good experience. Again, you may want to ask for client references. Documents are in Spanish so if you don?t speak and read good Spanish, make sure your attorney can translate them for you. Only a state certified Notary can authenticate a real estate transaction. In Costa Rica, a Notary must also be a lawyer. However, some practicing lawyers are not Notaries but work with a partner that is the official Notary. This is not a problem. Just make sure it is clear that all documents will be certified by your attorney or his / her partner.
It is the lawyer?s role to draw up the contract or carta de venta. However, before the sale document is executed, the lawyer must verify the position of the existing registration including liens, mortgages, etc, and make sure all back taxes and government fees are paid up to date.
IMPORTANT: Keep in mind that a lawyer may not cover ALL the issues in some land transactions, be them titled, untitled or beachfront properties. Some, which may need to be considered in the sales contract. In most cases, the lawyer never even sees the physical property and can?t advise you on issues such as describing physical access (it may differ from access shown on the survey map), or that the survey map coincides with the physical borders like fence lines, and in some cases ( as with possession property ), organize notarized statements with bordering neighbors stating there are no boundary disputes or usage agreements with third parties. Also, describing and guaranteeing water rights, and how to handle existing tenants or crops. Another example is in transferring beach leases. The lawyer?s job is basically finished when the documents are presented at the local municipality. Who will follow up to make sure the transfer is approved? A good agent will. Your agent plays a vital role in the entire process. Get a good one and remember...getting a lawyer is not always enough!
CLOSING COSTS: Unless agreed otherwise, it is customary for the buyer and seller to share equally in the closing costs. Typical costs are shown below.
ATTORNEY / NOTARY FEES: The state sets a national fee which most lawyers abide by. However, fees may vary between a San Jose Lawyer and a small town lawyer and may also reflect other work performed by the lawyer that are outside a typical transaction. Established fees are set at 1.5% of the sale price for the first million colones, 1.25% between one and ten million colones, and 1% above 10 million colones. One million colones is approximately $2,200 US.
The following fees apply only to titled property and it?s subsequent recording at the national registry. It does not apply to untitled or beachfront property:
TRANSFER TAX: 1.5% of the declared value
PUBLIC REGISTRY FEE: 0.50% of the declared value is paid to the registry for recording the documents
DOCUMENTARY STAMPS: 0.55% (approximately) of the declared value for stamps affixed to the documents.
TITLE INSURANCE: Steward Title has recently set up shop in Costa Rica but it is unclear their true role in selling title "insurance". All types of insurance (except title insurance) in Costa Rica are offered exclusively by the national government agency called INS, Instituto Nacional de Seguros. INS is a legitimate government monopoly and technically, it is against the constitution for outside vendors to offer insurance of any kind. Aside from that, the national registry is open to the public and any attorney can perform a title search. The Costa Rican constitution guarantees your property rights however, "title insurance" may justify some peace of mind. Stewart Title charges 1.5% of the sale price or a minimum of $700. The policy covers properties with fee simple title, not possession land or maritime zone ( beachfront )
FINANCING: Although the constitution allows equal access of credit to both foreigners and nationals, it is more difficult for foreigners to qualify. Out of country collateral and income is not normally considered by the banks. In some cases you will need a co-signer or fiador. Even then, interest rates are very high so it is probably more practical to bring funds from abroad. In addition, many properties don?t qualify for a mortgage. Beachfront property with a permiso de uso doesn?t qualify for a mortgage (not even for Costa Rican citizens) because the land is technically owned by the state ... not the occupant. Untitled property is also non-attachable, therefore, unable to mortgage. On occasion, some terms may be negotiated with the seller but are usually short in length. For these reasons, most all real estate transactions are paid in cash upon closing.
LAND TAXES:Collection of land taxes was turned over to the local municipalities several years ago. In the case of private land (both titled and untitled), property tax or vienes imuebles previously paid 6% of the declared value based on the Tax Law No. 7509. In May of 1995, this code was changed and the tax was lowered. According to the new law No. 7729, taxes are based on 0.25% of the declared value. In most cases, lower values are claimed than what the actual selling price was. Maritime property or permisos de uso pay an "occupation tax" called a canon. Again, very cheap. A one-acre beach lot with no structures pays less than $10 per year. Improvements like a house etc. are taxed in addition to the canon and pay a vienes imuebles tax based on the value of the construction. A medium size house on a small beach lot normally pays less than $100 per year. Once a beach property has been awarded a concession (only after an approved zoning plan is in place) the tax goes up dramatically and depends mostly on how the property was declared i.e. residential, commercial etc.
BUILDING: The process of getting permission to build (outside the beach zone) can be complicated depending much on where your property is. Beachfront development has a different set of rules as compared to private land (see section on the Maritime Zone). Although it is national code that regulates building, practical application will vary in populated areas like San Jose versus rural areas such as the Osa Peninsula. Code is not nearly as strict as in the states. In rural areas, it is quite simple. You must present proof of ownership and a set of building plans signed by a Costa Rican architect. There is a preliminary study and an anteproyecto performed by the architect. Set fees for architects are between 4%-6% of the value of the construction. For larger projects, you may be required to do an environmental impact study and possibly another study for supporting infrastructure...at your own expense. For residential construction, it is a single permit issued at the local municipality with a one-time inspection before construction begins. In rural areas, follow up inspections are rare. It is the architect?s responsibility to make sure you follow the approved plans. You must have a proper septic system and water supply. The permit process should take a couple of weeks not counting the time it takes to draw up your building plans. In rough numbers, you can build a moderate size, furnished, two-bedroom house for around $40,000. Granted, they are of a simpler design but decent quality. Some materials like cement and wood are equal to stateside prices but labor is very inexpensive. General labor costs are around $10 per day and a decent carpenter or block layer will cost around $20 per day.
DISCLAIMER: The author?s intention is to explain many of the important issues before you consider making a purchase, be it titled land, possession land, or beach land. This information should not be considered a recommendation to purchase land in a particular category. Though this information is well researched, it is not the intention of the author to suggest that this is the only source of information. In all cases, ownership rights are established by Costa Rican law and there are no warrants implied that your investment is 100% risk free. This writing may or may not reflect subsequent changes in the laws. In all cases, good legal counsel is recommended.
8.6 APPROVAL OF PLANS FOR CONSTRUCTION WORKS WITHIN THE COSTA RICAN SHORELINE AREA (ZMT IN SPANISH).
These procedures are ruled by the Regulations Governing the Approval of Plans for Construction Works Within the Costa Rican Shoreline Area (ZMT in spanish), Executive Decree N° 29307-MP-J-MIVAH-S-MEIC-TUR19.
It should be recalled that prior to pursuing this stage, the applicant should have complied with the general requirements for construction plans outlined in Section 8.1.1, including obtaining the approval of the Professional Association of Engineers and Architects (Section 8.3). The pertinent legal basis can be found in Section 8.8.
8.6.1 General requirements.
In accordance with Article 3 of these Regulations, prior to building within the Costa Rican Shoreline Area (ZMT) and initiating the approval procedures, the applicant should have first complied with applicable requirements and regulations (concessionaire within a Shoreline area (ZMT), or in Papagayo, or land owner within the Shoreline Area (ZMT) holding a title deed), as explained in Section 4 of this Manual. In accordance with Article 3 of these Regulations, in order to be able to pursue construction works within the Costa Rican Shoreline Area (ZMT) and initiate the approval procedure, the applicant must have complied with applicable requirements and regulations (concessionaire within a shoreline area, or in Papagayo, or land owner within the shoreline area holding a title deed), as explained in Section 4 of this Manual.
To be able to pursue construction works within the Costa Rican Shoreline Area (ZMT), the applicant must either hold a concession contract dully approved and registered at the Land Registry Office, or be the owner of the land in accordance with Law Nº 4558 or previous regulations.
The concessionaire is allowed to build behind the boundary that demarcates the limits of the public zone and the Costa Rican Shoreline Area (ZMT), as per the regulating plan. The owner may build on his or her property, as stated by the ownership title and in accordance with the regulating plan, if applicable.
