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Building in Costa Rica and What You Need to Know

Building in Costa Rica can be one of the most rewarding experiences. With its warm weather, beautiful landscapes, and welcoming locals, Costa Rica is a desirable location for those moving or retiring abroad. For many people, building a house in Costa Rica is a top priority. A customized home gives you certain comforts, which you may not be able to find in a prebuilt house. Or maybe you are looking to invest and create a dreamy rental property that will bring in extra income in the future. But where do you start when building a house in a foreign country like Costa Rica? What hurdles are there and how is the process different from what you may be used to? We will explain the process so that you have a clear picture of what to expect.

Property Research A good real-estate agent should know a lot about the property you are looking at and whether it is suitable to build on. At Fuga Home Design we do the homework for you before you get too far into the buying process. Construction can be held up for weeks, months, or even indefinitely if one of these elements is missing or needs further investigation.

Electricity Availability The most common source for electric power in Costa Rica is ICE (the government-owned electric company). You should make sure that the electrical wires pass very close to the property. Extending service to a new area can be quite expensive and time consuming.

Solar power is another possibility with so much sun in Costa Rica, but a big investment up front.

Water Source (Carte De Agua) This can be from a town source like the AyA or ASADA (public water companies/ associations in Costa Rica), or by concession (legal access to a spring). In the case of a concession, it is important that the property title mentions access to the water and specifies how many houses it can supply. For example, sometimes a spring is rated for only three homes, but the developer is selling five lots.

Internet Everyone needs Internet. Many areas have wired, cable Internet now. Some even have fiber optic. But if the property is far from a main road or in a rural area, Internet access may have to be through a cell-phone tower or satellite. It is best to find out what neighbors are using and what works best in the particular area you’re looking at.

Road Service Making sure you have access to the property is a must, especially if other properties sit between the one you are looking at and the main road. Make sure there is a legal right of way for you to access the land. You also have to consider do you want to be by a main road or are you okay with traveling on a dirt road that may have some serious terrain that may need a 4x4.

Property Limits (Usos del Suelo) Make sure that the property boundaries are detailed on a stamped plan and registered with the municipality. These plans may include setbacks from roads, rivers, or protected areas that you should know about. Then make sure they are correct by hiring a surveyor/

engineer. Do not take this for granted, but it is important to make sure that the lot you are buying can be used for the purposes you want. Check with the municipality to see if it is zoned for a residential building. If not, find out what the process is to get approval.

Concession In 1977, Costa Rica passed the Maritime Zone Law (Law 6043, la Ley sobre la Zona Marítimo-Terrestre), which defined the country’s maritime zone as the first 200 meters (about 660 feet) inland from high tide. Specifically:

  • Public Use Zone: The Public Zone (where new real estate cannot be built) occupies the first 50 meters (~165 feet) from ordinary high tide, as well as all areas exposed during low tide, including mangroves, estuaries, cliffs, rocky outcroppings, etc.)

  • Restricted Use Zone: The restricted zone occupies the coastline from 50-200 meters inland from ordinary high tide. Municipalities are responsible for their Restricted Use Zone, which they can concession out.

So, what does this mean? Essentially, after 1977, all Costa Rican oceanfront is public and land use is restricted for 200 meters / 660 feet inland from the high tide mark.

And what does that mean? Bottom line: Buying oceanfront and/or beachfront real estate is possible and commonplace, but you’ll want to understand titled vs. concession property in Costa Rica and how it applies to your purchase.

Title Search One of the most important things to make sure of is a clear title. Ensure that the person selling has paid all taxes and there are no disputes or liens. Fuga Home Designs has a in house legal team that will ensure your title is clear and ready for sell and transfer.

Significance of Attorney, Architect/Contractor While a real-estate professional should be able to give you a basic idea of the above list, it is important to hire an attorney early in the process. They will ensure that everything is

official in the government system and identify any potential issues early on. It is beneficial to bring in a contractor or architect to assess the site as well. This way, they can look at the property for things like water-runoff issues, flooding potential, slope stability, future machine access needed for building, etc.

