Costa Rica Real Estate Buyers Guide Part 2 – Property Ownership and Forms of Possession
Reposted By: Jesse Montgomery, from The Costa Rica News
Part 2 of the Costa Rica Real Estate Buyers Guide series looks at Costa Rica real estate ownership, types of ownership for land in Costa Rica, restrictions, living in Costa Rica.
Just like in the US, Canada, and Europe, there are different types of property available to buyers. Understanding the various types that are available for purchase is critical in the evaluation process. This section highlights the property types that can be purchased in Costa Rica and the implications of each type of ownership for the buyer.
Fee Simple: The most comprehensive form of property ownership in Costa Rica is Fee Simple Ownership. Fortunately for foreigners, the conditions for this type of ownership are the same for Costa Rican nationals as they are for foreigners. The concept of fee simple ownership is the same in Costa Rica as in the US. Basically fee simple ownership gives full titled ownership to use it, enjoy it, sell it, lease it, improve it, etc. Buyers who purchase fee simple title have the most rights under to law to enjoy and use the property as they see fit.
Concessions in the Maritime Zone: Concession property is more commonly known as beachfront property. In Costa Rica, 95% of beachfront property is considered concession property and is governed by the Maritime Zone Law and other specific regulations including but not limited to special dispositions stated by municipalities and the ICT (Costa Rican Institute of Tourism). These legal dispositions set forth the conditions under which foreigners and local residents can own concession property. A concession in Costa Rica is defined as the right to use and enjoy a specific property located on the maritime zone for a predetermined period of time. The state, through its respective municipality, grants this right. Note that the first 200 meters measured horizontally from the high tide line defines the boundary of the maritime zone. This zone also includes islands, pinnacles of rock, mangroves, estuaries, small islands and any small natural formation that overcome the level of the ocean. This 200 meter zone is divided into two areas:
• Public Area: The first 50 meters measured horizontally from the high tide line. This zone is not available for ownership of any kind. No kind of development is allowed except for constructions approved by governmental entities. Further, this area is deemed a public area and any individual wishing to utilize this area for enjoyment has the right to do so. In other words, there are no truly private beaches in the Maritime Zone.
• Restricted/Concession Area: The next 150 meters. This area I available for concessions to be granted. A concession is in essence a “lease” on the property granted to the lessee for a specific period of time. Normally the concession period is granted for 20 years. An owner of a concession may build on that concession, subdivide the concession and perform other acts to the property. However, appropriate permits from the local municipality must be obtained.
• Ownership Limitation: Unlike fee simple property, foreigners do not have the same rights as citizens when it comes to purchasing concession property. The law establishes that foreigners cannot be majority owners of a concession property. A foreigner can, however, enter into a partnership with a Costa Rican citizen where the ownership is divided 49% /51% between the foreigner has resided in Costa Rica for at least five years, then they may be majority owners of a concession. Both foreigners and Costa Ricans alike are required to purchase all Maritime Zone property through concession.
Properties in Condominium: When US citizen think of Condominiums, they normally think of large apartments or townhouses. In Costa Rica, however, there is a specific law called “Condominium Law” that provides certain benefits to developers of many different types of properties, Including single family residence projects, finished lot projects, condos, etc. This set of laws allows a developer to restrict and regulate certain aspects of the restrictions, limitations and privileges that can be enjoyed by individuals who purchase a property in such a development.
Ownership of property “in condominium” is fee simple ownership but usually carries with it a few additional restrictions set forth by the developer. It is advised that you require the owner of the property to give you a copy of the bylaws to check for architectural guidelines, land use restrictions, and other limitations that may be placed on your property.
Most often, developers use the condominium laws to allow them to build private roads in a development and set architectural guidelines. For the most part, condominium laws are designed to protect the integrity of a development and maintain the “look and feel” of the project.
Untitled Property: There are properties in Costa Rica that are not recorded at the Public Registry of Properties. Families have inhabited some properties of this type for generations while others have never been occupied. In either case, it is possible that someone claims that they “own” the property and may put it up for sale. They may even have fence lines or other boundary markers that separate “their” property from a neighbor’s. Regardless of the time that an inhabitant has lived on the property, if it is not registered at the Public Registry there is no official owner i.e. the title is unclear. It is strongly recommended that they type of property be avoided at all costs because there is no way to prove that the “owner” has the right to transfer the property, or what the dimensions of the property really are.
Time Share: This option allows an owner the right to use a property for certain weeks of the year. In most cases the time-share ownership grants similar rights as implied in the condominium regulation except that in the time-share it is limited to certain weeks during the year. In this manner one single unit is subdivided into parts and sold individually. Time-share resorts are not common in Costa Rica.