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The Evolution of Costa Rican Architecture and its Influence in Modern Guanacaste

Casa Kanda | ABC Real Estate Costa Ricaby: Federico Fernández,
Real Estate Consultant

The Costa Rican architectural background in fact goes a long way back. Recently, sites where the mysterious pre-Columbian stone spheres were found in southern territories of our country were declared World Heritage by UNESCO. These belong to settlements established in our territory as far back as 200 B.C., and up to the 16th century, when the first Europeans explored what later became our great nation. You can learn about these interesting spheres at World-Mysteries.com.

The human settlements Spanish conquerors found back then consisted of villages with round cottages with stone foundations and thatch roofs that inspire the palapas we now find in several luxury homes and resorts in the province of Guanacaste.

ABC Real Estate Costa RicaPerhaps the type of architecture that marked our landscape the most was the one brought by our Spanish conquerors. Constructions from the colonial period between 1560 and the mid-19th century are still standing. A lot of them are religious buildings (Catholic churches), simple houses in the original grid of major cities, or hacienda houses.

As our nation became prosperous with the exports of our main product for decades (coffee) and there was an interaction with the old world, European styles were used in buildings that date to the late 19th century and mid-20th century that still stand. Mainly in the central valley you can find gothic-style churches, neoclassical public buildings and private residences, a lot of Victorian-style homes that belonged to the powerful aristocracy, and even more recent tendencies like Art Nouveau and Art Deco.

ABC Real Estate Costa RicaBut modern architects have adopted a neocolonial style that seems to belong better to the province of Guanacaste and its landscape with plains, beautiful trees, cattle raising activities, etc. Colonial Ranch Inn is a perfect example of this style.

The common defined architectural designs just mentioned could be said to prevail in our area, but they are not the only styles available. Costa Rican architects are very talented. With the presence of residents and home owners from all around the world, the current tendencies towards energy efficient and environmental friendly designs and the use of modern technology, new homes in all sorts of forms have been and are being built in Guanacaste.

ABC Real Estate Costa RicaWe at ABC Real Estate have served clients that fell in love with a particular existing residence. Others have found in existent construction the base to remodel and produce their desired home. Or, we have had the case where clients found THE HOME SITE and have placed in hands of a local architect and builder the responsibility to materialize this dream. Check out the properties we have to offer. You might find that idyllic place!

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ABC Real Estate on HGTV International!

HGTV House Hunters International

ABC Real Estate Costa Rica
ABC Real Estate would like to announce the upcoming airing of the HGTV show, House Hunters International, on Tuesday, July 1, 2014, at 8:30pm Costa Rica time, 10:30pm EST, and again at 1:30am EST, featuring the buyer, Nancy McCarter, friend, Karen Kriegshauser, and our own Mark Venegas.

 

 

 

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Costa Rica and the World Cup

AFP PHOTO / Ezequiel BECERRA |
by: Jason Clements, Real Estate Consultant

Imagine a country that loved peace so much that it abolished all its military forces 65 years ago. It has lived happily without an army, navy or air force, and most importantly war ever since. No other state in its region has such a consistent, unbroken record of stable democracy. Its pioneering conservation policies and protected national parks (25% of the total land) mean that it regularly tops global polls as the “greenest” nation on earth. By 2021, Costa Rica aims to become the world’s first carbon-neutral country. Life expectancy betters that of the US, and the National Health Service continues to deliver outcomes that soar above the average for its continent. Surrounded by strife and turmoil on all sides, this tiny country, by and large, prospers in security and harmony.

It’s not every World Cup that throws up an intriguing upstart team with such an upbeat story to tell. Back in 1996, despite its dictatorial regime, many people found themselves rooting for North Korea during its giant-killing run. In 1990, Cameroon, nobody’s idea of a beacon of human rights and environmental responsibility, took on the role of favorite “other” team. In more recent tournaments, one promising African outfit after another has vied to play this part, before inevitably falling to one of the dominant top tier teams. Even the most loyal optimist will find it hard to see the Ticos (as Costa Ricans are called) prevailing against England in Belo Horizonte, or against their other rivals Uruguay or Italy. So the plucky outsiders from a nation of hope may face an early exit. All the same, Costa Rica’s chance presence in the same group deserves to illuminate the non-football assets of a country that, niche eco-tourism aside, tends to lurk far below the European radar.

