You are visiting COCORI Complete Costa Rica

Own A Piece of the Beach
by Barbara Adams and Michael L. Smith

  1. Introduction
  2. That Tropical Appeal
  3. Rules to Live By
  4. In Search Of . . .
  5. Investment Help


From Shakespeare's The Tempest to Defoe's Robinson Crusoe to Hollywood's Fantasy Island, our culture has romanticized the desert island as the ultimate escape. Islands tend to be uninhabited, undeveloped, and unbelievably beautiful in our collective imagination. The setting draws us like a Siren and the overpowering desire to own one can become the ultimate wish.

Picture yourself lounging in a hammock slung between coconut palms. The surf booms and hisses, tropical flora perfume the air and off-shore breezes waft over you. If you try hard enough, you can almost believe the fantasy of owning your very own island could someday, somehow, become a reality.

Sounds like your average end-of-the-workday dream, you say? Welcome to Costa Rica where your island dream has a greater than average shot at reality.

The good news is that anyone can buy property in Costa Rica. Costa Rican laws and Constitution protect private ownership of land, and foreigners enjoy the same rights as citizens. There are almost no restrictions to ownership of private land--neither citizenship nor residence, or even presence in the country, is required for land ownership.

The bad news is that, although you can buy beach front property on the mainland, you can't buy an island in the territorial waters of Costa Rica. But, with enough patience, time, and attention to detail, you can lease one for up to twenty years! These renewable leases, called concesiones by the Costa Rican Tourist Board (ICT), are more available, and the annual fee cheaper, than one might imagine.


That Tropical Appeal

With their first glance, most tourists to Costa Rica fall deeply in love with the country in general, and those miles of pristine beaches, in particular. They vow to come back somehow, someday, and grab a slice of Paradise Pie for themselves.

But there is much to fathom before the feast. The questions are multiple choice: Do you want the Pacific or the Atlantic coast? Are you dealing with a private owner, developer or real estate company? Will you be buying a 50-meter or 200-meter title? Will you try to concession from the government that no man's land in the 150-meter zone? Are you purchasing the property for development or for private use?

Then come the tougher questions: Are you prepared to put in your own road to access the property? How about your own electricity? Or can you wait, possibly years, for the government to do it? Have you budgeted to drill for fresh water? It's quite possible, you see, that your piece of paradise is not linked to the municipal water system (if there is a municipality near your site), or by SNA, the national water system.

Beaches line two of Costa Rica's four borders. Sand color ranges from silty black volcanic ash, through many shades of gray and subtle hues of golden brown, to pink and nearly-pure white. Beach texture varies from fine powder to pebbles and shells. Water quality also ranges from murky, if near a river mouth (especially in the rainy season), to so clear you can see a coin tipple to the sand twenty-five feet below the water's surface.

Fishing both coasts is phenomenal by all accounts, and waves at many beaches rank right up there with some of the great surf spots of the globe.

Accessibility, however, remains a problem. Many beaches require a four-wheel drive vehicle to reach them, especially in the "green season" when certain roads wash out.


Rules To Live By

Among the many wonderful things guaranteed by Costa Rica's democracy is the public's right to the use of all beaches, whether coastal or island. Specifically, the first fifty meters above the median high-tide line has always been off-limits to private ownership. Concession rights begin above that 50-meter line.

Outright purchase of coastal land in Costa Rica means you're buying either a 50-meter title, registered by 1972, or a 200-meter title. Property between those two demarcation lines can be concessioned, or leased, but not owned outright. If you choose to concession, you are paying the government for the right to use the land. If the land was previously concessioned, you will have to buy the concession from the owner for his price, then pay the yearly lease fee to the government.

Since passage of the 1977 Maritime Terrestrial Zone Law #6043, two very important factors in the process of leasing islands have changed: leases now run for a maximum of 20 years instead of 99, and the concession must be approved by Costa Rica's Legislative Assembly.

Some other points in the 1977 Law include:

Foreigners applying for concession rights to coastal or island property must have lived in Costa Rica for five years prior to applying.

If the concessionaire is a company, at least 50% of its shares or capitalization must be owned by Costa Rican citizens.