8.6.2 Urban and residential developments for tourist use within the Costa Rican Shoreline Area (ZMT).
This procedure is pursued using basic plans20, in accordance with the Regulations Governing the Approval of Plans for Construction Works Within the Costa Rican Shoreline Area (ZMT), Executive Decree N° 29307-MP-J-MIVAH-S-MEIC-TUR, Article 9. Final construction plans are not necessary for this procedure, as the final plans should remain at the worksite.
The applicant should submit the application to INVU?s Urban Development Office, located behind the former Santa Teresita Customs House in San José.
Requirements.
Six (6) sets of basic plans, duly approved and stamped by CFIA (one for INVU?s Urban Development Department; one for the Ministry of Public Health; one for the Water Works Institute (ICAA); one for the owner; and another for submission to the municipality). The plans should be accompanied by the documents listed in Section 8.5.2.
The voucher issued by the Urban Development Department (please refer to the table showing applicable fees in Section 8.5.3).
A copy of SETENA?s resolution concerning the environmental impact evaluation, applicable to projects subject to this procedure as per Section 7.
Description of the procedures.
The applicant submits the documents to the Urban Development Office, which acts as the recipient of the plans, forwarding them immediately to the above-mentioned institutions for their corresponding approval.
These institutions must resolve the approval within one calendar month maximum.
The institutions may, within this time frame, make relevant observations on a one-time only basis, in writing. The applicant must resubmit the documents showing the corrections or observations made. The corresponding institution must resolve this new submission within 14 calendar days as of the date of resubmission of the corrected documents.
Legal term.
The deadline is one calendar month21 in accordance with Article 9, Executive Decree N° 29307. Observations may be made on a one-time only basis, and 14 calendar days are allowed to resolve on the corrections submitted, if any.
Upon approval of the basic plan proceed to Municipality: Construction Permit (Section 8.7).
8.6.3 Buildings for tourist use within the Costa Rican Shoreline Area (ZMT).
The approval procedure related to construction plans intended for tourist use, is pursued with the basic plans22, in accordance with the Regulations Governing the Approval of Plans for Construction Works Within the Costa Rican Shoreline Area (ZMT), Executive Decree N° 29307-MP-J-MIVAH-S-MEIC-TUR, Article 8. Final construction plans are not needed for this procedure, as these plans should remain at the worksite.
The applicant should submit the application to INVU?s Urban Development Office, located behind the former Santa Teresita Customs House in San José.
Requirements.
Five (5) sets of basic plans, duly approved and stamped by CFIA (one for INVU?s Urban Development Department; one for the Ministry of Public Health; one for the Costa Rican Tourism Institute (ICT); one for the owner; and another for submission to the municipality).
The voucher issued by the Urban Development Department (please refer to the table showing applicable fees in Section 8.5.3).
A copy of SETENA?s resolution concerning the environmental impact evaluation, applicable to projects subject to this procedure as per Section 7.
Description of the procedures.
The applicant submits the documents to the Urban Development Office, which acts as recipient of the plans, forwarding them immediately to the above-mentioned institutions for their corresponding approval.
These institutions must resolve approval within one calendar month maximum.
The institutions may, within this one-month time frame, make relevant observations in writing, and on a one-time only basis. The applicant must resubmit the documents showing the corrections or observations made. The corresponding institution must resolve this new submission within 14 calendar days as of the date of resubmission of the corrected documents.
Legal term.
The deadline is one calendar month in accordance with Article 9, Executive Decree N° 29307. Observations may be made on a one-time only basis, having 14 calendar days to resolve on the corrections submitted, if any (for additional information on deadlines, please refer to footnote Nº 15).
Upon approval of the basic plan proceed to Municipality: Construction Permit (Section 8.7).
8.6.4 Constructions for Non-tourist use: individual or single families housing.
The approval procedures for the construction of houses for single families or individuals within the Costa Rican Shoreline Area (ZMT), requires final construction plans, in accordance with the Regulations Governing the Approval of Plans for Construction Works within the Costa Rican Shoreline Area (ZMT), Executive Decree N° 29307-MP-J-MIVAH-S-MEIC-TUR, Article 10.
The applicant must report to the Ministry of Public Health?s regional office serving the location where the construction works will be undertaken.
Requirements and Description of the procedures.
Two sets of the final construction plans, duly approved by the CFIA; one for submission to the municipality, and the other for the owner.
The Ministry of Public Health will only verify whether the construction plans meet all health and sanitary dispositions.
The Ministry of Public Health must resolve within a maximum of five working days.
For additional information regarding the requirements of the Ministry of Public Health (approval), please refer to Section 8.4.3, clause c, Annexes.
Legal term.
Five working days. In accordance with Article 10, of Executive Decree N° 29307.
Upon completion of this procedure, proceed to Municipality. Construction Permit (Section 8.7).
8.6.5 Constructions for non-tourist use within the Costa Rican Shoreline Area (ZMT).
Basic plans are used to pursue plan approvals for all non-tourist construction works, including housing and urban development projects (refer to footnotes Nº 20 and 22, Sections 8.6.3 and 8.6.4), in accordance with the Regulations Governing the Approval of Plans for Construction Works Within the Costa Rican Shoreline Area (ZMT), Executive Decree-29307, Article 11.
All requirements and procedures must adhere to the stipulations set forth in Sections 8.6.2 y 8.6.3; however, as they do not require ICT?s approval (given the non-tourist nature), one less set of basic plans is required to pursue this procedure than the number indicated in said sections.
[19] The following exceptions are excluded from the application of the Regulations Governing the Approval of Plans for Construction Works Within the Costa Rican Shoreline Area (ZMT) (Executive Decree-29307), Article 2: a) Cities located on the coast and declared as such by the National Housing and Urban Institute (INVU); b) Properties registered in accordance with Law N° 4558 and above mentioned regulations, whose title of ownership is duly registered at the Land Registry office; c) The shoreline areas located within national parks and equivalent reserves, as these are governed by their own legislation; d) The lands transferred to JAPDEVA as per Article 41, clause b) of Law 5337 creating the Port Administration Board of the Atlantic Coast, dated August 27, 1973, excluding the Shoreline Areas corresponding to both sides of the major waterways joining the ports of Moín and Barra del Colorado; e) The Mata de Limón zone which, according to Law N° 5582 and pertinent amendments, is regulated by the Puerto Caldera financing contract, thereby it is not considered a shoreline area; f) Tourist-related marinas, whose construction and installation procedures are determined by the Tourist Marinas Law N° 7744 and pertinent amendments; g) Agricultural projects; h) Construction of industrial plants, sports or craft fishing, harbor works, aquaculture and other programs regulated by Article 18 of the Costa Rican Shoreline Area (ZMT) Law N° 6043 and pertinent amendments; i) Infrastructure and construction works for public use or public tourist installations, referred to under Article 22 of the Costa Rican Shoreline Area (ZMT) Law N° 6043 and pertinent amendments.
[20] A basic plan includes general floor plans, architectural distribution plans, facade, sections, elevation and roof plans. Furthermore, it should also include the criteria applied to the water supply and waste systems (sewage, drinking and rain water treatment systems), solid waste treatment and electrical system. In the case of residential development projects, a basic plan includes the distribution of the plots of land, geometrical distribution of streets, indication of communal areas and contour lines. In addition, it should also include the criteria applied to the water supply and waste systems (sewage, drinking and rain water treatment systems), solid waste treatment and electrical system. Please refer to Article 5 of Executive Decree N° 27967-MP-J-MIVAH-S-MEIC-TUR, Regulations Governing the Approval of Plans for Construction Works Within the SHORELINE AREA.
[21] For additional information regarding deadlines, please refer to the Regulations Controlling Housing and Urban Development, Article VI. 3.5.
[22] A basic plan includes general floor plans, architectural distribution plans, facade, sections, elevation and roof plans. Furthermore, it should also include the criteria applied to the water supply and waste systems (sewage, drinking and rain water treatment systems), solid waste treatment and electrical system.
In the case of residential development projects, a basic plan includes the distribution of the plots of land, geometrical distribution of streets, indication of communal areas and contour lines. In addition, it should also include the criteria applied to the water supply and waste systems (sewage, drinking and rain water treatment systems), solid waste treatment and electrical system. Please refer to Article 5 of Executive Decree N° 29307-MP-J-MIVAH-S-MEIC-TUR, Regulations Governing the Approval of Plans for Construction Works Within the Shoreline Area.