Costa Rica’s history as a demilitarized zone began in December 1948, when President Figueres took a symbolic hammer to the walls of the army headquarters in the capital San Jose. Inspired by the pacifism of H.G. Wells, he passed the barracks keys to the minister of education to prepare for its transformation into a museum. Shrewdly, Figueres outlawed the Communist Party to appease the US, but then instituted many of the redistributive policies for which the Communists had called to take place. Four decades later, Nobel Peace Laureate Oscar Arias could still celebrate the fact that “in my homeland you will not find a single tank, a single artillery piece, a single warship or a single military helicopter. Today we threaten no one, neither our own people nor our neighbors. Such threats are absent not because we lack tanks but because there are few of us who are hungry, illiterate or unemployed.”

From Andorra to Kiribati, Mauritius to Monaco, various states and enclaves scattered across the map survive without armies. Other sovereign nations, such as Iceland, ostensibly maintain no standing forces but instead shelter under the umbrella of a military alliance like NATO, and offer it strategic and technical support. For the duration of its military-free status, Costa Rica has remained a country fully independent. If the popular Epsy Campbell Barr, an economist of Jamaican heritage, had not given way to president-elect Luis Solis, Costa Rica would also have a black female head of state. It has already topped two successive league tables drawn up by the New Economics Foundation for a “Happy Planet” index. But nowhere on earth, and least of all in tropical Central America, will you find Utopia.

Has being army-free helped create a kind of “halo” effect that enabled the country to pursue other progressive measures? There is no way to know for sure what the country would have been like had it gone the traditional militarization route of other countries in the neighborhood. Nonetheless, the likelihood is overwhelming that it isn’t mere coincidence that Costa Rica has the highest literacy rate, best medical care, largest proportion of its land area preserved in national parks and reserves in Central America, and is by many standards, a ‘first world’ country in a ‘third world’ geographic region.

Are the people of Costa Rica proud that their nation has so spectacularly bucked the grim trend towards weaponization in the Americas? They are extraordinarily aware of it, and very proud. It certainly is a key ingredient to what Costa Ricans call the “Pura Vida” life. So, if you are a World Cup Soccer fan and are looking for an underdog to play the role of “David” against the rest of the “Goliaths,” Costa Rica could be just what you have been looking for.

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Important Eco Steps for Costa Rica

 2014 Projected To Be A Good Year For Costa Rica Real Estate Investment, The Costa Rica News
by: Mark Venegas,
Real Estate Consultant

  
Here’s some very good news for those of us that are interested in making our homes more eco-friendly. The ARESEP (Autoridad Reguladora de Servicios Públicos) has sent out the order, to all of the companies in Costa Rica that distribute electricity, to provide to their customers what is referred to as “grid-connection rights and net-metering privileges,” for solar and wind production. This was published in La Gaceta in early April, and the ARESEP gave them eight months to comply; so, by mid-October, Coopeguanacaste (the company that provides electricity to our area) will need to be ready to provide this service to their customers. These electric companies, during these seven to eight months, still need to agree ABC Real Estate Costa Ricaon certain details with ARESEP, but as soon as this is done, and once you have presented the needed application, they will, at no charge to you, replace your old meter for the new bi-directional meter, which will have the capability of net-metering. This means that when you are producing “extra” electricity it is sent back into the grid and you are credited for it. The new meter monitors the imported electricity (purchased) and the exported (credits) and then “nets” them for your monthly bill.

The rich and radiant sun we all enjoy in Guanacaste can now be efficiently used to lighten that monthly electric bill. Combined with solar water heaters, already used here for years by many, you can lighten the load even more. If you haven’t been too eco-minded in the past, maybe this is the time to do so, you’ll be helping the environment and your pocket at the same time.

 

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New Obligations for Real Estate Developers Regarding Future Sales/Presales:

This info is from BLP Abogados Costa Rica  www.blplegal.com

(versión español mas abajo)
develop

MANDATORY REGISTRATION DUE 3/21 /2014

As a direct consequence of the amendment to the Law on the Promotion of Competition and Effective Consumer Defense (N°7472) of October 5th,2012, Decree 37899-MEIC was published, containing  an integral amendment to the Regulations of such Law; thus modifying a large number of matters, including mandatory registration of real estate developers and obligation to get pre-approval of option and sales contracts, where buyers are required to make payments before completion and delivery of the project/unit (future sales). Registration of Companies responsible for future sales must be completed by Friday, March 21st, 2014. Please see the information below for a description of the new provisions for future sales of Real Estate.

