Real Estate Risks in Costa Rica

Real estate in Costa Rica is blossoming, but with this emerging trend, the price range is creeping up. Real estate dealers are urging people to invest immediately because waiting may just end up costing them more money. The feasibility of Costa Rica real estate investing is in no doubt, but before leaping forward for the offers, an investor should carefully scrutinize the property ownership rules among other factors that could jeopardize the investment.

Although the climate is great, property relatively affordable and government regulations flexible, a foreign investor should know about the three risks that face any property owner in Costa Rica: expropriation, maritime Zone and Squatters. Regarding expropriation, the Costa Rican government has the right to enlarge the national parks and conservancy parks. Under this law, the government compensates people whose land it has expropriated. The risk emerges because the government does not always compensate people within good time. A proposed legislation, which recommends that government pays people before taking up the land, could remedy this in future.

The second risk is the Maritime zone. Most investors not knowing of existing laws blindly purchase property on the neighboring beach hoping to invest in Costa Rica oceanfront real estate but there is a stipulation for such property; read the existing regulations because it could be a completely different bargain.

In Costa Rica estate investment, no private ownership is allowed on beachfront property. The government owns the first 200 meters on the beach. The 50 meters are set a side as public beach areas and no development is allowed. The remaining 150 meters can only be developed under special government concessions, at specified times.

The third risk is the squatter problem. Investing in Costa Rica real estate may expose the landowner to the squatter problem especially where he or she does not reside on the property. This also applies to people who own large tracks of land. The law favors the poor, small landowners who may encroach on the larger or idle property for cultivation and food growing purposes.