Two thousand square meters is the limit on an island concession for private use. If you want more than that, you must apply for an additional lease.

The most extensive and expensive step in the process is the Plan Regulador (Regulating Plan), which covers every conceivable detail about the property under consideration. This can be undertaken by the government at a lower cost, but a slower pace, than a private Regulating Plan contractor.

The Regulating Plan will determine what use your land can be put to: tourism, agricultural, residential, commercial, reserve. Each category has its own sub-set of requirements.

No matter what the property is used for, it will be inspected by a government agency every five years to confirm compliance with the contract made between you and the government. If you have broken the contract on any point, the lease can, and probably will, be revoked immediately.

After meeting all legal requirements, access to maritime property is equal--it is first come, first served.

If you get sick of surf, sun, sand, and sea, you can sell your concession for the remaining balance of the 20 years. The price is set by you.

Expect the process to take at least six months. However, a year to eighteen months is more realistic. These legal issues are time- and patience-consuming, though a relative bargain, economically. A good attorney is a must.

Costa Rica is a marvelous place to wait out the process. Once the concession is granted, the land is yours for the duration. You can rest assured that as long as you remain faithful to the contract, Costa Rica's democratic government will keep its part of the bargain. So . . . relax and enjoy your tropical island paradise!


In Search Of . . .

Doing it alone is slow, tedious and can be risky; so why bother? There is a well-organized infrastructure in place in Costa Rica to help you through the mountains of paperwork and potential pitfalls of investing in property in Costa Rica. Whether you just want a place to retire and live the good life or are buying for investment and development of a project, you will find it worth the effort to seek professional help.

The best way to buy property is with a real estate agent. You will be relieved to learn that it is relatively easy to find a good agent to help you find that perfect property. Two organizations can aid you: the Costa Rican Chamber of Real Estate Brokers (Cámara Costarricense de Corredores de Bienes Raices--CCCBR) and the National Association of Real Estate Brokers (Asociación Nacional de Corredores de Bienes Raices--ANCBR). Although the CCCBR is bigger and more widely recognized, members of both these groups are fully-licensed brokers. Licensing, by the way, is done by the government's Ministry of Economy, Industry, and Commerce (MEIC).

By going to one of these associations you will be assured of successfully completing the first important step to a successful purchase: the use of a licensed broker. The next step is to make sure the agent you select specializes in the type of property you are looking for. The chambers can help you there, but be sure to ask around. Find someone who has bought similar properties. Ask them who they used and how they fared.

These are the property experts, but how to find that ideal site? Do your homework. Jorge Fallas of Prime Real Estate & Investments has been selling beachfront and lakefront property in Costa Rica for many years. He has made a science of researching coastal land in Guanacaste. Thorough familiarity with the area, Fallas said, enables him to listen to a client's needs and pinpoint a beach that will satisfy those specific requirements.

Fallas has developed a method for researching property in Costa Rica, which, he says, is essential before making any hard choices, or even before seeking out a real estate agent or developer.

"First," he said, "rent a four-wheel drive vehicle, and buy the 1:200,000- and 1:50,000-scale cartographic maps for the area you are interested in. You can find them in Lehmann's and many other bookstores. These maps show all roads, rivers, topography, trails, airports, everything. Take a week and drive the roads. Try a plane trip. In half a day you can cover the whole coast. You'll know the color of the sand, the vegetation, which areas are cleared, which have forests, the shape of the bays. It takes 45 minutes from San José to Guanacaste, 45 minutes down the coast, and 45 minutes back to San José. But don't try to learn the whole Guanacaste coast in a day."

Fallas's bush mentality may derive from the fact that 70% of his properties are "raw." That's real estate lingo for rough-road accessible, no water, no electricity, no phone lines. He does however, have lots in development with all the comforts of home. "But of course, they are priced higher."

When you have found that ideal property, be sure to hang around and make sure it stays suitable as the day progresses. This is especially true of beach-front zones. What looks like a fantastic, wide expanse of beach now may totally disappear when the tide comes in. That may or may not be important to you, but better to find out now than later. Also, the season can make a difference in the way the property appears and feels. Ask the owner, ask neighbors, and ask your knowledgeable broker: How is it different in . . . ?