I.    IMPORTANT REFORMS

A.    New provisions for future sales

The new Regulation includes the minimum provisions required for future sales; and establishes the obligation for real estate development companies to obtain the proper authorization and their duty to perform their registration before the Consumer Support Office (“DAC” for its acronym in Spanish).  The real estate development companies issuing future sales will become part of the List of Registered Companies maintained by the DAC.

The new rules apply to contracts entered into with final consumers for the future sale of: a) all types of goods such as real estate, apartments and houses; b) memberships or affiliations in programs such as vacation plans, vacation clubs or similar structures; and c) unbuilt real estate developments such as social and tourism centers and urbanizations and/or condominiums.

Contracts regulated by these amended Regulation will be those in which performance by seller/developerdepend on a future event.  A contract for future sale that depends on a future event, is defined as one where a buyer and a seller execute a contract for the purchase of a good, service and/or development on a certain date, but such good, service or development is completed, provided and/or delivered to buyer on a later date. Moreover, the obligation to complete/provide/deliver the good, service and/or development is assumed by seller.

The other element to fall into this category for the application of the new provisions is that the transaction is structured through an installment plan, where buyer is required to make partial deposits and payments to seller/developer before the real estate project is completed and transfer of title takes place.  The registration filing therefore needs to include the plan for future sale of goods, services and/or developments (including presale of real estate units).

B.    Approval of contract templates for future sales

A draft version of the intended contract for future sales, including the installment payment plan, must be submitted to the DAC for its approval. The DAC will review the contract template in order to determine if there are abusive or unconscionable provisions such as those that would:  a) restrict consumer’s statutory rights; b) exonerate seller from the payment of damages; c) grant unproportionate benefits to seller or d) allow seller to unilaterally modify the contract. Moreover, the DAC will review the draft of the contract to guarantee the proportional relation between the payments being made by buyer and the terms and conditions of the contract.  A list of minimum contents for the contract is included in the Regulation.

C.    Fines and other penalties

If future sales are performed without authorization, a complaint may be filed before the National Consumer Commission that may: issue a precautionary measure to cease the future sales; refer the case to the Prosecutor Office; and impose a fine.  The administrative ruling of the precautionary measure will be comunicated to the appropiate Municipality, the Ministry of Public Safety and the Ministry of Heath.

The administrative fine that may be imposed by the current Consumer Protection statute could amount to up to forty (40) minimum wage salaries for these type of events.  As the minimum wage is approximately US$417, the maximum fine could roughly be US$16,680.

D.    Stages

The Regulation establishes the special requirements needed for:

1.    FIRST STAGE:  Registration of the developer (to be completed on or before Friday, March 21, 2014), and

2.    SECOND STAGE:  Obtention of the authorization to be able to offer future sales, as well as the obligation to provide evidence of “economic solvency”, or a guarantee, if the solvency cannot be fulfilled.

II.    REQUIREMENTS

Below is the list of information required to comply with both stages.

FIRST STAGE
(Due Date: Friday, March 21, 2014)
Requirements to Register the Company Responsible for the Future Sales.
•    The real estate developers or the entity responsible of the future sales of the real estate development must be registered at the Consumer Support Office (“DAC” for its acronym in Spanish), which part of the Ministry of Economy, Industry and Commerce (“MEIC” for its acronym in Spanish)
•    This registration must be only done once.
Action
1    Indicate address and e-mail for notifications.
2    Copy of the identification document of the legal representative (s).
3    Copy of the power of attorney or similar document that authorizes the legal representative to act on behalf of the company.
4    Corporate Certificate (in case of being a developer or corporation), with a validity of no more than three months.
5    Be up-to-date with its obligations with the Costa Rican Social Security. (“CCSS” for its acronym in Spanish).
6    Be registered at the Tax Administration and submit the tax return form of last fiscal year.
7    If what is offered depends upon a third person, then the original and copy of any commercial contract or agreement must be submitted to support the plan offered.

SECOND STAGE
(This stage must be completed prior to the offering of the Future Sales)
Authorization of the Future Sales.

