PROPERTY INFORMATION AND SERVICES
Any rental agreement of 3 years or less is assumed to be for three years, during which time the landlord may not raise the rent if it is in dollars, or as specified in the contract if in colons. Lease contracts are honoured by the courts provided they are drawn according to the law of rentals. Landlords may not evict tenants for other than non-payment of rent or illegal activities. Eviction processes, as with all court cases in Costa Rica, can take a long time.
Property prices vary from area to area. There is a computerized central registry system similar to North America. Lawyers or others, such as Casa Canada, who subscribe to the service can search a title from their office computers. Foreign residents and non-residents have the same property ownership rights as citizens, with the exception of leasing waterfront property from the municipality and purchasing land close to the frontiers.
Registration, taxes and legal fees will be approximately 5.5% of the declared value of the land on purchase. All ownership of land for both Costa Ricans and foreigners is protected by the constitution. Construction is less costly than usually found in North America due to lower labour costs. The contractor is responsible for defects in construction for 5 years.
Development is planned to a large extent, although in some of the country private land can be used as the owner wishes. Subdivisions must meet government standards, including paved roads, power, water and park land and they must be maintained by the developer for several years after being sold out. Free zones and industrial areas are well-defined, and government policy has been to encourage business to take job providing factories to the villages to allow people to travel short distances to work and to slow the spread of large cities. All construction must meet strict earthquake standards.
The first 50 meters above high tide is public property. It is illegal to build any permanent fixture, including cement furniture or tables. The next 150 meters in most of the country is owned by the municipality, and it can not be sold, however it can be leased on a long-term lease for approved projects. Casa Canada staff can help you with the legalities required for the use of this type of property.
Be cautious in the purchase of land from inheritors or from parties to a divorce settlement. Parties to the estate or relatives of the deceased and former spouses have 10 years to contest the ruling that gave title to the current owner.
Generally on the sale of a property, legal and registration costs are split between the buyer and seller, however a different agreement can be specified in the purchase agreement. If a buyer pays cash, he gets to choose the lawyer. If the seller carries financing the seller can choose the lawyer.
The Casa Canada Group has been involved in the management of residential and commercial real estate properties for clients since 1992, and will manage any type of real estate property which a client, resident of Costa Rica or not, owns. Some types of real estate where we have the experience and resources to manage are as follows.
- Residential houses, holiday cabins or homes.
- Commercial office buildings.
- Shopping centers or commercial shops.
- Raw land held for future sale or development.
A client can invest in real estate in Costa Rica with confidence that the property will be looked after in their absence. This avoids theft or the loss of the right to use the property to squatters, and includes weekly studies of the central registry to ensure no fraudulent claims have been filed against the property.
Interested buyers can purchase foreclosed properties at below market value through Casa Canada.
A client may instruct Casa Canada to sell a property being managed. A qualified buyer will be located, a sale negotiated to the satisfaction of the client, the transfer of the property overseen and payment credited to the client’s account.
ADVICE AND CONSULTATION ON PROSPECTIVE REAL ESTATE PURCHASES WITH EXPERTS AT CASA CANADA IS FREE WITH NO OBLIGATION
Casa Canada Services for Assisting with Property Acquisition
Assistance in negotiating the purchase of property
Ensuring the property title is clear
Ensuring that the vendor is legally authorized to sell the property.
Arranging the legal agreement for purchase and sale.
Ensuring the title to the property is correctly registered after sale.
Ensuring municipal taxes are paid, and there are no outstanding problems with construction, title or zoning infractions.
Assisting with suitable financing for the purchase if required
Arrange title insurance should this be desired.
Arrange insurance on construction on the property and ensure it is kept current.
NOTE: Liability insurance is not often purchased on Costa Rican properties, as claims are not usually recognized by the courts.
Administration of Rental Properties
For rental properties Casa Canada will locate tenants by advertising and through trusted real estate agents.
- References will be requested and checked.
- A credit check on the prospective tenant will be done through the principal credit bureaus in Costa Rica, to which our computers are connected.
- Terms and conditions of a rental agreement will be negotiated with the prospective tenant, including rent, length of rental, rent increases and deposits.
- All details of the proposed rental agreement will be forwarded to the client for approval.
- Once the rental agreement has been approved, the last month’s rent will be collected, plus a damage deposit if required.
- Once the client accepts the rental agreement in writing, Casa Canada management will execute it on behalf of the client and forward a copy of the executed document.
- Monthly rentals will be collected and deposited to the client’s account.
- Pay regular bills such as light, water, telephone, cable TV and municipal services and collect the costs from the tenant.
- Ensure the tenant performs maintenance required as per the rental agreement
- Where the client is not paying rent, the tenant will be notified and options for action discussed.
- Where legal action for eviction is decided upon Casa Canada will hire lawyers and oversee the legal process.
- Have the property cleaned and repaired as required before leasing to a new tenant.
For all properties the following services will be provided.
Arrange for any maintenance work which is the responsibility of the owner, and pay the contractor after the work is inspected to ensure it is satisfactory.
Where maintenance costs are over an amount agreed to by the owner, quotations will be received for necessary work and discussed with the owner prior to approving the work.
Pay regular bills such as light, water, telephone and quarterly property taxes
Check the property periodically to ensure it is well looked after
Hire and pay guards or other employees as required
Keep payroll records, and ensure all payroll regulations are met, such as the provision of compulsory medical insurance, annual bonus, accident insurance, holiday pay and separation pay where employees are required.
Ensure squatters do not locate on a property in administration
Keep financial records of all transactions and supply statements as required by the client.
Casa Canada will also check title to the property each week to ensure no fraudulent claims are filed against it.
ASSISTANCE WITH SALE OF PROPERTY
Arrange any pre-sale maintenance which may be required
Advertise property for sale
Place “for sale” signs on the property
Negotiate with prospective purchasers, presenting all offers
Do due diligence checks on purchasers where the owner wants to carry a mortgage on the property.
Draw purchase agreements and accept deposits on offers
Oversee the payment for the property and ensure funds are forwarded to the owner.
Should a buyer choose to carry financing, Casa Canada has professional mortgage administration ensure payments are made on time and interest is charged correctly.