Buying of the Land A lawyer is essential for this step. Not only will they be needed to take care of many of the purchasing requirements, but they also will be looking out for you, as your legal representative. Always get your own lawyer and don’t rely on the seller’s lawyer. Once you have decided on a property, the lawyer will help you draft an offer that’s in your best interest. They also will help review the final purchase agreement and do due diligence to make sure that the property meets the requirements above (title research, zoning, survey, free from liens, etc.). The lawyer can further guide you on creating a corporation for the property (if desired), and help you open local bank accounts so that you can transfer the purchase money and pay for utilities, permits, and taxes. They also will help with the required paperwork involved in sending a large sum of money into Costa Rica.

The Construction Process Once you own the land, the fun part of designing and building your home begins. The first step is to assemble your team. You will need both a contractor and an architect/engineer. Real-estate professionals may have recommendations, but it’s important to do research on several different options and go with the ones you feel the most comfortable with. It’s also important to note that many contractors have certain architects they work with often, and vice-versa. So if you find a contractor that you like, they may be able to introduce you to a reputable architect/engineer. The role of the architect is to make the design and blueprints. They are also responsible for the project as a whole and will come to the job- site weekly and/or during important phases of construction to make sure things are being built as specified. Engineers also can do this but typically don’t do as much design work. An architect, on the other hand, is an engineer but with the next level of degree/license.

Drawing/Design Phase In the design phase, it is very common for clients to have their own design in mind or at least some ideas for what they like. They then sit down with the contractor or architect (or both) to discuss the options as a whole. “This is where it is important that you hire the right people, because you will likely talk about the budget for the entire project and what is realistic.” When checking references, previous clients should be happy with the overall finish. If past customers think that shortcuts were made, it’s a big red flag! Along with the layout of the home, the design phase also will specify the general building materials (block, stucco, wood, steel, etc.) and costs per square meter. Once the budget, general materials, and design ideas are shared, the design process will go through a series of steps:

Design of 3D The architect will take the design ideas and work up a 3D proposal to show you. The 3D model will give you a very good idea of how the home will look when finished.

Creation of Blueprints With the 3D model edited and approved, it is now time to prepare the blueprints. To do this, the client and contractor must specify the finish materials. It is in everyone’s best interest to put as many details on the blueprints as possible. For example, floors will be concrete with porcelain tile on top. The bathroom shower will have high quality porcelain tiles that go from floor level, up two meters. The shower doors will be glass, going up 2.5 meters. And things like that. The contractor will be there to guide the client on typical costs. Once the blueprints are complete, they will be sent to the College of Engineers in San Jose for approval. Once approved, a small percent of changes is okay, but no major changes, especially structural. With the stamped blueprints, you can apply for the building permit with your municipality.

Proposal & Contract With blueprints in hand, now the contractor can give you the final price to build. The contractor will work with the original budget and blueprints to specify the materials and labor costs on a proposal. The proposal and contract should be very detailed so that there are no major questions later from either side.” And that, “it should include everything you want and everything that was agreed on in the design.” While some changes to the contract later on are fine, having it all in writing from the start will protect both the client and the contractor. For example, the contractor might specify that he is planning to spend $25/sq. meter on tile. That price should allow him to purchase a high quality tile that you pick out, but if for some reason, you find one at a higher price that you like better, you can pay separately for the upgrade.

Build Phase After the contract is signed and a deposit is made, it’s time to build!This will be the fun part, as you will get to see each step of the process and eventually the final product. Be prepared, though, as the building process can be notoriously lengthy in Costa Rica. A custom home may take 7-12 months from start to finish, or even longer, depending on the size, complexity and weather conditions. Building a house abroad in a country like Costa Rica can seem daunting at first, but we hope this post gets you started. With the right team of people and a little patience, your dreams can become a reality.

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