***PLEASE TAKE INTO ACCOUNT THAT THE FUTURE SALES ALREADY SIGNED PRIOR TO THE EFFECTIVE DATE OF THE REGULATION MUST BE ADAPTED TO THE GUIDELINES PROVIDED BY MEIC.
Action
1    Fill Application IV.  In this application,  the requested information includes:

(i) Geographical location of the project to develop.
(ii) Number of residential units offered and types of plan.
(iii) Range of prices of the residential units.
(iv) The term to formalize the sale or deliver the residential unit.
(v) Percentage of contribution requested by the responsible of the plan and relationship between the price of the unit and possible forms of payment.
(vi) Indicate if there will be any kind of guarantee and its type.
(vii) Indication of the treatment given to the down payments of the consumers, in the case these payments have to be returned.
2    Certified copy (by a notary public) or original and copy to be confronted of the contract that will be submitted to the Engineers and Architects Board (“CFIA” for its acronym in Spanish).
3     Copy of models of contracts offered to the consumer.
4    Evidence of economic solvency of the entity responsible for the plan or the developer, as indicated in regulation N°37899-MEIC.
5    Financial detail of the origin of the funds.
Evidence of Economic Solvency
The economic solvency of the developer or the responsible of the plan must be demonstrated along with the Authorization Application of the respective plan, by complying with one the following alternatives:
a)    A bank certification or any other document with the same legal force whereby the entity responsible for the plan demonstrates the percentage that will be financed by the financial institution.
b)    If the Project does not apply to any bank financing, an accountant certification of an authorized public accountant should be filed indicating the following terms: i) that the entity responsible for the sales plan, the developer, or its partners, have enough equity for the carrying out of the project; or ii) that the entity responsible for the plan has open lines of credit that can be used for this purpose. Furthermore, the entity responsible for the plan will be required to render an affidavit that validates the statements indicated by the accountant.
In any of the above, the entity responsible for the plan or the developer, must file a certification that indicates the percentage of the project that will be financed by the contributions of the consumers (buyers).
About the Guarantee
The entity responsible for the plan or the Developer that fail to comply  with the requirements for the economic solvency demonstration, must grant a certification issued by a financial entity, that indicates the financial method that the project will use for the management of the down payments and other sums of money expected as contributions received by consumers. The methods to be used can be trusts or down payment management plans established for this purpose. Alternatively, an insurance bond can be used for these purposes.

III.    OUR SERVICES

BLP has professionals specializing in these areas, who can provide advice and legal counsel for the registration of the developer and the obtention of the of the authorization to be able to offer future sales.

Version Español:

Nuevas obligaciones para desarrolladores inmobiliarios para la venta a plazo de bienes inmuebles

REGISTRO OBLIGATORIO AL 21 DE MARZO DEL 2014

Como consecuencia directa de la reforma a la Ley de la Promoción de la Competencia y Defensa Efectiva del Consumidor (N°7472) del 05 de Octubre del año 2012, se publicó el Decreto 37899-MEIC, el cual contiene una reforma integral al Reglamento a dicha Ley, modificandose así numerosos temas, incluyendo el registro obligatorio de desarrolladores inmobiliarios y la obligación de obtener una pre-aprobación de los contratos de opción de compra, en los cuales se les solicita a los compradores efectuar pagos previo a la terminación y entrega del proyecto o unidad (ventas a plazo). Favor revisar la información que se detalla a continuación, en donde se describen las nuevas disposiciones para las ventas a plazo de bienes inmuebles.

I.    REFORMAS RELEVANTES

A.    Nuevas disposiciones para ventas a plazo de bienes o de ejecución futura de servicios

El nuevo Reglamento contiene las disposiciones mínimas que deben tener  los planes de ventas a plazo, establece la obligación para los desarrolladores de obtener su debida autorización, así como el deber para estos de realizar su inscripción ante la Dirección de Apoyo al Consumidor (“DAC”).  Aquellos desarrolladores que emitan planes de ventas a plazo pasarán a formar parte del Registro de Empresas que llevará esa Dirección.

La nueva regulación aplica en contratos suscritos con consumidores finales en ventas a plazo de: a) todos los tipos de bienes como bienes raíces, apartamentos y casas; b) membresías o afiliaciones en programas como planes vacacionales, clubes vacacionales o estructuras similares; y c) desarrollos inmobiliarios que no han sido construidos aún como centros turísticos y sociales, urbanizaciones y/o condominios.

Los contratos regulados por las modificaciones de este Reglamento serán aquellas en las cuales la actuación del vendedor/desarrollador dependa de un evento futuro.  Un contrato de ventas a plazo que depende de un evento futuro, se define como aquel en el cual el comprador y el vendedor celebran un contrato para la compra de un bien, servicio y/o desarrollo en una fecha cierta y determinada, pero ese bien, servicio o desarrollo estará completo, será proveído y/o entregado al comprador en una fecha posterior.  Además, la obligación de completar/proveer/entregar el bien, servicio y/o desarrollo es asumida por el vendedor.