8. APPROVAL OF CONSTRUCTION PLANS AND PERMITS.
8.1 INTRODUCTION.
The development of an architectural or engineering work modifies the natural or urban environment and affects third parties. Thus, the Government establishes regulations to prevent potential damages to third parties, as well as to minimize the impact caused to both public health and the environment. Compliance with these regulations is overseen by several institutions, as empowered by pertinent legislation.
In practice, public institutions have assumed this controlling responsibility through permits granted by way of official seals stamped on construction plans. These seals represent the applicant?s administrative authorization to proceed with the project proposed in the construction plans. In spite of the permits granted by the various public institutions involved, local municipalities are the entities ultimately responsible for granting a construction permit.
Following is a summary of institutional powers and legislation on the subject:
The Organic Law of the Professional Association of Engineers and Architects Nº 3454 and its pertinent amendments, establishes the Professional Association as the Government?s advisory body on subjects of its competence. The law does also expressly mandate the Association to safeguard the highest level of propriety in the exercise of the profession, regulate their exercise and ensure compliance with the laws, regulations and other special codes issued by said Association.
By constitutional mandate1, the municipalities are responsible for the administration of the local interests and services of the community under their jurisdiction. The Constitutional Court has understood that these administrative powers include full authority regarding urban planning matters, to complement the dispositions set forth in Urban Planning Law N° 4240 and pertinent amendments (Article 15), and the Construction Law N° 833 and pertinent amendments (Article 1)2. Said legislation establishes the following municipal responsibilities regarding urban-related matters: ensuring that "the public thoroughfares of their cities and towns meet adequate safety, sanitation, comfort and attractive conditions"; as well as local planning. In accordance with Articles 10, 57 and 70 of the Urban Planning Law, the municipalities are responsible for granting construction permits and collecting the 1% property tax imposed on the value of constructions and residential developments carried out in their jurisdiction.
Through Public Health Law N° 5395 and pertinent amendments (Articles 287, 309, 312, 322 and 323, among others) the Ministry of Public Health is empowered to issue and ensure compliance with existing regulations to ascertain that construction projects meet with minimum conditions in regards to sanitation, safety and well-being acceptable to tenants and neighbors.
The Urban Planning Law confers to the Urban Development Department3 of the National Housing and Urban Planning Institute (INVU), control over all national interest bearing regulations (planning and urban development)4. Additionally, the responsibility of "inspecting and approving the plans related to urban or residential development projects, prior to municipal approval."
The Costa Rican Shoreline Area Law (N° 6043 and pertinent amendments) empowers the Costa Rican Tourism Institute (ICT) to supervise tourist-related development projects (plans and constructions) within said zone.
8.1.1General requirements for construction plans.
All construction plans must should abide by the regulations set forth in:
The Regulations for Construction Works, published in the Official Gazette N° 56, Annex 17, dated March 22, 1983, and pertinent amendments.
The corresponding regulating plan (duly approved, published and in force).
Additionally:
All condominium plans should conform to the regulations set forth by the Condominium Property Law N° 7933, and pertinent amendments, dated November 25, 1999 and the Executive Decree N° 29397.
All urban and residential development plans should conform to the regulations set forth by the Regulations for Controlling Housing and Urban Development, the Regulations of the National Housing and Urban Planning Institute (INVU) N° 3391, dated December 13, 1982, and pertinent amendments.
Construction requirements and procedures vary depending on the type of construction. Therefore, below is a general explanation concerning said procedures.
Small is Beautiful
In conservation, small is beautiful. Any large tourism project has to have air-conditioning, swimming pools, lots of electric lighting, lots of bathrooms with abundant hot water, etc. in order to meet certain standards of mass tourism so it can be profitable. Many of the lodges that are on the New Key list have none of those things. People do not have to be bussed away from the lodges to see wildlife -- they see wildlife from the porch of the hotel because the habitat is still intact, and lighting and noise have not scared the animals away. But the ICT survey is skewed toward large businesses. According to CST officials, any business is welcome to be certified regardless of its size, but in reality, the ICT has a negative reputation among small businesses, which makes the latter reluctant to get involved.
There are 68 lodges on the New Key list. Of these, only seven appear on the ICT list. Why such a huge discrepancy? To find out I asked for comments from 18 lodges on the New Key list. I asked them if they were familiar with the CST and if they had reasons for applying or not applying for it. I also asked them to describe the impact (if any) of the New Key list on their businesses.
I received answers back from ten of these businesses. One had changed hands; one reply was irrelevant, not really answering the questions I asked, but making general statements about their hotel's "green" practices; two were in the process of applying for the CST; and five stated that they were not applying. Their reasons can be summarized in the following quotes from two businesses in very different parts of the country:
"The fact is, we've had very frustrating experiences in our contacts with the ICT. We had to go through a big bureaucratic procedure to get classified as a "microempresa turistica" (following the ICT's suggestion), but this classification has done absolutely nothing to further our small business. The ICT doesn't think small businesses like ours benefit the country. And sincerely, we have felt that the New Key and other guidebooks have given us more support and had more impact on the life of our business than the ICT. For these reasons, we are reluctant to participate in this type of government initiative, which can change with the administration in power...that is to say, contrary to its name, the CST is not sustainable."
"We have heard nothing about CST. I do remember that anything related to ICT means enormous expenditures of energy, filling out countless papers, forms, studies, certifications etc.. We can't take that much time off work and projects, to do all that, and in the end we are too small for them to bother with anyway.
This shows that, in order to gain popular support, the certifying agency should be one which is well-regarded by the tourism industry, large and small projects alike. It also indicates that the process should be made as un-bureaucratic as possible. Perhaps that means that it should not be run by a government agency.
Although I wrote to several businesses that appeared on both the New Key and the ICT lists, the only one I received an answer from was Rara Avis. Its owner, Amos Bien added some excellent comments about the way the survey itself was weighted toward larger businesses. Amos writes:
"I fully support CST and would like to see it implemented worldwide. However, several serious changes must be made to it for it to be really effective:
1. It doesn't work well for small and microbusinesses because of the ISO-like requirements for written registers for just about everything. This can be gotten around, but the instrument must be slightly modified to do so.
2. It doesn't base its criteria for energy and water conservation on absolute consumption (liters per guest per night; KWH per guest per night), which would level the playing field for hotels large, medium, and small, but rather on conservation devices which would allow a big hotel with huge water consumption for swimming pools and golf courses to score better than a hotel with extremely low consumption, but without fancy devices to do so. It stacks the deck in favor of big consumers.
3. There is a statistical artifact in the design of "not applicable" questions, which gives additional weight to nonconformities by smaller hotels. Instead of excluding the questions, hotels with N/A for swimming pools and golf courses should receive maximum scores.
4. It does not take into account historical and archeological sites, living cultures, and habitats not found in Costa Rica (tundra, deserts, coral reefs, etc.)"
The CST would be well-served to take these suggestion into account.
d) The Urban Code:
This codex is a recollection of several laws, regulations and a declaration, regulating land subdivision, urbanization, development and related zoning and housing issues, which are conventionally classified as: i. Planning and Zoning; ii. Housing and Public Sector; iii. Construction and Urbanization; iv. Public ways; and v. Urban Property. We will briefly describe the most outstanding ones:
Urban Planning Law: or Law N°4240 of 1968, revolves around a major concept called ?National Plan for Urban Development?, assigns several functions to the National Housing and Urban Institute (INVU), the Municipalities and other government agencies particularly related with the subject.
Regulation for the National Control of Land Subdivisions and Urbanizations: This is an INVU Ordinance from 1982, it has two important definitions that trigger the whole chapter: "Land Subdivision: the subdivision of any field with the purpose to sell, transfer, negotiate, deliver, exploit or use in a separate manner, the resulting parcels; inclusive of judicial or non-judicial awards subdivisions, localization of undivided rights and simple subdivisions by owner?" and "Urbanization: The subdivision and preparation of a field for urban purposes through the opening of streets and the provision of services." It sets a body of technical standards and requirements that said land developments must comply with. Under article II.2.1.5. there is an exception to the rule for what the Regulation defines as ?Agricultural Parcels? ie. parcels located in a qualified zone greater than 10 thousand square meters.
