Real Estate Due Diligence Process Limitations And Water And Construction Permits
Purchasing property in Costa Rica can seem like an uncertain investment. The process normally begins with an offer on the property. This process usually consists of the realtor presenting an offer on your behalf, based on the
Purchasing property in Costa Rica can seem like an uncertain investment. The process normally begins with an offer on the property. This process usually consists of the realtor presenting an offer on your behalf, based on the asking price. This can be negotiated between Buyer and Seller. An accepted offer is one that is signed by both the Buyer and the Seller and contains the basic conditions and terms. The offer is not to be confused with the binding Sales and Purchase Agreement, rather, it is a letter of intent aimed at showing interest and outlining the basic terms of acceptance.
In Costa Rica, if your goal is to build a single-family home, or to carry out a larger construction project such as condos or a gated development you first need to obtain a construction permit. You cannot obtain a construction permit unless the property you are going to build on has an acceptable source of potable water. Due Diligence will include verifying the legal status of any claimed water source.
It is important to take into account the steps and requirements needed to obtain the permits to start your construction project. Some permits might be granted quickly, but others can be more challenging. The level of complexity of the permits will depend on the necessary paperwork.
The requirements to obtain a construction permit are a) cadastral map of the property b) water availability c) availability of mandatory sanitary water discharge d) (for single family homes) sworn statement requesting the Ministry of Health’s approval of the construction plan d) land use permit.
Land use permits involve checking with the local municipality for what is called an “Uso de Suelo,” more commonly known in English as a “zoning letter.” This document will specify any restrictions you will face regarding the use of your land.
Most buyers want to know that electricity and water are going to be available to them without having to pay thousands of dollars in infrastructure costs, so we take the time to verify whether or not electricity and water are already supplied to the property, or if a power line is at least in the near vicinity.
After obtaining the land use permit that determines whether it is allowed to build housing on the property, it is essential to request a letter of service availability for public drinking water and sanitary sewerage to the Instituto Costarricense de Acueductos y Alcantarillados/AyA (Costa Rican Institute of Aqueducts and Sewerage, whose acronym is AyA).
As mentioned before, water availability is an important requirement in order to obtain the construction permit, therefore, there are some important aspects that must be taken into account. We first have to know which institution provides water to the nearby properties. It could either be provided by an ASADA or by the Instituto Costarricense de Acueductos y Alcantarillados (AyA).
An ASADA is a special type of association that manages and controls hydrological resources in certain rural areas. This management and control has been handed over by AyA, which is a public institution. Once we identify which one provides water to the properties in the area, we can approach the correct institution to make the request. There are some requirements necessary to obtaining the water availability. Both institutions require the same steps:
a) A request for water availability signed by the interested party clearly indicating in relation to what cadastral plan and for what property number the request is being issued. It should be made clear if you are presenting a segregated lot or farm. An address to receive notifications should also be indicated in this letter.
b) Property certification (made directly by the Public Registry of the Property or by a
c) A copy of the cadastral plan (must be certified).
d) A form indicating the type of development. This form is provided by the AyA (Instituto Costarricense de Acuéductos y Alcantarillados/Costa Rican Institute of Aqueducts and Sewerage).
Based on the above information, you can have a clearer picture of the process to obtain a construction permit in Costa Rica. If you need any specialized advice, the Real Estate experts at Outlier Legal Services can effectively assist you in processing and obtaining the necessary permits as well as provide legal advise on the purchase of a property in our country.