Costa Rica Beach Properties – What Problems?

First of all, my experience tells me foreigners must remember that the Costa Rican system of law is not ‘Common Law’. We inherited it from Spain, who, as all the rest of the European mainland countries received the ‘Roman system of Law’.

It is important to state that in the Roman Law, the main division of the legal system is the one of Private Law, that rules all related to private citizens, and Public Law, that rules all related to the actions of the government, or public matters.

Regarding Private Law, citizens can do everything they want, except what it is prohibited by law. On Public Law, it is the opposite, the State can do only what it is authorized by law.

One of the most common mistakes made by North Americans doing business in Costa Rica, is that they forget they are not in their country, and believe they can conduct business just the way they do ‘back home.’

Things are done differently in Costa Rica.

There are two main legal regimes. One is the normal or standard, applicable to all land in the country, the other one is an exemption to that: the beach front property.

Normal Real Estate (NRE) can be bought or sold by anybody, it relates to any piece of land in the country.

Beach Front (BF) belongs to the people of Costa Rica. It can not be bought or sold, the State is the administrator of it. This strip of land, is only 200 meters as of the high tide average mark into mainland. It can only be given in concession.

• NRE falls into the Private Law and BF is within the boundaries of the Public Law.
• NRE is registrable land, meaning all relevant information is on public record, either on the microfilmed archives at the national registry building (one for all the country), or online. Ownership, encumbrances, mortgages, pending transfers or court orders, appears there, updated by the hour, and makes full evidence in court.
• BF is not registrable (at least not right away but that story is for another day). The only records available on BF property are held by each individual City, normally in a very antiquated system.
• Up to date records are not always available and since many of these areas don’t even have computers, you certainly can’t do anything online. This makes a personal visit to that particular City a must, before you even think about making a serious offer.
• NRE gives the owner full rights to do whatever he wants with his land. The State can not interfere with his ownership unless the law authorizes it, like in the case of wildlife, or water springs or the like.
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• BF only gives the owner a possession right, never full ownership. The State, through the City, grants the possessor the right to be on the land, (concession) but this limited rights are subject to State supervision, control, and mainly, revocation at any time, (prior to revocation a full economic compensation must be paid to the individual).
• NRE allows the owner to build on his land without other limitations than those of city planning, etc.
• BF only allows construction under restricted terms, according to the policies of the City.
• NRE does not require any particular regulatory use plan.
• BF requires the neighbors and the City to come together to set up a Regulatory Use Plan for that particular beach. That plan will work almost as a particular law for that area. It will be enough to mention that there are very few of those plans approved in all Costa Rica, since the approval of the law in 1979.
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• NRE can be owned by foreigners.
• BF can not be owned by foreigners, only by corporations whose capital stock belongs at least in a 50% to Costa Ricans. (There are an obviously ways to work with this…)
• And finally, maybe the most important difference: NRE does not require the owner to physically possess the land, that is, to be on it all the time.
• But since BF only gives the right of possession and not full ownership, it requires physical possession of the land, at least by means of a third party, such as a guard. This also makes BF an easy target for squatters, since if they can access a piece of land and sit on it, it can be quite a legal battle to take them out.

As you can see, this can be quite a complicated and delicate matter and unless you have significant experience in buying real estate in Costa Rica, you would be well advised to seek a legal professional to help you.

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Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.