Law of Constructions and its Regulations: This is Decree N°833 of 1949 with amendments and modifications. It recognizes the necessity of cities and other populated areas to have minimum security, health, comfort and esthetic levels in the public ways and constructions, and delegates such regulation to the respective Municipality where the land is located without prejudice to the authority of other agencies.
Regulation of Condominium Ownership Law: or Law N°7933 of 1999, this is the equivalent of the Condominium Act in the US or Canada although much simpler and generic. It defines the Condominium Property Regime, its standards and requirements and procedures for submission. It also establishes the rights and duties of the owners and other due diligence issues.
e) Maritime Terrestrial Zone Law and its Regulations:
Law N°6043 of 1977, defines the Maritime Terrestrial Zone as part of the national patrimony, belonging to the state of Costa Rica, unalienable and unrenounceable. It is subdivided in Public Zone: a 50 meter strip of land counted from the ordinary high tide and surface land during low tide (conventionally known as the beach); and Restricted Zone: constitutes the remaining 150 meters land strip or the remaining surface in the islands. The Restricted Zone is under the administration of the nearest Municipality with the supervision of the Costa Rican Tourism Board (I.C.T.).
Concession: The Restricted Zone can be granted in concession by the Municipality in terms not less than five years and not greater than 20 years, renewable indefinitely upon request by the concessionaire, in accordance to this Law except the exceptions thereto established. Concessions in tourist areas require the approval of ICT and in the other zones the approval of the Agrarian Development Institute (I.D.A.), and always the Housing and Zoning Institute (INVU) approval, both institutions cannot deny the approval unless the concession violates the Law.
Concession Title: The land where concession is given is patrimony of the Costa Rican State, the Municipality does not own title to concessions, as Administrator they are responsible for the enforcement of the Maritime Terrestrial Zone Law, the development and use of the maritime terrestrial zone, and they are custodians to zones where a concession has not been granted.
Under article 47 there is a prohibition to grant concessions to:
- foreigners who have less than five (5) years of legal residency in the country.
- corporations with bearer shares.
- foreign entities (corporations or companies).
- domestic entities established by foreigners.
- entities which more than 50% of the shares or stock is owned by foreign owners*. * Under article 47 entities owning a concession, or their shareholders, cannot transfer or yield stock or shares to foreigners. Any acts in breach of this provision are regarded to be null and void by the Law. Note: The exposure resulting from article 47 can be minimized to acceptable levels through the use of specially customized entities like a Family Limited Partnership that a knowledgeable attorney could produce.
building in costa rica
Building a Home
If you've looked around and had trouble finding the perfect abode, you may consider building your own. While there are many advantages in designing and building to your own specifications, the experience usually requires a great deal of work and patience.
Most Costa Rican architects and contractors are not accustomed to planning and building up to American and European standards. However, good companies with extensive experience do exist. It is of the utmost importance that you spend the time to research the various companies. Look for an experienced construction firm that can provide assistance with permits and other logistical matters. Meet with them, ask questions, and make sure that you are able to communicate effectively with them.
By law, only architects and engineers who are members of The Costa Rican Association of Engineers and Architects can file applications for construction permits. Only after reviewing your construction plans and determining that they meet all electrical, seismic and structural regulations, will they file the application. Rates charged by architects vary considerably, but here are the minimum rates of members of the Costa Rican Association of Engineers and Architects:
0.5 % of the project cost for a preliminary survey of the plans and permits, which is only necessary depending on the job.
4.0 % of the project cost for a full site planning, drafts, review of construction plans and technical specifications.
1% to 1.5% of the project cost for a pre-project design.
1.0% of the project cost for itemized budgeting.
0.5% of the project cost for global budgeting.
Construction and Project Supervision (3 levels)
Management: Architect fully oversees the entire project. Cost: 12% of construction costs
Supervision: Architect visits the job site daily to supervise the project. Cost: 5% of construction costs
Inspection: Architect visits the job site once a week to make sure that the plans is being followed by the contractor. Cost: 3% of construction costs
When you have agreed on the general design of the property, your architect will draw up the plans, as well as a materials list and construction budget. Your total planning package should include the following items:
a site plan
elevation, longitudinal, and transversal perspective drawings
distribution plan
roof and drainage design
plan of footings and supports
structural plans
electrical plans
mechanical plans
sanitary system
interior design and construction
Construction permits are required for any house with an area greater than 750 ft². Submit the application to the Oficina Receptora de Permisos de Construccion (Permit Reception Office). You will need to provide them with the following materials:
Four copies of the construction plans
Two copies of the property deed
Four copies of the property cadastre plan
One copy of your electrical design plan approved by SNE
One copy of the architect or engineer's consulting contract
Approval from the water department regarding availability of a water source This application will then be reviewed by the following agencies before a decision is made:
Roads and Transportation Department (MOPT)
Electricity Department (ICE)
Water Department (AYA)
Housing and Urban Development Department (INVU)
National Electrical Services (SNE)
Health Department
Costa Rican Architect and Engineer Association (CFIA)
Local Municipalities
Estimating the total cost of building a home is difficult without the construction plans. However, depending on materials and the quality of work, you can expect the cost to range from US$30-50/ft². This is still considerably cheaper than building in the U.S.
Building a home can be a challenging venture, especially in another country. Here are a few things to consider when taking the leap. When construction does begin, try to spend as much time as you can on site to confirm that everything is going as planned. As a homebuilder, you might also consider paying the contractor as the job progresses, in addition to materials up front. A happy crew may be more likely to maintain a high standard of quality. Contractors generally receive discounts on materials, and they may want to use comparable materials that provide them with the largest profit margin. Make sure that they use materials that were agreed upon in the contract.
Costa Rican law imposes strict guidelines on zoning and construction. Along both the Pacific and Caribbean coasts, 200 meters inland from the high tide is owned by the government. Within the first 50 meters of this area, building anything is strictly prohibited. However, with permission from the local municipalities and the Costa Rican Tourist Board, the area from 50 to 200 meters above high tide can be leased. This is legally prohibited for foreigners, yet there are ways around the stipulation. Vertical requirements also exist. The ICT discourages building anything over three stories within beach areas. Along rivers, building a house is prohibited within 50 to 100 meters from the shore.
BUYING & OWNING - Rules of the Road
Buying and owning property in Costa Rica, or any foreign country can be a confusing and intimidating process. How can I make a safe and efficient transaction? Can I just leave everything up to the lawyer? What are my rights as a foreigner? Can squatters invade my land? These and many other questions will be answered in the information provided in this guide. Costa Rica does have a system, although not perfect? it works fairly well. Thousands of foreigners have safely invested here. You can be one of them. Unfortunately, many foreigners become so enchanted with the country and it?s people that they fail to exercise good judgment and common sense, or another familiar scenario... making decisions on what "they thought they understood to be the rules". In Costa Rica, you will find similarities to stateside rules but many aspects of the system are different. Take the time to learn the basics! Also, as a buyer, being somewhat knowledgeable during the process will cut down on wasted time looking at properties that don?t fit your needs or properties that are unsuitable for one reason or another. The information provided here will go a long ways in getting you started.
Property or Finca - The three basic categories?
PRIVATE LAND / TITLED : In Costa Rica, foreigners can own titled property in their own name and share the same rights as a Costa Rican citizen. There are two documents which, similar to the states, describe "titled" or fee simple property ( land outside the beach zone ): First, the title itself or escritura. Titles are registered in the national registry or Registro Nacional, and show ownership along with any leans, mortgages, or judgements. The second part is the registered survey map or plano catastrado. The plano serves the purpose of recording measurements, size and location along with other useful information like whether the land falls inside restricted areas such as IDA Land (co-op owned lands with the government) or inside protected areas like national parks and reserves. NOTE: The escritura and the plano may be different from each other and yet refer to the same property. The plano is NOT the ownership document and may even reflect a previous owner?s name. Ownership of the land (title or escritura) is recorded in a separate department of the national registry. Both parts must be checked to verify that ownership and mapping coincide with the same piece of land. These two departments are currently making internal changes to make the process a little less clumsy. Once a property is titled for the very first time (original inscription), there is a three-year "incubation period" where third parties can make a claim. However, any new claims must carry a fair amount of proof before a title can be challenged. After three years, a claim can still be filed but calls for extraordinary circumstances. There is a ten-year statue of limitations for such claims.
