It helps to be familiar with the alphabet soup of regulatory agencies you will be dealing with during the permitting process. Following, a brief list:

MINAET (www.minaet.go.cr): The Ministerio del Ambiente, Energía, y Telecomunicaciones, or Minstery of Environment, Energy, and Telecommunications. This is the big cheese when it comes to environmental regulation in Costa Rica. Permits to cut down trees, drill wells, and mine anything must pass through.

SETENA: The Secretaría Técnica Nacional Ambiental, or the National Technical Environmental Secretariat. A branch of MINAET. SETENA is the bugaboo of many a would-be developer, as this is the agency that reviews the environmental impact of developments and gives them the thumbs up or thumbs down. Its infamy comes from the incredibly slow process of the environmental review. For developments that have to do a full impact study, the entire processes takes about two years, often more.

ICE: The Instituto Costarricense de Electricidad, or Costa Rican Electricity Institute. The government monopoly that controls all electricity generation and distribution and, until recently, telecommunications.

AyA: The Instituto Costarricense de Acueductos y Alcantarillados. Basically the state water utility. AyA does not have national coverage, and in many parts of the country outside the Central Valley, developers have to get water permits elsewhere.

ASADA: Asociaciones Administradoras de Sistemas de Acueductos y Alcantarillados Sanitarios, or Administration Association of Sewer and Aqueduct Systems. In some parts of the country, these are the associations that manage the water supply. They are local, and whether you have to deal with one depends entirely on where your property is located.

INVU: The Instituto Nacional de Vivienda y Urbanismo, or the National Housing and Urbanism Institute. INVU is supposedly in charge of urban planning, meaning that all condominium and subdivision developments need its seal of approval.

ICT: The Instituto Costarricense de Turismo, or the Costa Rica Tourism Board. Anything that has to do with the Maritime Zone (i.e. – coastal land within 200 m. of high tide) happens through the ICT. Also, permits for hotel and restaurant operations.

Ministerio de Salud: The Health Ministry. Salud oversees everything having to do with public health, including wastewater disposal and water treatment, as well as health certifications for hotels and restaurants.

CFIA: Colegio Federado de Ingenieros y Arquitectos, or the Federated Association of Engineers and Architects. This government-sanctioned professional association must give the OK to all construction projects. The Association is primarily concerned with technical design issues.

There is no one, single way to do the permitting process, and there is no single entry point. How you do permitting will depend a lot on who you hire and how much you’re willing to spend. Many of the procedures can be carried out in parallel, either legally or extra-legally. Permitting any sizable construction project, however, is not a do-it-yourself experience, and for the most part you’ll start out by hiring the professionals you will need for the process.

After drawing up your construction plans, you’ll be doing permitting in an attempt to please basically four government entities. The Colegio Federado de Ingenieros y Arquitectos (CFIA) will want to know that your construction plans include all the basic elements that construction plans should. They will also want to know that for the project, you have hired professionals registered with the CFIA. The Secretaria Técnica Nacional Ambiental (SETENA) needs to be satisfied that your construction project will not significantly damage the environment or the local community. If you’re doing a development of a high-enough density, the Instituto Nacional de Vivienda y Urbanismo (INVU) has a whole list of different permits and go-aheads you’ll have to get from different government agencies before it will give your project the green light. And finally, the local municipality where you are building will want you to present the CFIA, SETENA, and INVU approvals (plus perhaps a few others) before it will grant you your construction permits.

An important point is that each municipality requires different documents for the granting of the final construction permits. But even if the municipality grants you a construction permit without one of the permits you need from some branch of the central government bureaucracy – say, the environmental certification – you still need that permit. This redundancy of authority is one of the curiosities (some would say absurdities) of the Costa Rican system: Just because a builder has construction permits from a municipality does not mean the construction is legal. The other permits for the construction must be obtained regardless of what the municipality says or you could be shut down at any moment by a central government regulator. Keep this in mind if you’re tempted to bribe a municipal official to get your permits. That ill-gotten permit won’t do you much good if the central government decides to bring down the hammer.

