First, consider that Costa Rica gets more lush, green, mountainous and scenic the further south and east you go. Northwest Costa Rica (Guanacaste) is cattle ranch country similar to Nicaragua, dry and lacking sufficient water to service the building boom (and now bust), prickly scrub brush vegetation, dry forests and littered wind-blown beaches. For years I have suggested avoiding Guanacaste, though admittedly, I was premature in my assessment and people continued to make money for a while. But now many are left holding the bag as projects have been put on hold for building violations, financing has dried like the vegetation, and plummeting property values. I wouldn’t risk buying anything in Guanacaste until this 2008/2009 recession/depression has leveled off. It certainly more than peaked two years ago, and was flooded in ‘for sale’ signs and foreclosures before the present economic meltdown.
Investing in real estate in Costa Rica requires an understanding of Third World processes. Though most transactions are now handled on the up and up, some fraudulent conveyances from years ago are still being disputed. Others have inadvertently bought the key rights only to hotels in Costa Rican, for example, rather than outright ownership of the land and buildings. Internationally known and respected Stewart Title operates in Costa Rica, and I highly recommend them to do a thorough job for you, guaranteeing title, possibly helping with the financing, and closing the deal fair and square. Costa Rica banks charge high rates of interest, and situations have been known where a mortgage credit application has been approved by a private bank, but there is no money to lend. Most people needing financing are further ahead to begin soliciting private lenders in the US.
All this being said, don’t let it discourage you from investigating the possibilities to retire, own a second home, or simply invest in the rest of Costa Rica. Costa Rica is a relatively stable country politically and economically, telecommunications are world-class, Costa Rica is less than three hours flight from Miami, the country is due to gain well as the Central American Free Trade Agreement becomes implemented because of low wages and an educated population, the fertile volcanic soil can feed all Ticos with crops left over for export, the landscapes are outstanding, there are two warm oceans and hundreds of beaches to choose from, the weather is comfortable year-round (especially in the Central Valley considered the best on the planet) and practically hurricane-proof, 85% of all electricity in Costa Rica is generated by clean hydroelectricity (with lots of untapped potential), oil reserves are waiting off-shore if needed, and ecotourism was founded in Costa Rica. And with a limited amount ideal Costa Rica property available, and prices have done nothing but go up over the last several years, though they seem to have leveled off and even fallen recently, Costa Rica could make the perfect jumping off point to escape the worries of a falling US economy.
I have a friend, Mark Jackson, president of Isthmus Realty cel. 011-506-8391-9051 Mark is a British Canadian who speaks perfect Spanish and has been selling real estate in Costa Rica for twenty years, and helped me buy my first hotel in Costa Rica, Hemingway Inn back in 1995!
Nico Bötefür who works for Don Elias Real Estate is a good person, and helped me buy Adventure Inn in 2004, speaks perfect English, Spanish and native German tel: +506-8835-0020
Kim at Costa Rica Land Sales never actually worked for me, but I can tell she is a go getter, and may be able to find what you are looking for. Call +506- 8301-5070
Let me tell you about my house
In July 2003 I decided to stop renting and to buy a house. I had $40,000 cash, and wanted a place that would be ideal for my dogs. After looking around for a few days on my own, I hired the services of a realtor, who showed me a few places that didn’t impress me, and introduced me to Juan Jose Herrera Amigetti. Juan Jose is an architect, and a part-time professor at the University of Costa Rica. He has owned a large farm for over thirty years in San Ramon, Tres Rios, about eight miles east of central San Jose in the mountains. Juan Jose was the current Costa Rican tennis champion for his age, and a really nice guy. He showed me several elegant homes he had already built on his building lots for others, beautiful architectural lines, modern, some with views out over the Central Valley, others down low and buried deep in the jungle, no visible neighbors, I’m was in love with the place!
He was extremely enthusiastic about building me my dream home on one of his jungle lots, a quality-built open-concept design with lots of decking, a 15 meter lap pool, and Jacuzzi. My favorite lot, 2800 square meters was fairly steep, but he said he could build the house on it, no problem! He quoted me $165,000, complete, ready to move in, even including damming a natural spring of fresh water on my property so I wouldn’t have a water bill. I asked how long it would take to complete my home and he said two or three months, and he needed 25% down to begin. I was just elated, and so excited, he had a standard contract that I signed, and gave him my $40,000. After completion, he was going to finance my home for three years at 5% interest then the total amount was due. Shortly after he paid the real estate commission, so I knew he had integrity.
About a week later I saw Juan Jose on his farm driving a new $60,000 Land Rover Defender, good for him, I thought, business must be good. “When are you going to start construction?” He replied, “I can’t until the rainy season is over.” I thought to myself, why didn’t he say that earlier, now I have to wait four or five months before he begins. Anyway, now I am looking at February or March, 2004 before I can move in. Oh well, my dream is still alive, but I just have to wait a bit longer than I thought.
Then I got a phone call from my next door neighbor asking if I want to buy the property between his house and mine. What property? There was no room for another house.
With rubber boots on, and a long measuring tape I paced off my sloping jungle property, but instead of the 2,800 square meters promised on the contract, it was only 1,790 square meters. I brought it to Juan Jose’s attention, and he said he never guaranteed the property size and he had been guessing. So I showed him his hand-drawn plans of the lot saying 2800 square meters. He agreed to reduce my purchase price by $36 per square meter, or $36,000, but not to worry, the man who owns the land that was supposed to be mine will never build on it, so I’ll still have my jungle even though someone else owns one side of my property.
