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Owners Must Transfer 10% of Their Land to Municipality When Property Is Segregated

I would like to start by offering some background on INVU: The Instituto Nacional de Vivienda y Urbanismo (National Institute of Housing and Urban Planning) is a public entity responsible for executing policies and plans regarding

I would like to start by offering some background on INVU:

The Instituto Nacional de Vivienda y Urbanismo (National Institute of Housing and Urban Planning) is a public entity responsible for executing policies and plans regarding urban development and land use. In addition, they design, coordinate and promote housing programs that allow people to become homeowners, according to their needs and means. This public entity was born to unite two main concepts within a single body: urban development, and land use and housing. It was in 1954 when, thanks to Law No. 1788, they were officially granted the title of specialized autonomous entity with administrative and financial independence to carry out their tasks. In the sixties, and thanks to financing enabled by international policies such as the Alliance for Progress of the United States Government, they were able to expand and developed massive popular housing programs. During this time period the Rural Housing program, the regulation of residential developments, the land reservation policy, and the first large planned residential complexes were also created.

From then on, the institute has been in charge of supporting places such as Los Hatillos in San José, Las Gravilias in Desamparados, Los Corales and Pacuareen Limón, Cubujuquí in Heredia, Los Almendros in Puntarenas, INVU Las Cañas in Alajuela and El Clavel in Pérez Zeledón, among others. But they do not only focus on solving lack of housing for low-income families, they also serve middle-class families that have savings capacity through the Savings and Loan System which offers a low interest rate and fixed, stable installments. Under this system, there are several plans designed to operate in two stages: in the first, a percentage of the total amount is saved and once the saving goal is reached, INVU releases the money and grants a loan to complete the total amount requested. This has become a very attractive option due to its comfortable installments, which are adapted to the conditions of each saver, and due to its fixed rates throughout the financing period.

INVU is a public entity that is constantly being renewed as it seeks to benefit the inhabitants of the country with new options and services. A prominent example is the credit line CredINVU, financed through an institutional surplus and by Law No. 8448, which it makes available to people in the form of loans, without the need for savings. In the eighties, INVU was one of the entities authorized to process the Family Housing Bonus, a state benefit that in solidarity is offered to families that meet the conditions established by Law so that they can solve their housing needs. Through these and other policies, INVU helps to benefit more than one hundred thousand underserved families and provides more than thirty-six thousand solutions for families with savings capacity. INVU has been innovative in offering different forms of financing throughout the country in order to fulfill its objective of providing housing for the Costa Rican family, plan urban development and land use, expand cities, and advise other state agencies.

Recently, the Costa Rican Government established new INVU regulations, stating that owners must transfer 10% of their land to the municipality when a property is segregated.

These regulations will bring new demands for landowners if what is going to be segregated from the main lot has an area equal to or greater to 900 m2. In that case, it would be an obligation for those who intend to divide their land for urban development purposes to donate 10% of the total area. This would apply only if the land is located outside a previously urbanized area. Now, in accordance with article number 17 of the sectioning and housing regulation, if the property is located within an urban area—what in this regulation is called simple fractionation—the landowner will be exempt from this obligation. On the other hand, properties that are located outside urban quadrants or previously urbanized areas must donate 10% of the land, as previously explained. The donated area should be allocated to children’s playgrounds (including playground equipment), parks and/or communal facilities. The ceded areas must be delivered with the relevant equipment and transferred in favor of the municipal domain for the purposes of public use. According to INVU, the purpose of this regulation is to generate greater economic and social well-being, providing families with a healthier environment, planning the development and growth of cities and smaller urban centers alike. The goal is to promote the best use of land and create public areas for communal services, establishing functional street systems and creating investment plans that will go toward public works.

It is well established in this regulation that when the fractionation of the land is carried out in plots for agricultural purposes, livestock, forestry or mixed use, the 10% transfer to the municipality is not required.

It is in everyone’s best interest to know that this rule will only apply to territories that do not have a regulatory plan, which currently includes 42 of the 82 municipalities.

Therefore, I would also like to mention some of the local governments that will not have that regulation: Alajuelita, Puriscal y Aserrí, San José; San Ramón, Palmares, Naranjo in Alajuela; Santo Domingo, Santa Barbara y San Rafael in Heredia, Turrialba and Alvarado and Jimenez in Cartago.

The new regulation announcing that owners that must transfer 10% of their land to the municipality was published in the Scope N° 252 of La Gaceta N° 216 on Wednesday, November 13, 2019. The new Regulation of Fractionation and Urbanizations goes into effect three months after the first day of the month following said publication.

The reasons behind this norm:

INVU must ensure compliance with the Regulation for the National Control of Fractions and Residential Developments, which is the result of a thorough analysis that serves as guidance and contributes to the development of the country. This Regulation promotes a reduction in the cost of residential developments by introducing modifications or changes in the road infrastructure so as to make it simpler and cheaper, thus satisfying a need of the country. The change in the roads comes as a result of the use that they are going to undergo. By reducing the width of the main road, the remaining area can be used as green space as well as a place for aqueduct and sewerage infrastructure to pass. These changes reduce costs in materials, equipment and time required for residential development as well as reducing costs in pavement maintenance. The norm stimulates the construction of houses, especially public housing, which will benefit from a significant reduction in the cost of residential development, thus producing an incentive to carry out these developments.

The norm also regulates joint housing projects that are also of social interest, regardless of the social classes for which they are intended, since the State benefits from the development of projects with high densities, narrow streets, pedestrian paths, and restricted use. Additionally, it contemplates progressive housing projects, which are residential developments in which lots are sold with deferred provision of services. It also regulates the transfer of public areas for communal buildings and recreational areas. The purpose of the norm is to add value to these areas and demand funding for the real needs of a growing population.

In the case of subdivisions and residential developments outside of urban districts, the norm states that the percentage of the area to be yielded can be reduced if both INVU and the relevant municipality agree to do so. The norm also requires all residential developments to allow for commercial areas and public and private offices so as to promote social interaction and prevent these centers from becoming entirely residential. INVU will remain vigilant and will use its authority, granted by the Urban Planning Law, to ensure compliance with the regulations aimed at serving national interest included in this norm.

Summary of the legal basis for the expropriation. Is it mandated by law?

Legal expropriation in Costa Rica is governed by Law number 9286. This law regulates forced expropriation due to a legally proven public interest. Expropriation is the prerogative of the Public Administration and includes any form of deprivation of private property or of legitimate rights or patrimonial interests, regardless of the holders, through prior payment of an indemnity that represents the fair price of what is to be expropriated. If you own a property and it is in the legitimate interest of the State to have it, the latter can expropriate the property from you but, before this happens, the State must give compensation for the property. The expropriation law indicates that in order for the Public Administration to acquire goods or rights it must follow the current regulations on administrative contracting, unless, due to the nature of the work, technical studies determine what goods or rights are to be acquired. In this case, the procedures established in the expropriation law must be followed. According to this law, no owner or possessor may oppose either a legal expropriation of their real estate or the studies necessary to build, preserve or improve a public work. Also, they are obliged to offer movable property up for examination when it is relevant to a previously declared public interest. In case of refusal by the owner, authorization must be requested from the appropriate judge. It should be noted that before the State carries out studies of the property for the purpose of expropriation on behalf of public interest, the owner must be notified by a commissioned official and will also be notified in writing of the date, time, type of study and the reasons for it.



Paralegal Assistant with customer service certificate. More than 3 years of experience in Real Estate and Paralegal Services. Has worked as an International Customer Service Agent for Delta Airlines USA.

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