At the same time, however, the bitter irony (as long-time developers in Costa Rica will tell you) is that there are so many regulations and restrictions administered independently of one another by so many different branches of the Costa Rican bureaucracy that sometimes you don’t fully comply with the law even when you want to. Do your best.

A final important principle to keep in mind as you approach the permitting process is that land in Costa Rica is under the Napoleonic legal regime, not the common law regime found in the United States and Canada. In practice, that means that while you technically own the land, you don’t own any natural resource on top of it or below it. Trees, mineral deposits, well water, rivers, lakes, springs, wildlife, and all the rest are property of the State. The principle to follow, therefore, is that if you are going to remove, use, or modify any of these things on “your” property, there is probably a permit or concession you will have get from somewhere.

From 2006 to 2009 there was an incredible explosion in construction in Costa Rica. Don’t let that fool you: Costa Rica is still one of the most difficult countries in the world to build in. In addition to being expensive in terms of fees and materials, the main hang-up that developers and home-builders face is the enormous variety of permits that must be obtained before building. To develop a property larger than 500 m2, you need the OK from at least half a dozen separate entities, probably more. Developing a subdivision or a condominium adds another layer of oversight from another regulatory body, and when all is said and done you’ll probably need to have hired at least seven state-certified professionals, including an architect, a civil engineer, a topographer, an environmental engineer, an archaeologist, an anthropologist, and a biologist. All that, and you haven’t even started construction yet.

All told, the permitting process for a small development can take anywhere from a six months to several years and cost the developer some percent of the total value of the project. Construction of individual homes on properties covering less than a half a hectare must pass through a similar process, but with substantially less regulation.

This first part article seeks to guide the amateur developer or home builder through the thicket of permitting requirements and regulation. It would be impossible to spell out every detail of every permitting procedure. The regulations are constantly changing, they vary in each of the country’s 81 municipalities, and no matter how sure something seems, exceptions pile upon exceptions. This chapter, then, seeks to be only a detailed overview of construction permitting in Costa Rica, and is meant to compliment the expertise of a highly-recommended team of professionals that you should hire to handle the permitting process for you.

If all this sounds too complicated and expensive, and is tempting you to cut corners on permitting and environmental compliance of your development, you wouldn’t be the first. Government regulators have simply not kept pace with developers during the last decade, causing severe backlogs. That encouraged many developers – especially in Guanacaste and the Central Pacific – to throw up their hands and begin construction without all the necessary permits, muttering the mantra that it’s easier to ask forgiveness than permission. Other developers have turned to corruption, dolling out bribes to government officials to get things moving.

Both of these strategies have often worked. Today, however, cutting corners on permitting costs more than it saves, both in time and money. This is mainly because the government is finally improving enforcement, significantly increasing the chance that un-permitted construction will get shut down long before the developer has a chance to ask forgiveness. Indeed, the year 2008 saw a series of high-profile crackdowns on construction sites all over the country that got the developer community’s attention. Legally, the penalties can include everything from fines to even jail time. Along with the crackdowns, the government is also making a few key changes in the permitting process – particularly in the environmental review – that promise to make permitting move faster, meaning that bribes, in addition to being a crime, are no longer worth the risk.

Also, as with everything else in Costa Rica, if you think doing permitting the right way is onerous, wait and see what happens when you do it the wrong way. Without the meticulous attention to detail that the permitting process requires, you could end up unnecessarily delaying your product an extra year or two – a catastrophic development if your financing is time sensitive. Horror stories abound.