DECLARATION OF VALUE: ( Titled Land ) It is common in many land transactions to not claim the actual selling price but declare a lower value so as not to pay higher taxes and registration fees. This is the buyer?s decision but may not be advisable in all cases. If there were ever a future claim against the seller or the government, or you wanted to mortgage the property, any reference would be made to the recorded value and not the actual price that was paid. You may also consider that in the future if you resell the property, it may be more difficult to explain a substantial difference between what you are asking and what you paid for the property. Consult your lawyer before making this decision.
PRIVATE LAND / UNTITLED : ... also called "possession" land. Most of the land in Costa Rica falls in this category. Even though many lands are untitled, it does not mean that they do not qualify for title. Some do and some don?t. In a possession scenario, it is the recording of the legal transaction that establishes possession or ownership rights...not a title. The reason for this is that for many years, farmers and settlers (for any number of reasons) never applied for their title but possessed them in a "legal manner", established boundaries and transferred rights through private documentation. When properly recorded, these rights are completely legal, fully transferable and can qualify for inscription in the national registry as fee simple title. Legitimate possession rights can be demonstrated by researching the history of ownership recorded through private documentation. This is done through a properly recorded bill of sale in a lawyers protocol book. The bill of sale or carta de venta shows transfer of ownership and describes the property in words relating to the surrounding properties and well defined landmarks. Pages from the lawyer?s protocol book are then registered in the national registry.
The other side of the possession issue, are lands occupied and claimed by illegitimate settlers or "squatters"; someone claiming rights of ownership but have no "ownership documentation", only that they occupied the land for a certain amount of time. In these cases, there may be some form of rightsestablished but it is more difficult to define. Costa Rica does have a homestead law or precario law that sets the guidelines, however it is outdated and needs to be modified. Sometimes there is a clear distinction between "legitimate possession" and "illegitimate possession" and sometimes there is not! BEWARE!
In 1941, a titling procedure called Ley de Informacion Posesoria was created by the government as a means for landholdes to record or "register" their land that has been "held in possession". Many lands have been registered using this procedure. Minimum requirements to qualify for a registered title to possession land are a registered survey and verifiable history of legitimate possession "passively and publicly" for a minimum of 10 years with no disputes. The remaining parts to complete the title process are notarized statements from adjacent property owners along with a judge?s inspection and review of all documents. This process, done with the help of a lawyer, can take up to a year (possibly more) and cost between $1,500 and $3,000 depending on the size of the land. NOTE: Possession lands cannot be liened or mortgaged as they have not yet been recorded in the national registry.
In some cases, a buyer will pay for the title process after the sale or even make it a condition of the sale or escrow. Keep in mind that not all cases are alike. It takes a good understanding of the history of ownership for each property. In general terms, it is a good rule to not buy untitled property if you are not clear about how it works. However, considering that most of the land in the country is untitled, it is logical that most of the land transactions have to do with untitled land. Many people have safely bought possession lands including foreigners. Many foreigners here in the Osa have purchased possession land.
BEACH LANDS: or Maritime Zone lands are dealt with in a different way. The Maritime Zone Law or Ley Zona Maritima Terestre 6043, commonly called the "Concession Law", was established in1977 and defines the Maritime Zone (ZMT) as the 200 meter strip of land along the shoreline, calculated from the "average high tide". It is owned by the state and jointly administered by the corresponding municipality and the federal institution ICT (Costa Rican Tourism Institute). The ZMT is described in two parts...the first 50 meters is public domain or "public zone" and cannot be developed or claimed by private persons. The next 150 meters or "restricted zone" can be claimed by private persons who solicit the municipality for the concession rights.
First, it is important to understand that the Maritime Law and awarding concessions was designed under the assumption that the land has undergone an approval process establishing what we know as "zoning" or planificacion. If not, rights of ownership and development of coastline property is strictly on a provisional basis. In these cases, the municipal goverment administrates what is considered a "right of occupation" through a permiso de uso, a provisional lease or right of usage also called an ariendo, which is recorded with the municipality once an application or solicitude de concesion is received and acknowledged. Contrary to popular belief, these provisional leases have no time limit as they are intended only as an "interim right" until proper zoning is in place and concessions can be awarded. The "interim occupant" may pay a voluntary, symbolic "occupation tax" or canon for the corresponding permiso de uso and has the right to make certain improvements to the land and build a "temporary structure"...nothing more. Even though you will find permenant structures of all types and sizes all along the coastline country wide, this does not necessarily mean that the mandatory zoning and concession process took place. Over the years, municipal governments have been very complacent about development along the coastline. However, the law is clear, development on any particular parcel of land is allowed only once zoning has been approved and a concession has been awarded.
Zoning and Concessions: Over time, sections of shoreline around the country have been declared as having "touristic aptitude", thus qualifying that section of land for traditional development and zoning under the Maritime Las. Zoning is implemented through a proposal or regulatory plan called a plan regulador. Once a regulatory plan is elaborated and approved through the corresponding institutions: ICT, INVU and the corresponding municipality, the "recognized occupants" inside the newly zoned area can now process and "activate" their solicitude de concesion assuming the intended use coincides with the declared zoning or usage called uso del suelo. Concessions are awarded in the form of a contract and are inscribed in the national registry giving the concession holder exclusive rights of ownership, development and right of transfer. Concessions for residential and tourist projects are automatically renewable every 20 years for eternity assuming the terms of the concession contract are met by the concession holder, which basically are... respect the public zone, pay your taxes and develop in accordance to the zoning regulations laid out in the regulatory plan. Stories of 99 year leases etc. are simply not true.
Even though there has been a substantial amount of development in the ZMT over the years, surprisingly, 90% of the coastline in Costa Rica is still without approved zoning...and 90% of the occupants inside the ZMT have a provisional permiso de uso, NOT a concession....and therefore, 90% of the development inside the ZMT is technically illegal. This fact may sound alarming but in the past, the government never placed a high priority on this issue and people built and developed under lax rules by the local municipality. Today, the situation is much different in terms of allowing any further development along the coastline even though there is still little or no government funding available to pay for the required regulatory plans. However, the government does allow third parties to present zoning proposals for approval assisted by private certified planners. Costs to hire a team of planners are actually quite reasonable; $20,000 - $30,000 for a complete proposal covering approximately one kilometer of coastline. The zoning and concession process typically takes 3-4 years to complete.
The "purchase" of beach property is essentially a private agreement between two parties. Technically, the law prohibits "buying and selling" of state domain. Costa Rican citizens or foreigners having at least 5 years of residency can register beach property in their own name. All other foreign citizens must register the rights to their beach parcel through a Costa Rican corporation formed by an attorney, a simple process that takes about 30 days and costs around $600. The corporate board of directors may be formed by foreign residents but must have at least fifty percent of it's shares held by a Costa Rican citizen. You will see the initials S.A after many corporation names. This stands for Sociadad Anonima or "anonymous society" which is the most common type of corporation used because shareholders have anonimity. The shares are "bearer shares" and are registered in a private registry (the corporate books).
Alternative to the Maritime Law: In 1992, The Ministry of Environment and Energy or MINAE created a new law called The Law for Conservation of Wildlife No. 7317. This decree by the central government offers a program for landowners allowing them to declare their land as a "protected zone" while maintaining ownership rights and allowing certain development and or other activities. This program also encompasses the beach lands or Maritime Zone. In this case, administration of the permiso de uso essentially changes from the local municipality to MINAE. Usage rights are similar to those described in the Maritime Law except in some ways are less restrictive. In particular, traditional zoning or a Plan Regulador is not required and the uso del suelo (declared usage is established through a simpler instrument called a Plan de Manejo or management plan. The plan de manejo describes the project and land usage, be it a residence, tourist project, agriculture or other uses of public and social interest. The specified area or protected zone is then declared a wildlife refuge or Refugio de Vida Sylvestre. Basic guidelines for environmental impact and sustainable development are spelled out in the refuge law, however, large projects are required to present a more detailed study. The purpose of these refugios is to place more lands in state protection while still allowing low impact development. For refugios in the Maritime Zone, concessions are not awarded. Instead, usage contracts are registered with 10 year permisos de uso. Contracts are renewable each term by soliciting the ministry every 9th year. A fixed occupation tax or canon is paid yearly to MINAE but refugios incorporating private, titled land are exempt from the vienes imuebles (land tax). This has become a popular zoning alternative for maritime lands around the country in cases where low impact usage and environmental condtions can be justified. There are no restrictions on foreign ownership under the refuge program. This option may or may not apply or make sense in all cases so it is important to make a proper analysis.
