Legally speaking, the first step in any purchase process is to
identify the property to be acquired.
Registration Report
For registration purposes, a study must be carried out in the
National Registry. This report will include the property’s
characteristics:
a. Natural environment
b. Location (district, canton and province)
c. Limits
d. Size
e. Survey map number
f. Details of registered owner
g. Approximate value
h. Payment
method
i. Registration date
j. Annotations
k. Liens (easements, mortgages, etc.)
Based on the above, we can determine different situations and be
clear about the limits, limitations and conditions to which the
property is submitted.
1. Possible situations
1. a. Property that is not submitted to any particular
regime of the Legal Code; it may be an urban or rural area within
the national territory.
1. b. Property that is submitted to the
condominium property regime; it can be in a rural or urban area, but
follows the requirements and conditions established in the
Condominium Property Law and the Condominium’s Regulations.
1.c. Property given by the State through
concession. This type of private concession is especially
important, because it follows the parameters established by the
Legal Code. Law No. 6043 of the Marine Coastal Zone Law
establishes in Article 9: “The Marine Coastal Zone is the two
hundred meters of beach frontage bordering the Atlantic and Pacific
coasts of the Republic regardless of its origin, and measured
horizontally from the line of mean high tide and the surface and
rocks that are visible at low tide. For all legal effects, the
Marine Coastal Zone includes the islands, islets and coastal crags,
as well as the land and natural formations above sea level within
the territorial waters of the Republic. Cocos Island, which
will be under the direct ownership and possession of the State, and
the islands whose ownership or administration are established in the
present law or special laws, are exceptions.”
Article 15: “The owners of properties
bordering the Marine Coastal Zone may ask for the incorporation of
their properties to the planning process carried out in this
zone. They will pay for it and transfer gratuitously to the
State the areas needed for public use. The planning and use of
those lands for edifications and installations must comply with the
norms established by the Instituto Nacional de Vivienda y
Urbanismo (National Institute of Housing and Urban Planning)
and the ICT before they are approved by the respective
municipality.”
In this case, the following stipulations must be considered
if the purchaser is a foreigner. Article 47: “No
concessions will be given to:
a) Foreigners who
have lived in the county for less than 5 years;
b) Corporations
with bearer stocks;
c) Companies or entities in other countries;
d) Entities
founded in the country by foreigners;
e) Entities with
more than 50% of their shares, quotas or capital belonging to
foreigners
Those entities that may have been given concessions
will not be able to assign or transfer shares or quotas to
foreigners and neither will their partners. Anyhow, a transfer
made against this disposition will be null.”
2. Regulating Plan
The first article in Urban Planning Law No. 4240
establishes the following: “…a Regulating Plan is a local
planning document consisting of a group of plans, maps, regulations
and any other document, graph or supplement, the development policy
and the plans for the population’s distribution, land use, roads,
public services, common facilities and the construction,
conservation and rehabilitation of urban areas…”
Article 16 – “According to the objectives set forth by
the different government institutions and the State’s
administration, the local regulating plan will include, without
being limited by them, the following elements:
a) development
policy, including the principles and norms on which it is based, as
well as the objectives establishing the needs and growth of the
specific area;
b) a study of the
population, which will include projections of the future demographic
growth, its recommended distribution and norms regarding
density;
c) land use
showing the location and distribution of lands in regards to
housing, commerce, industry, education, recreation, public and any
other pertinent use;
d) a circulation
study showing in general the location of the main public
thoroughfares and of transportation routes and
terminals;
e) communal
services, to indicate the location and size of the areas required
for schools, parks, playgrounds, health units, hospitals, libraries,
museums, public markets and such;
f) public services, including a general analysis
and location of the main systems and installations of pipes,
sanitary sewage and pluvial systems, trash collection and disposal,
and such; and
g) housing and
urban renovation showing the needs and objectives in regards to
housing and reference to the areas that must be subjected to
rehabilitation and remodelling.”
These regulating plans are still not yet approved in all
the cantons. Nonetheless, in those where they are, the acquirer
must consult the respective municipality, considering the location,
use and size of the property.
3. Survey Map
In order to individualize the location of the property to
be acquired, there must be a simple or certified copy of the survey
map issued by the National Cadastre Office. In this sense, Law
No. 6545 of the National Cadastre Law establishes in Article 10: “The cadastral certification is the document issued by the
Cadastre Office, declaring that the cadastral map has been properly
registered in the respective office, and indicating whether the
place in which the property is located is a cadastral or cadastered
zone. In the second case, the certification may be a
reproduction of the cadastral record.”