Wrong, the neighbor started building a huge ugly cement block monster of a house three stories high, hovering over my house, there went my peace and privacy, especially because he keeps three barking dogs locked inside the open-air garage. I asked Juan Jose for my money back, but he said he didn’t have it (of course not, he was driving it!).
Finally in January, 2004, six months after the contract was signed, he started work, and put in a long steep driveway down to the house with two cement pads that you drive on. The driveway was impossible to use because it was too smooth and slippery, even Juan Jose in ‘my’ new Land Rover Defender couldn’t get down it. Over the course of the next two years, Juan Jose and his crew slowly worked away on the house, needing a long trough from the roadway above to bring down all the materials. He constantly said he needed just $10 or $15,000 more to finish the house, as he had lost a lot of money in a warehouse deal. With my last installment, he signed an agreement that if the house wasn’t finished in three months, it was going to cost him $100 per day until complete. I knew he owned several properties, and would be good for it, but shortly after I gave him the money, as usual, he would stop working on my house for weeks at a time. After two years I had given Juan Jose a total of $89,000 cash.
I hired a lawyer to put some pressure on Juan Jose to produce, but he was able to bribe her to stall me.
I asked that he use a pool expert to at least advise him but he insisted he knew all about pools. He poured the concrete for the pool on an angle to the contour of the land, so he had landslides that kept eating away it my driveway above, which was already too narrow and useless. He left no spaces for the skimmers (he told me he knew what he was doing?).
Finally in late 2004, I went to buy my new hotel, and used my incomplete house and property as collateral. When the lawyers searched the title, they discovered Juan Jose didn’t own the land, and was only claiming it as a squatter. It took until February, 2006 to finally get the land in my name, but at least that worked. By April, 2006, nearly three years after signing the deal, I finally got tired of Juan Jose screwing around with my house, his workers there many days, but with no materials to work with.
My new lawyer, Lorena Soto, has a brother who is an engineer. One day when the two were driving in my neighborhood, they stopped by to see my house. He looked under it to find it had completely inadequate support, and was going to fall into the creek with a medium earthquake. I hired an engineer from the Colegio de Engineros, where Juan Jose got his architect’s license and permission to build the house, to do a report for $800. The report came back that the house was an accident waiting to happen. He had built it according to a plan as if it was flat hard land, yet there is a huge inclination. Unlike his promise to construct a quality house, he had used the cheapest materials, wired the place with #14 wire, and not #12 as the law requires, the floors shook when you walked on them, there are no doors, windows, kitchen, or bathroom installed, the roof was barely nailed down and badly leaked, the pool was a mud hole from run-off caving in from above eating away at my narrow driveway entrance. It was a mess. And then I discovered he had built my entire house on land fill that he himself had put there over the last thirty years. Building on it was illegal.
My new lawyer said Juan Jose tried to bribe her unsuccessfully like my first lawyer, but Lorena Soto doesn’t need the money, and is one of the few lawyers I have ever met with integrity, and highly recommend her, tel: 3381-7558. I had her go through all the legal motions to finally remove Juan Jose from the property and break the agreement to build my house, and it took five more months until October, 2006, to finally get permission to complete my house on my own.
Thinking I could at least sue Juan Jose for non-performance and endangering my life, my lawyer discovered he had put all of his properties, and ‘my’ Land Rover Defender into other people’s names. With the advice of three engineers, I started my own work crew in mid-October, 2006. Instead of a two bedroom, one bath home, with the two new supporting 20 foot high block retaining walls awkwardly hand-dug under the house down to the original soil three meters deep and the full length of the house, I fit in two more bedrooms, a bath and a storage area between these walls, my silver lining though it wasn’t free.
After three years of lies, deceit, non-performance and endangering the life of my family and me, I instructed Lorena, to take this case to completion as I didn’t want Juan Jose coming back someday saying I owed him money. If the government allows Juan Jose to get away with this, it says nothing positive about investing in Costa Rica. Juan Jose is a registered professional architect, and as such, bares full responsibility to deliver what he contracted. If that doesn’t work, then the Colegio de Engineros bares responsibility because they licensed the man. Right now Juan Jose is still working, and has two other partially-built homes on this same farm, I pity the new owners, he is a 100% crook. If the government does not at least remove his builders license, let alone punish him for fraud, I don’t recommend anyone invest in Costa Rica in a new building venture, because the law does not protect you from shoddy and inadequate workmanship contracted by a professional.
Time will eventually tell where this will all lead, but at this point, I am not holding my breath for justice. This is a banana republic, and many government officials can be bribed by people like Juan Jose. If I was a Tico, I’d look after it personally, if you know what I mean. But as a gringo (Canadian – same thing!), I can only use the law which is stacked against me.
I know my house will be worth about $200,000 to $250,000 when completed, and I’ll only have maybe $150,000 into it, so I won’t lose, but it is the pain in the butt this whole ordeal has been, three and a half years and I still don’t have a house I can call home.
Update December 2008
I finished my house myself and moved in in April, 2007. I just went to a hearing this week where Juan Jose was on the defense to protect his architect’s license. I have a good feeling as it appeared by the expressions, body language and rolling their eyes of the three judges when Juan Jose spoke, that the Collegio de Engineros y Architectos are going to rule against Juan Jose. It is between the Collegio and Juan Jose, I just want to live in peace even though he owes me a lot of money for non-performance at $100 per day, but he is still my neighbor.
Funny that this is all self-inflicted, I just wanted him to get off my property and let me finish the house myself, he had no money to complete the project which isn’t against the law, just get out of the way. But he refused to leave, so it was his own doing that finally brought him before the Engineering board. What a narcissist, as now he tells my neighbors that I am a crook, that I don’t understand his culture! But they all know better as most have had runnings in with him also.