ABOUT SQUATTER?S RIGHTS: "What do I do if I am an absentee owner. How do I protect my land from being occupied by third parties?" The answer is simple? have someone responsible check on it once a month while you are gone. You can also have someone live on the property as your caretaker. If you hire a caretaker, draw up a written agreement and have it notarized by an attorney. Handshake agreements can be full of good intentions but may be a problem later. Don?t make this avoidable mistake. Get it in writing.
Articles in the civil code outlines Costa Rica?s homestead law or Precario law. Basically, the law allows peaceful occupation of "untitled and unattended land" unless there is opposition by the existing owner. If your land is unattended and someone moves onto the land, they begin to establish certain rights after three months. Action for removal is required before the end of the third month but the process is less complicate than if they occupy the land for a longer period. If squatters have occupied the land for more than three months but less than a year, the process of eviction called desalojar or desalojo, becomes more involved. Although eviction is more complicated, you are not yet required to reimburse the occupants for their "improvements" to the property. If the land is occupied for more than a year but less than ten years, you may still be able to recover the property, but the legal process may take years and you will be required to make a settlement for the "improvements" made by the occupants. "Improvements" can range from the construction of shacks, planting of crops and even cutting of trees to clear the property. Improvements and compensation are established by the court. In most cases, it is best to negotiate an out of court settlement. If someone is living on a property you are interested in buying, be it the owner, a relative, a worker etc., you must be sure this is addressed and settled as a condition of the transaction. Precario rights can affect both titled and untitled land but the process of eviction for titled property is in theory, faster and less complicated.
The department of IDA, The Agrarian Development Institute, was established in 1961. This government agency was formed when Costa Rica was trying to develop and expand it?s farming production. The institute was designed to represent landowners in cases where legitimate possession rights were being challenged or where land was not being utilized for some form of productive agriculture. One job of the institute is to defend the rights of the possessor as outlined in the precario law?sort of a public defense body for peasant landowners unable to defend themselves against larger landowners trying to "expand" their territory. However, there are many cases today where the system is abused and people fall victim to "de-facto tenants". That is why it is important to know the history of possession and above all?. follow the rules. If ownership is legitimate?it must be demonstrated within the guidelines outlined in the law. It is important to remember that the precario law and the recognition of possession rights is considered the first step in the titling process and is the basis of how many lands were originally settled and eventually titled in Costa Rica ? in a legal manner.
OPTION AGREEMENTS: In some cases, a buyer may want to make a down payment or buy an "option" on a piece of land. The final deal may depend on some outstanding details to be worked out or obligations to be met, but both the buyer and the seller would like to formalize a provisional agreement. Examples might be that the land needs to be re-measured to verify boundaries or that the seller offers to make improvements before closing. Option money can be given directly to the seller or be held in "escrow" depending on the circumstances of the deal. Option contracts must be notarized by an attorney but are normally not recorded in the National Registry. Therefore, it is recommended the buyer put down a minimum amount in case the deal goes astray. If the deal falls through, it may be difficult to recuperate monies spent. Going to court is a lengthy process and not worth the effort unless large sums are involved. Terms of the sale should be written in the option contract including settlement if the deal does not transpire. Usually, the buyer forfeits the option money if he backs out of the deal without good cause.
REAL ESTATE AGENTS: In Costa Rica, there is little governmental regulation of the real estate industry. However, a knowledgeable real estate expert will be invaluable in helping you with many aspects of your purchase. Get a local recommendation for an agent with a good track record. Ask several of the foreigners living the area who has the best reputation in town... and then ask the agent for some references. In general, a good agent performs a more critical role than stateside agents as the system in Costa Rica is far less sophisticated. There are no formal escrow companies, mortgage companies or banks that assist in the process. In some ways, this puts more responsibility on the agent. For example: All listings must be thoroughly researched before a property can even be considered, especially in rural areas. In some cases, a field agent will not only show you property, but also work directly with the lawyer, the surveyor, the property owner, the registry, and follow up on a host of details until the transaction is completed. The agent represents both the buyer and seller so that when it?s time to draw up the sale document, all issues are discussed and agreed upon before closing a transaction. In any field of endeavor, competency is paramount. Never more so than in successful real estate transactions in Costa Rica. Agent commissions are normally paid by the seller but in some cases, the buyer and seller may split the commission if agreed to in advance.
NOTE: Beware of people off the street...bartenders, taxi drivers etc. (Costa Ricans AND foreigners) that offer to sell you property. They have no sense of real estate as a business and the attraction of a commission from the seller may outweigh their concern for the protection of the buyer...YOU! There are many properties in Costa Rica where ownership rights are unclear, borders are undefined or properties with problems due to hidden conflicts of one sort or another. Getting a lawyer is not enough! A knowledgeable field agent that knows the area and the history of the property will not only show you qualified properties, but will help work out many issues before it?s time to finalize the details with a lawyer. A good agent will also help educate you so you can make an informed decision!
LAWYERS AND CLOSING / THE PROCESS OF SETTLEMENT: Once you have found the property you want to buy, you will need an attorney / notary to execute the transaction. As with real estate agents, it is typical for an attorney to represent both the buyer and seller. It is the buyer?s right to select the attorney?an important step. Equally important as selecting your agent! Ask around and get a good recommendation by others that have had a good experience. Again, you may want to ask for client references. Documents are in Spanish so if you don?t speak and read good Spanish, make sure your attorney can translate them for you. Only a state certified Notary can authenticate a real estate transaction. In Costa Rica, a Notary must also be a lawyer. However, some practicing lawyers are not Notaries but work with a partner that is the official Notary. This is not a problem. Just make sure it is clear that all documents will be certified by your attorney or his / her partner.
It is the lawyer?s role to draw up the contract or carta de venta. However, before the sale document is executed, the lawyer must verify the position of the existing registration including liens, mortgages, etc, and make sure all back taxes and government fees are paid up to date.
IMPORTANT: Keep in mind that a lawyer may not cover ALL the issues in some land transactions, be them titled, untitled or beachfront properties. Some, which may need to be considered in the sales contract. In most cases, the lawyer never even sees the physical property and can?t advise you on issues such as describing physical access (it may differ from access shown on the survey map), or that the survey map coincides with the physical borders like fence lines, and in some cases ( as with possession property ), organize notarized statements with bordering neighbors stating there are no boundary disputes or usage agreements with third parties. Also, describing and guaranteeing water rights, and how to handle existing tenants or crops. Another example is in transferring beach leases. The lawyer?s job is basically finished when the documents are presented at the local municipality. Who will follow up to make sure the transfer is approved? A good agent will. Your agent plays a vital role in the entire process. Get a good one and remember...getting a lawyer is not always enough!
CLOSING COSTS: Unless agreed otherwise, it is customary for the buyer and seller to share equally in the closing costs. Typical costs are shown below.
ATTORNEY / NOTARY FEES: The state sets a national fee which most lawyers abide by. However, fees may vary between a San Jose Lawyer and a small town lawyer and may also reflect other work performed by the lawyer that are outside a typical transaction. Established fees are set at 1.5% of the sale price for the first million colones, 1.25% between one and ten million colones, and 1% above 10 million colones. One million colones is approximately $2,200 US.
The following fees apply only to titled property and it?s subsequent recording at the national registry. It does not apply to untitled or beachfront property:
TRANSFER TAX: 1.5% of the declared value
PUBLIC REGISTRY FEE: 0.50% of the declared value is paid to the registry for recording the documents
DOCUMENTARY STAMPS: 0.55% (approximately) of the declared value for stamps affixed to the documents.
