Considering building in a development in San juanillo

176POSTS

5 years ago

Covid 19 has created quite a time to reflect on investing in Costa Rica in many levels. One important thing learned during this process is access and use/enjoyment of your investment.

If you are considering buying into a development (housing community) there are some extremely important things to consider, even when not under restrictions such as Covid 19, but also consider the impact of those.

1). When you purchase in a development, you are not only subject to the municipality around the development, but the developer (and HOA) as well. This means you have several sets of rules, regulations and decisions to follow. Also, if the HOA is not “set up”, it is simply a way for a developer to force decisions upon you as “acting” HOA.

2). Regardless of whether you begin with an attorney assisting you, consider a few important things: Is the attorney acting on my behalf or the company? Even if I have an attorney, if the company breaches or mismanages the build or the money, it will still take money and time to attempt to rectify the issues.

3) Companies that send out newsletters, letters to clients, set up social media, and reviews DO NOT have to be truthful and transparent, you are relying on their intrinsic value system which may be non-existent. Make sure you read the find print on advertising and in contracts, especially when it says -not everything advertised exists and we will do our best to provide amenities and infrastructure but do not promise it will actually be done.

4) Know the company, history, country, people, banking, legal system, etc before you invest your life savings and dreams. Many scammers USE the beauty of CR and your emotional attachment to your dreams to take advantage and there are a lot of horror stories.

5) Get on blogs and forums of those who have attempted to do what you want to do! Their successes and failures give you more opportunity to see your dreams realized!

PURA VIDA!

See also

Working in San Jose - Guide
Housing & building contractors in Costa Rica - Business
Building a house near Avellanas - 10 Replies
Update on our Development/house building experience - 19 Replies
Eco Lagarto Development - 4 Replies
Building a house - 46 Replies
Update on our Development/house building experience - 11 Replies

samramon ViP

1338POSTS

5 years ago

What she says is correct. I once put money down on a property here, and used the attorney of the realtor. Big mistake. The realtor's attorney was "pushing the deal through" (told me it was good to buy) but then I found out via another attorney that I had the forethought to check with, that the property was not properly titled. The other attorney was lying to me.
Luckily I got my money back.
But I put on my web site after that a page about buying real estate and it has said, as I say now:
ALWAYS USE YOUR OWN ATTORNEY WHO DOES NOT REPRESENT THE SELLER OR REALTOR.
He or she should represent only you - no one else involved with that particular company or property.

Saggaboy Active member

73POSTS

5 years ago

Could not say it better myself!

petracelli New member

7POSTS

5 years ago

Thank you justagirl,

You are right on. i was in CR early 2019 looking at possible developments
the one we almost got involved with was never registered as HOA.
- The Developer point person was hinting that a small yearly fee was needed to maintain access roadways (dirt trails) and weeds cut to help with property appeal.
We since discovered that the property was still referred to as farmland ??
So you would really not own your land??
Anyone looking to buy needs to find legally recorded titled property.
Can a developer have a "farm property " and have it legally registered
as HOA ?

All negative or positive thoughts extremely welcome.

Thank you expat community

Empresshara Member

2POSTS

5 years ago

You can have what are considered "agricultural" use lots but they cannot be smaller than 5000 sq meters. Legally the lots must be segregated in the Registro Nacional de Costa Rica as a "filial" or daughter lot of the main finca. Do beware that actually creating a formal Condominio Horizontal or HOA is expensive and most "developers" never bother. 🇧🇭
The developer or builder must post a $50,000 bond with the ministry before construction or land sale. A proof of water availability from the AyA is essential to obtain a permit to build. Without it, you are stuck with worthless dirt. Be sure your lawyer puts the property in your personal name and doesnt talk you into the "legal safety" of owning a corporation.

Justagirl8870 Contributor

176POSTS

5 years ago

Empresshara, great information, however, I don't think the $50,000.00 bond is a concern when they are charging at least that (sometimes much, much more) for 1 lot. Why not form a corporation?

I thank you so much for your information because I think it will help many people looking to come to Costa Rica and buy a home!

samramon ViP

1338POSTS

5 years ago

My lots are "agricultura" yet properly titled. All that counts is that the property you are buying is listed in the registro and truly belongs to the person you are buying it from, and has no liens against it. Of course you want to make sure there is water access and electric access. And access to get to the property by some sort of road or driveway.
Sometimes driveways are listed on the title that you have the use of it even though it does not belong to you.
If you use a trustworthy and good attorney, these things should not be a problem. But it's always good to know yourself what needs to be checked, and double-check things yourself.

I think this is a good rule to follow no matter what the subject is. For example I have found that doctors and other types of attorneys in the United States make mistakes, and I have caught their mistakes, saving myself from problems.

Justagirl8870 Contributor

176POSTS

5 years ago

I’ve learned the very hard way that developers that tell you all of the things you will be able to have, do and enjoy is much like visiting the casino to receive that promised jackpot- you will most likely put in way more than you will get back in return. In the development I live in, it was advertised, marketed and reviewed for years as Costa Rica’s largest and most successful among other adjectives and adverbs. Beginning 2003 to now, none of their promises have come to fruition. To read that HOAs don’t get developed because of cost is an item I would have never considers y til going through it. Covid showed what that looks like- since the developer was the HOA, it managed the community like a dictatorship even to the extent of denying access to your own property, the ability to have a visitor or even access to the public roads to name a few things. They also dictate who can be in the community and at what cost. Yes, there are doctors and attorney that not only make mistakes but are found to be corrupt in the US so no country is immune from their issues, however, being able to expose those issues to protect victimization is immensely important. I can’t say enough how important it is to do your due diligence. If you’re looking for adventure at any cost, going about a big life move blindly -whether surgery, starting a business or buying a major purchase, you set yourself up to be taken advantage of while you exhaust yourself trying to figure what’s going on and who is the n loved and who can and will help.

cratedivision Contributor

101POSTS

5 years ago

A developer can have a farm and build a community on that farm, but CANNOT declare it condominium and collect HOA fees. I am in this exact situation right now. Did everything right and the land where my home sits is my land, but the common roads are covered by servidumbre and all the owners of homes need to work together to keep the property in good order. Kind of like a self managed condominium. You can form a "homeowner association" but this is a very loose way to do it and again would be managed by the owners of the properties in the community

cratedivision Contributor

101POSTS

5 years ago

#10

Very well put. Unfortunately most times these developers are not locals. We have met many US and Cuban developers, but not one local so keep this mind. Just because you might have something in common with the developer (place of birth perhaps), this doesn't make them "your friend". Some are there to take your money and all costs. This is from personal experience. If you want more information,, PM me.

Justagirl8870 Contributor

176POSTS

5 years ago

#11

Exactly. We got a quote from two local builders to fix and finish our home and add a few luxuries and the quote was ONE FIFTH what the development charged! (Canadian CEO)