If you will be buying raw property, a broker is extremely important. He can help you stay out of trouble and hidden traps in the purchasing and developing steps. The owners of property are interested in selling, but may not always know if their property is suitable, physically and legally, for your intended purposes.

You needn't worry too much about missing that perfect property by using an agent. Actually, you have a much better chance of finding it if you take advantage of the network of licensed brokers. There are three basic ways of listing property in Costa Rica. The open listing is where the owner asks a few brokers to sell his property. He will work with any of them directly, but also reserves the right to sell it himself. A closed listing is where the owner will typically work through only two or three brokers, and still reserves the right to sell it himself. The most restrictive is the exclusive listing in which the owner works through only one agent. These categories pertain to the relationship of owner and broker. Any property listed in any category is available from any broker, in most cases. In the more restrictive agreements the single broker acts as liaison between owner and buyer or buyer's broker.

You can also go property shopping by video. Prime starts their video in San José so you can see exactly how the journey to your hideaway will be. Many of the choice spots are choice because of "limited access"--anything from gravel roads to muddy cow paths. You want to know accessibility to your paradise. The video continues by showing you the perimeter of the property and views from different angles and perspectives. Jorge Fallas likes this new method because it saves him and his client a lot of wasted time going to properties that aren't suitable for reasons of access or general features.

Perhaps the simplest way of all to ease into the tropical life is by buying into one of the many development projects in progress along Costa Rica's coasts. Currently, 40 to 50 projects exist in Guanacaste (in various stages of development; from paper to almost completed) where you can buy your slice of paradise and begin to enjoy yourself with a minimum of hassle. Beach front villas, condominiums, townhouses and custom residences are all available. The trend in these developments is to provide an infrastructure similar to a resort. Many of them will be complete, self-contained communities when finished.

Many of today's buyers are purchasing for investment or for their future retirement. Developers are aware of this strategy and offer complete management services for their properties. All you need to do is tell them when you want to use your villa and they will see to it that when you aren't there your investment will be maintained, protected, and rented out as much as possible, in accordance with your wishes. This worry-free investment tactic is a great plan for retirement that is useable now.


Investment Help

We have been talking primarily about beachfront property for individuals, but the same options and cautions hold true for the investment buyer planning a big tourist, industrial or agricultural project. In fact, if that is your plan, you have a couple of excellent alternatives.

Two very important entities are in place solely to help foreigners invest in Costa Rican real estate. CINDE and PROCOMER both provide information packages, information on current laws, referrals to brokers and lawyers, and help with paperwork in the development of your project. They are liaisons with the government so what they tell you is the most current and accurate information available. They also follow you through the development of your project. Perhaps the best part of their services is that they are free. Their broker listings have been compiled through experience. If you are investing in a commercial project in Costa Rica, your first stop should definitely be one of these two organizations. Both are storehouses of information and help.

Another important point of advice: Don't buy anything based on paper. In Costa Rica, as in many places, this is a big risk. Costa Rica has been a target for fly-by-nighters, and vulnerable to the whims of changing laws and regulations. What looks good on paper and in drawings may be modified radically or not even completed. Wait for the finished product. If you want to check on a foreign developer, go to his embassy and ask for references. When considering a condominium, learn the rules and regulations governing the residents before signing up.

It is important to note that there are no escrow agents in Costa Rica. To safely put money in escrow, make sure that both the seller's and your lawyer maintain joint control of the account. Also, be aware that there is no title insurance in Costa Rica.

As you progress through the paperwork of your purchase or project be sure to get copies of everything in your language. When contracts are written, the safest way is in the form of a dual contract where the pages are split down the middle with Spanish on one side and your language on the other, clause by clause. Insist that the translation be done by an official legal translator. And when it comes time to sign the contracts, don't just sign the final sheet. Initial every page of every copy, and then sign on the dotted line.

With a little enjoyable homework and the help of a knowledgeable licensed broker, a real estate lawyer and organizations like CINDE and PROCOMER, your investment in Costa Rica will be a worry- and trouble-free beginning to your laid-back life in the tropics.

Copyright © 1995 Michael L. Smith & Barbara Adams. All rights reserved.