TITLE INSURANCE: Steward Title has recently set up shop in Costa Rica but it is unclear their true role in selling title "insurance". All types of insurance (except title insurance) in Costa Rica are offered exclusively by the national government agency called INS, Instituto Nacional de Seguros. INS is a legitimate government monopoly and technically, it is against the constitution for outside vendors to offer insurance of any kind. Aside from that, the national registry is open to the public and any attorney can perform a title search. The Costa Rican constitution guarantees your property rights however, "title insurance" may justify some peace of mind. Stewart Title charges 1.5% of the sale price or a minimum of $700. The policy covers properties with fee simple title, not possession land or maritime zone ( beachfront )
FINANCING: Although the constitution allows equal access of credit to both foreigners and nationals, it is more difficult for foreigners to qualify. Out of country collateral and income is not normally considered by the banks. In some cases you will need a co-signer or fiador. Even then, interest rates are very high so it is probably more practical to bring funds from abroad. In addition, many properties don?t qualify for a mortgage. Beachfront property with a permiso de uso doesn?t qualify for a mortgage (not even for Costa Rican citizens) because the land is technically owned by the state ... not the occupant. Untitled property is also non-attachable, therefore, unable to mortgage. On occasion, some terms may be negotiated with the seller but are usually short in length. For these reasons, most all real estate transactions are paid in cash upon closing.
LAND TAXES:Collection of land taxes was turned over to the local municipalities several years ago. In the case of private land (both titled and untitled), property tax or vienes imuebles previously paid 6% of the declared value based on the Tax Law No. 7509. In May of 1995, this code was changed and the tax was lowered. According to the new law No. 7729, taxes are based on 0.25% of the declared value. In most cases, lower values are claimed than what the actual selling price was. Maritime property or permisos de uso pay an "occupation tax" called a canon. Again, very cheap. A one-acre beach lot with no structures pays less than $10 per year. Improvements like a house etc. are taxed in addition to the canon and pay a vienes imuebles tax based on the value of the construction. A medium size house on a small beach lot normally pays less than $100 per year. Once a beach property has been awarded a concession (only after an approved zoning plan is in place) the tax goes up dramatically and depends mostly on how the property was declared i.e. residential, commercial etc.
BUILDING: The process of getting permission to build (outside the beach zone) can be complicated depending much on where your property is. Beachfront development has a different set of rules as compared to private land (see section on the Maritime Zone). Although it is national code that regulates building, practical application will vary in populated areas like San Jose versus rural areas such as the Osa Peninsula. Code is not nearly as strict as in the states. In rural areas, it is quite simple. You must present proof of ownership and a set of building plans signed by a Costa Rican architect. There is a preliminary study and an anteproyecto performed by the architect. Set fees for architects are between 4%-6% of the value of the construction. For larger projects, you may be required to do an environmental impact study and possibly another study for supporting infrastructure...at your own expense. For residential construction, it is a single permit issued at the local municipality with a one-time inspection before construction begins. In rural areas, follow up inspections are rare. It is the architect?s responsibility to make sure you follow the approved plans. You must have a proper septic system and water supply. The permit process should take a couple of weeks not counting the time it takes to draw up your building plans. In rough numbers, you can build a moderate size, furnished, two-bedroom house for around $40,000. Granted, they are of a simpler design but decent quality. Some materials like cement and wood are equal to stateside prices but labor is very inexpensive. General labor costs are around $10 per day and a decent carpenter or block layer will cost around $20 per day.
DISCLAIMER: The author?s intention is to explain many of the important issues before you consider making a purchase, be it titled land, possession land, or beach land. This information should not be considered a recommendation to purchase land in a particular category. Though this information is well researched, it is not the intention of the author to suggest that this is the only source of information. In all cases, ownership rights are established by Costa Rican law and there are no warrants implied that your investment is 100% risk free. This writing may or may not reflect subsequent changes in the laws. In all cases, good legal counsel is recommended.
8.6 APPROVAL OF PLANS FOR CONSTRUCTION WORKS WITHIN THE COSTA RICAN SHORELINE AREA (ZMT IN SPANISH).
These procedures are ruled by the Regulations Governing the Approval of Plans for Construction Works Within the Costa Rican Shoreline Area (ZMT in spanish), Executive Decree N° 29307-MP-J-MIVAH-S-MEIC-TUR19.
It should be recalled that prior to pursuing this stage, the applicant should have complied with the general requirements for construction plans outlined in Section 8.1.1, including obtaining the approval of the Professional Association of Engineers and Architects (Section 8.3). The pertinent legal basis can be found in Section 8.8.
8.6.1 General requirements.
In accordance with Article 3 of these Regulations, prior to building within the Costa Rican Shoreline Area (ZMT) and initiating the approval procedures, the applicant should have first complied with applicable requirements and regulations (concessionaire within a Shoreline area (ZMT), or in Papagayo, or land owner within the Shoreline Area (ZMT) holding a title deed), as explained in Section 4 of this Manual. In accordance with Article 3 of these Regulations, in order to be able to pursue construction works within the Costa Rican Shoreline Area (ZMT) and initiate the approval procedure, the applicant must have complied with applicable requirements and regulations (concessionaire within a shoreline area, or in Papagayo, or land owner within the shoreline area holding a title deed), as explained in Section 4 of this Manual.
To be able to pursue construction works within the Costa Rican Shoreline Area (ZMT), the applicant must either hold a concession contract dully approved and registered at the Land Registry Office, or be the owner of the land in accordance with Law Nº 4558 or previous regulations.
The concessionaire is allowed to build behind the boundary that demarcates the limits of the public zone and the Costa Rican Shoreline Area (ZMT), as per the regulating plan. The owner may build on his or her property, as stated by the ownership title and in accordance with the regulating plan, if applicable.
8.6.2 Urban and residential developments for tourist use within the Costa Rican Shoreline Area (ZMT).
This procedure is pursued using basic plans20, in accordance with the Regulations Governing the Approval of Plans for Construction Works Within the Costa Rican Shoreline Area (ZMT), Executive Decree N° 29307-MP-J-MIVAH-S-MEIC-TUR, Article 9. Final construction plans are not necessary for this procedure, as the final plans should remain at the worksite.
The applicant should submit the application to INVU?s Urban Development Office, located behind the former Santa Teresita Customs House in San José.
Requirements.
Six (6) sets of basic plans, duly approved and stamped by CFIA (one for INVU?s Urban Development Department; one for the Ministry of Public Health; one for the Water Works Institute (ICAA); one for the owner; and another for submission to the municipality). The plans should be accompanied by the documents listed in Section 8.5.2.
The voucher issued by the Urban Development Department (please refer to the table showing applicable fees in Section 8.5.3).
A copy of SETENA?s resolution concerning the environmental impact evaluation, applicable to projects subject to this procedure as per Section 7.
Description of the procedures.
The applicant submits the documents to the Urban Development Office, which acts as the recipient of the plans, forwarding them immediately to the above-mentioned institutions for their corresponding approval.
These institutions must resolve the approval within one calendar month maximum.
The institutions may, within this time frame, make relevant observations on a one-time only basis, in writing. The applicant must resubmit the documents showing the corrections or observations made. The corresponding institution must resolve this new submission within 14 calendar days as of the date of resubmission of the corrected documents.
Legal term.
The deadline is one calendar month21 in accordance with Article 9, Executive Decree N° 29307. Observations may be made on a one-time only basis, and 14 calendar days are allowed to resolve on the corrections submitted, if any.
Upon approval of the basic plan proceed to Municipality: Construction Permit (Section 8.7).
8.6.3 Buildings for tourist use within the Costa Rican Shoreline Area (ZMT).
The approval procedure related to construction plans intended for tourist use, is pursued with the basic plans22, in accordance with the Regulations Governing the Approval of Plans for Construction Works Within the Costa Rican Shoreline Area (ZMT), Executive Decree N° 29307-MP-J-MIVAH-S-MEIC-TUR, Article 8. Final construction plans are not needed for this procedure, as these plans should remain at the worksite.
The applicant should submit the application to INVU?s Urban Development Office, located behind the former Santa Teresita Customs House in San José.
Requirements.
Five (5) sets of basic plans, duly approved and stamped by CFIA (one for INVU?s Urban Development Department; one for the Ministry of Public Health; one for the Costa Rican Tourism Institute (ICT); one for the owner; and another for submission to the municipality).
The voucher issued by the Urban Development Department (please refer to the table showing applicable fees in Section 8.5.3).
A copy of SETENA?s resolution concerning the environmental impact evaluation, applicable to projects subject to this procedure as per Section 7.