In addition, the number of the property’s cadastral map
must be submitted to register the purchase.
4. History of the property
Information about the property’s owners, liens and other
annotations of the past ten years can be obtained through a study
carried out in the National Registry. This revision will
provide a record of the property that may help with future
procedures, such as correcting the measurements, knowing about
previous uses, as well as types of owners and others details.
5. Common services and amenities
The property’s location reflects the type of public
services provided in that particular geographical zone and which
therefore give or take away added value from the land. When
these services are evident, the purchaser must ask for the following
from the respective institutions:
a. Instituto Costarricense de Electricidad (Costa Rican Institute of Electricity): installation of public
phones and availability of telephone lines.
b. Instituto Costarricense de Acueductos y
Alcantarillados (Costa Rican Institute of Aqueducts and
Sewerage): drinking water and sewerage in case it is in charge of
these services; if not, the name of the company or municipality
responsible for providing these services.
c. Compañía Nacional de Fuerza y Luz (National
Electricity Company): Public lighting and electric wiring.
d. Respective municipality: days when garbage is
collected, amount to pay for municipal rates and property taxes,
information about any regulating plan, limits and limitations of the
property to be acquired and a certificate indicating that the seller
is current with his tax and rate payments.
e. Ministerio de Ambiente y
Energía–MINAE (Ministry of Environment and
Energy): Whenever necessary, and depending on the property’s
location, he must ask for the environmental requirements, if any,
and if an environmental-impact study must be carried out.
6. Documents The Seller Must
Provide
Even when the previous information can be requested from
the corresponding institutions, the seller must provide the
following information:
a. Certification from the respective Municipality of
being current with the payment of municipal taxes and rates and
property taxes.
b. Last
receipt of the payment of municipal taxes and rates and property
taxes.
c. Certification from the Municipality, water company in
charge or the Instituto Costarricense de Acueductos y
Alcantarillados indicating that the property is current
with the payment of water and sewage services.
d. Last
receipt for the payment of telephone services.
e. Certification from the Municipality, or company in
charge or the Compañía Nacional de Fuerza y Luz (National Electricity Company) indicating that the property is
current with the payment of public lighting and electrical
services.
f. Last receipt for payment of telephone services, when
required.
7. Access
Construction Law No. 833 establishes the following in
Article 4:
“Public thoroughfare is regarded as the entire area of
public domain and common use. Through disposition
of an administrative authority, it will be used for free transit
following the planning laws and regulations. As a matter of
fact, it is already destined for public use.
Depending on the type, public thoroughfares will also be
used to ensure the aeration and illumination of the nearby
buildings; facilitate the access to adjacent properties; the
installation of any channel, artifact or accessory belonging to
public works or meant for public service.”
Considering the above, it is important, though not
necessary, to ask for a report on future projections of the roads
and highway, as well as their regulations, bridle paths and other
communal facilities from the Ministerio de Obras Públicas y
Transportes – MOPT (Ministry of Public Works and
Transportation) and the local Municipality. This measure is
important because future constructions may affect the property
directly, or may well increase the added value.
8. Construction and Appraisal of the
Land
When the property acquired has a building, the following
aspects must be studied and considered:
Electric distribution
Earthquake-proof construction
Construction’s durability
Structure (beams, columns, walls, etc.)
Finishes
Total area
Green areas
Appraisal: the previous characteristics must be appraised,
as well as the zone’s unitary value (value in square meters, added
value, construction’s total area)
The following nomenclature is used:
a) V.R.:
current reposition value (R.V.)
b) D.A.:
current accumulated depreciation (A.D.)
c) V.D.:
current depreciated value (D.V.)
9. The Registered Owner
To determine the possible advantages through the
acquisition of a property from a person or legal entity, the
following aspects must be analyzed:
9.a. Property belonging to a legal entity: If the
property belongs to a corporation, it may be possible to acquire
shares from that company; which would imply the acquisition of the
company’s assets, including the property to be acquired.
The problem arises with liabilities, because there may be
unrecorded debts that can affect the acquirers. Therefore, one
must ask for a certification from an authorized public accountant,
indicating the company’s balance report; an indispensable aspect in
order to know if it is safe to acquire the shares representing the
nominal capital or not.
9. b. Property belonging to an individual: In case the
property is under the name of an individual, it must be acquired
following the normal process established for this instance. A
notary public must be contacted to pay for seals, transfer costs,
fees and duly sign the deed. This formalization or “closing” is
the stage in which any negotiation process ends.
