When you buy land in Costa Rica
Do your due diligence before you buy land in Costa Rica. The American European Real Estate Group has hundreds of clients every year who buy land in Costa Rica. They are the reason for this blog, because they make mistakes.
No matter where that land is located, on a main road, on a country road or on a city road. Eventually you will want to build a new home or other type of buildings. You will need power and water as well as building permits.
Before you purchase a building lot in Costa Rica, you need to know a few facts before you commit. Let us assist with it. You might think you are safe when purchasing a lot in a subdivision or from a developer, please read on.
Don’t buy land in Costa Rica on sheer promises, buy land based on facts. I’ve worked with real estate agents and real estate developers who promise:
- The city will pave this road this year
- The water company is putting in a new waterline in next year
- The developer will do all the utilities underground
And because of these sales pitches that I hear from real estate agents and onsite sales people, you need to read this blog before you buy land in Costa Rica.
Survey of the property
We ALWAYS recommend you use a surveyor before you close on the Costa Rica land purchase. Typically, in the option to purchase – sale agreement, you stipulate that you will re-survey the property before closing, to confirm boundaries and size.
Especially when no one lives on the property, it is very well possible that sometime in the past, any of the neighbors moved the fence and nature has covered all proof. It is also possible that the city has widened the road and the survey was not re-done, so there is less land than the survey shows.
If there is a river on the property, before purchase, the seller should get the setbacks from the river from INVU. Depending on the importance and the size of the river, the setbacks can be anywhere between 10 meters and 40 meters. You are not allowed to build on these setbacks, which will change the value of the property. When the surveyor re-surveys, he can stake out the setbacks for you.
The survey, plot map or plano catastrado
Once you have found the right property and before you buy land in Costa Rica, make sure that plano catastrado of the land or building lot carries the “visado” from the municipality. A “visado” means that the city will allow you to build on this land if you fill all the requirements.
The size of the property in the survey and the size registered in the National Register HAS to be the same. If not, your attorney needs to adjust the sizes. But first, you need to know what the real size is, see re-survey.
Check if the municipality where the Costa Rica land is located has a zoning plan. What building restrictions does the zoning carry? The zoning will tell you the density and some other information that can be important to your building plans. Some municipalities use the GAM for zoning. Your real estate agent should be able to help you on the zoning. If not, you need to look for another real estate agent.
Attorney’s due diligence
Ask your real estate attorney to do due diligence first. When he/she writes up the option to purchase – sale agreement, to do a title search of the property. Your American European Real Estate agent should already have done a title search when listing the property. And should do it again when writing up the offer to purchase.
By pulling a study of the National Registry, the attorney can see what restriction there are. As well as what easements and what liens and annotations the property might have. He will also see if there is any protected area on the property.
Normally in Costa Rica there is a main water line under the road going in front of the property, without having a “paja” or meter. Most main water lines are 2” pvc pipes but sometimes they are only 1”. When this is the case, we say there is water on the property. The new proprietor can go to A y A (the water company Acuaductos y Acantarillados) and ask for a water meter. Once installed, you are ready to start construction. I have never seen a Costa Rica property without constructions that has a water meter on it.
When you install the water on your property, you need to use 1/2“ pipes. Or if the dwelling is a long distance from the meter, you need to install ½ to ¾” reducer after the meter to increase the size of the tube to the dwelling.
In another blog, I will tell you what you need to do to get your water hooked up.
Costa Rica has above ground power. So when you are ready to build, you get your electrician to set up the power lines (copper or aluminum, however you prefer it) on the property. Then your request CNFL (Compañia de Fuerza y Luz) to connect you. They will send a truck with 20 people. Then one will inspect your power installation while the other 19 watch the inspection. Then each of the other 19 will do something to hook you up. In another blog I will tell you what you need to do to get your power hooked up.
If you buy land in Costa Rica that is commercial land or industrial use and you have heavy machinery, check the available power before you purchase the land.
Real Estate Development
Promises are easy to make. If you buy land in Costa Rica that is a building lot in a Costa Rican real estate development, make sure your money stays in escrow. Do not close until the developer can deliver clear title and with utilities connected at the entrance of your building lot.
So when you buy a building lot inside or outside a development, you will only have direct access to power and water. But you will need to install everything inside your property and the service companies will connect you.
We hope this blog will help you decide to use the right real estate agent in Costa Rica. Even when you purchase property from a Costa Rica developer.
The technical information on the water pipes for this article, was given by home inspector Tom Rosenberger.
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