Description of the procedures.
The applicant submits the documents to the Urban Development Office, which acts as recipient of the plans, forwarding them immediately to the above-mentioned institutions for their corresponding approval.
These institutions must resolve approval within one calendar month maximum.
The institutions may, within this one-month time frame, make relevant observations in writing, and on a one-time only basis. The applicant must resubmit the documents showing the corrections or observations made. The corresponding institution must resolve this new submission within 14 calendar days as of the date of resubmission of the corrected documents.
Legal term.
The deadline is one calendar month in accordance with Article 9, Executive Decree N° 29307. Observations may be made on a one-time only basis, having 14 calendar days to resolve on the corrections submitted, if any (for additional information on deadlines, please refer to footnote Nº 15).
Upon approval of the basic plan proceed to Municipality: Construction Permit (Section 8.7).
8.6.4 Constructions for Non-tourist use: individual or single families housing.
The approval procedures for the construction of houses for single families or individuals within the Costa Rican Shoreline Area (ZMT), requires final construction plans, in accordance with the Regulations Governing the Approval of Plans for Construction Works within the Costa Rican Shoreline Area (ZMT), Executive Decree N° 29307-MP-J-MIVAH-S-MEIC-TUR, Article 10.
The applicant must report to the Ministry of Public Health?s regional office serving the location where the construction works will be undertaken.
Requirements and Description of the procedures.
Two sets of the final construction plans, duly approved by the CFIA; one for submission to the municipality, and the other for the owner.
The Ministry of Public Health will only verify whether the construction plans meet all health and sanitary dispositions.
The Ministry of Public Health must resolve within a maximum of five working days.
For additional information regarding the requirements of the Ministry of Public Health (approval), please refer to Section 8.4.3, clause c, Annexes.
Legal term.
Five working days. In accordance with Article 10, of Executive Decree N° 29307.
Upon completion of this procedure, proceed to Municipality. Construction Permit (Section 8.7).
8.6.5 Constructions for non-tourist use within the Costa Rican Shoreline Area (ZMT).
Basic plans are used to pursue plan approvals for all non-tourist construction works, including housing and urban development projects (refer to footnotes Nº 20 and 22, Sections 8.6.3 and 8.6.4), in accordance with the Regulations Governing the Approval of Plans for Construction Works Within the Costa Rican Shoreline Area (ZMT), Executive Decree-29307, Article 11.
All requirements and procedures must adhere to the stipulations set forth in Sections 8.6.2 y 8.6.3; however, as they do not require ICT?s approval (given the non-tourist nature), one less set of basic plans is required to pursue this procedure than the number indicated in said sections.
[19] The following exceptions are excluded from the application of the Regulations Governing the Approval of Plans for Construction Works Within the Costa Rican Shoreline Area (ZMT) (Executive Decree-29307), Article 2: a) Cities located on the coast and declared as such by the National Housing and Urban Institute (INVU); b) Properties registered in accordance with Law N° 4558 and above mentioned regulations, whose title of ownership is duly registered at the Land Registry office; c) The shoreline areas located within national parks and equivalent reserves, as these are governed by their own legislation; d) The lands transferred to JAPDEVA as per Article 41, clause b) of Law 5337 creating the Port Administration Board of the Atlantic Coast, dated August 27, 1973, excluding the Shoreline Areas corresponding to both sides of the major waterways joining the ports of Moín and Barra del Colorado; e) The Mata de Limón zone which, according to Law N° 5582 and pertinent amendments, is regulated by the Puerto Caldera financing contract, thereby it is not considered a shoreline area; f) Tourist-related marinas, whose construction and installation procedures are determined by the Tourist Marinas Law N° 7744 and pertinent amendments; g) Agricultural projects; h) Construction of industrial plants, sports or craft fishing, harbor works, aquaculture and other programs regulated by Article 18 of the Costa Rican Shoreline Area (ZMT) Law N° 6043 and pertinent amendments; i) Infrastructure and construction works for public use or public tourist installations, referred to under Article 22 of the Costa Rican Shoreline Area (ZMT) Law N° 6043 and pertinent amendments.
[20] A basic plan includes general floor plans, architectural distribution plans, facade, sections, elevation and roof plans. Furthermore, it should also include the criteria applied to the water supply and waste systems (sewage, drinking and rain water treatment systems), solid waste treatment and electrical system. In the case of residential development projects, a basic plan includes the distribution of the plots of land, geometrical distribution of streets, indication of communal areas and contour lines. In addition, it should also include the criteria applied to the water supply and waste systems (sewage, drinking and rain water treatment systems), solid waste treatment and electrical system. Please refer to Article 5 of Executive Decree N° 27967-MP-J-MIVAH-S-MEIC-TUR, Regulations Governing the Approval of Plans for Construction Works Within the SHORELINE AREA.
[21] For additional information regarding deadlines, please refer to the Regulations Controlling Housing and Urban Development, Article VI. 3.5.
[22] A basic plan includes general floor plans, architectural distribution plans, facade, sections, elevation and roof plans. Furthermore, it should also include the criteria applied to the water supply and waste systems (sewage, drinking and rain water treatment systems), solid waste treatment and electrical system.
In the case of residential development projects, a basic plan includes the distribution of the plots of land, geometrical distribution of streets, indication of communal areas and contour lines. In addition, it should also include the criteria applied to the water supply and waste systems (sewage, drinking and rain water treatment systems), solid waste treatment and electrical system. Please refer to Article 5 of Executive Decree N° 29307-MP-J-MIVAH-S-MEIC-TUR, Regulations Governing the Approval of Plans for Construction Works Within the Shoreline Area.
8. APPROVAL OF CONSTRUCTION PLANS AND PERMITS.
8.1 INTRODUCTION.
The development of an architectural or engineering work modifies the natural or urban environment and affects third parties. Thus, the Government establishes regulations to prevent potential damages to third parties, as well as to minimize the impact caused to both public health and the environment. Compliance with these regulations is overseen by several institutions, as empowered by pertinent legislation.
In practice, public institutions have assumed this controlling responsibility through permits granted by way of official seals stamped on construction plans. These seals represent the applicant?s administrative authorization to proceed with the project proposed in the construction plans. In spite of the permits granted by the various public institutions involved, local municipalities are the entities ultimately responsible for granting a construction permit.
Following is a summary of institutional powers and legislation on the subject:
The Organic Law of the Professional Association of Engineers and Architects Nº 3454 and its pertinent amendments, establishes the Professional Association as the Government?s advisory body on subjects of its competence. The law does also expressly mandate the Association to safeguard the highest level of propriety in the exercise of the profession, regulate their exercise and ensure compliance with the laws, regulations and other special codes issued by said Association.
By constitutional mandate1, the municipalities are responsible for the administration of the local interests and services of the community under their jurisdiction. The Constitutional Court has understood that these administrative powers include full authority regarding urban planning matters, to complement the dispositions set forth in Urban Planning Law N° 4240 and pertinent amendments (Article 15), and the Construction Law N° 833 and pertinent amendments (Article 1)2. Said legislation establishes the following municipal responsibilities regarding urban-related matters: ensuring that "the public thoroughfares of their cities and towns meet adequate safety, sanitation, comfort and attractive conditions"; as well as local planning. In accordance with Articles 10, 57 and 70 of the Urban Planning Law, the municipalities are responsible for granting construction permits and collecting the 1% property tax imposed on the value of constructions and residential developments carried out in their jurisdiction.
Through Public Health Law N° 5395 and pertinent amendments (Articles 287, 309, 312, 322 and 323, among others) the Ministry of Public Health is empowered to issue and ensure compliance with existing regulations to ascertain that construction projects meet with minimum conditions in regards to sanitation, safety and well-being acceptable to tenants and neighbors.
The Urban Planning Law confers to the Urban Development Department3 of the National Housing and Urban Planning Institute (INVU), control over all national interest bearing regulations (planning and urban development)4. Additionally, the responsibility of "inspecting and approving the plans related to urban or residential development projects, prior to municipal approval."
The Costa Rican Shoreline Area Law (N° 6043 and pertinent amendments) empowers the Costa Rican Tourism Institute (ICT) to supervise tourist-related development projects (plans and constructions) within said zone.
8.1.1General requirements for construction p