Finally, cutting corners on permitting hurts everyone in the long run. Improper waste water management, the illegal clearing of forest, and the interruption of biological corridors by private roads destroy the very reasons people want to live in Costa Rica in the first place – namely, jungle, wildlife, beautiful landscapes, and friendly local communities. Permitting in Costa Rica is complicated and frustrating, but it is intended to protect the goose laying the golden eggs. Even better, think of it as keeping your neighbor from building a monstrosity that would lower the value of your property.

Title insurance is a relatively new concept for Costa Rica. Until only recently, it was rather difficult to get title insurance in Costa Rica. It is not required to have title insurance when purchasing a property since the properties are usually purchase by foreigners in cash Now, there are some very good options for obtaining title insurance when buying real estate in Costa Rica. Title insurance is not required when purchasing property in Costa Rica, unless the buyer is obtaining a mortgage for the purchase. However, many North Americans feel a greater sense of security in having title insurance arranged during the purchasing process.

Title Insurance is insurance against defects in title to real property. It is meant to protect an owner’s financial interest in property against loss due to title defects, liens or other matters of public record. Before you purchase your property, the property may have gone through several ownership changes or there are documents lacking proof of the seller’s ownership. Someone along the way may have forged a signature in transferring title or there may be unpaid real estate taxes or other liens against the property. Title insurance covers the insured party for any claims and legal fees that arise out of such problems. Title insurance will defend against a lawsuit attacking the title, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy. Title insurance guarantees that no one else can claim your property thus it also provides the peace of mind that you will not incur unexpected debts from your new property.

In short title insurance in Costa Rica protects against:

• Invalid documents executed under expired or non-existent power.
• False assumption of identity of the legitimate property owner.
• Falsification of documents, legal power, and other papers related to the transfer of property title.
• Liens or other financial burdens charged to the previous property owner.
• Hidden heirs of previous property owners.
• Documents executed by minors of age.
• Invalid documents delivered after death of previous owner.

However, before you commit to title insurance you should consider Costa Rica has an excellent public registry. A competent attorney can perform the initial title search and explain how to perform this verification and what to look for.

Furthermore your escrow agent can be a lawyer or law firm. All escrow agents must be registered with the Superintendence of Financial Entities (SUGEF), the government body in charge of supervision of financial entities and administration of third party funds. It is mandatory for administrators of third-party funds to be properly registered with this institution. If you escrow agent is registered with SUGEF your funds will be protected and the risk of anything happening greatly reduced.

Stewart Title Latin America is one of the title insurance companies currently operating in Costa Rica.

Stewart Title – Costa Rica
www.stewarttitlelatinamerica.com – Costa Rica
customerservice@stewartcr.com
Phone: (506) 2258-5600

Anyone who lives in Costa Rica knows that we have more rainy months than dry months. Generally speaking winter begins towards the end of April and ends around the beginning of November. Every year the cycle varies slightly.

The country’s copious rainfall take as toll on most homes. According to the Costa Rica’s professional school of architects or Colegio de Ingenieros y de Arquitectos (CFIA) around 50 percent of the homes here need some type of repair. I know first hand about house repair. I have to spend a few hundred dollars every dry season to make some minor repairs on my home. Fortunately, the labor rates for home repair are much less than they are in the U.S. or other countries. I have a handyman who has worked for me for over ten years. His rates are very reasonable and his work is excellent. Besides having a good lawyer every baby boomer retirees who owns a home in Costa Rica should have a good handyman.

Here is some advice on preventative home maintenance and what to look for.

1. Every six months examine your homes floors and make sure there are no cracks and fissures.
2. Experts also recommend that you inspect the inside and outside walls of your home every six months.
3. You roof should be check at least once a year and before winter starts. Wind and strong winds can really do a number on the sheets of corrugated metal which cover most roofs in Costa Rica. Most leaks can be fixed by using silicon however if the roof is really rusted the metal sheets should replaced. If you can take a screw driver and it will perforate the metal sheets then you should replace them.
4. A lot of roof damage can be avoided by keeping your rain gutters in good condition to keep water from damaging your roof and ceilings.