El otro elemento que entra en esta categoría para la aplicación del nuevo Reglamento es que la transacción se estructura por medio de un plan de ventas a plazo, en el cual se requiere que el comprador efectue depósitos parciales y pagos al vendedor/desarrollador de previo a que el desarrollo se encuentre finalizado y la transferencia de título ocurra.

Por lo tanto, la solicitud de registro debe de incluir el plan de ventas a plazo de bienes, servicios y/o desarrollo (incluyendo la preventa de unidades habitacionales).

B.    Aprobación de modelos de contratos de ventas a plazo

Un borrador de la versión del contrato destinado a ventas fututas, incluyendo el plan de ventas a plazo, deberá ser presentado ante la DAC para su aprobación.  La DAC revisará el modelo del contrato para determinar si hay claúsulas abusivas o excesivas que: a) restrinjan los derechos del consumidor; b) exoneren al vendedor del pago de daños y perjuicios; c) concedan beneficios desproporcionados al vendedor; d) permitan al vendedor modificar unilateralmente el contrato.  Además, la DAC revisará el modelo de contrato para garantizar la relación proporcional entre los pagos realizados por el comprador y los términos y condiciones del contrato.  Un listado del contenido mínimo del contrato se incluye en el Reglamento.

C.    Multas y otras sanciones

En caso de ventas de contratos de planes de ventas a plazo de bienes o ejecución futura de servicios sin autorización, se procederá a la interposición de una denuncia ante la Comisión Nacional del Consumidor la cual: procedera cautelarmente a la suspensión de la venta de planes de venta a plazo o de prestación futura de servicios; remitirá el caso al Ministerio Público, e impondrá la multa respectiva. La resolución administrativa que resuelva la medida cautelar deberá ser comunicada a la Municipalidad del lugar, al Ministerio de Seguridad Pública y al Ministerio de Salud.

La multa administrativa que podría ser impuesta por la Ley de Promoción de la Competencia y Defensa Efectiva del Consumidor será de hasta cuarenta (40) salarios base para este tipo de eventos.  En la actualidad el salario mínimo es de US$487 y la multa máxima  puede llegar a ser de US$16,680.

D.    Etapas

1.    PRIMERA ETAPA: Registro del desarrollador (a ser completado a más tardar el Viernes 21 de marzo del 2014) y
2.    SEGUNDA ETAPA: Autorización del plan de ventas a plazo, así como las obligaciones de demostrar la solvencia económica o de rendir garantía en caso de que no se cumpla con dicha solvencia.

II.    REQUISITOS

A continuación encontrarán el listado de información requerida para completar ambas etapas.

PRIMERA ETAPA
(Fecha de Vencimiento: viernes 21 de marzo 2014 –
La entrada en vigencia sería el domingo 23 de marzo 2014)

Requisitos para el Registro del Responsable del Plan
•    Las empresas desarrolladoras inmobiliarias o los responsables del plan de ventas a plazo o prestación futura de servicios de desarrollo, deberán inscribirse ante el Ministerio de Economía, Industria y Comercio (“MEIC) en la Dirección de Apoyo al Consumidor (“DAC”).
•    Este trámite se hará por una única vez.
Acción
1.        Indicar medio para atender notificaciones.
2.        Copia del documento de identidad del representante legal.
3.        Copia del poder o documento que autorice al representante o apoderado (si es del caso).
4.        Personería jurídica (en el caso de ser una empresa desarrolladora o entidad), la cual deberá tener una vigencia no mayor a tres meses de emitida.
5.        Encontrarse al día con sus obligaciones ante la Caja Costarricense del Seguro Social (“CCSS”).
6.        Inscripción ante Tributación Directa y presentación de la última declaración de renta ante el Ministerio de Hacienda.
7.        Si lo ofrecido recae en una tercera persona se deberá de presentar original y copia de los acuerdos, convenios o vínculos comerciales que respalden el plan ofrecido.

SEGUNDA ETAPA
(Deberá completarse esta etapa de previo a la venta de planes)
Autorización de plan o planes de ventas a plazo de bienes inmuebles.

***TOMAR EN CUENTA QUE LOS PLANES YA FIRMADOS ANTES DE LA ENTRADA EN VIGENCIA DEL REGLAMENTO, DEBERÁN ADECUARSE A LOS LINEAMIENTOS ESTIPULADOS POR EL MEIC.

Acción
1.        Completar Formulario IV. En este formulario se solicitan datos como la (i) ubicación geográfica del proyecto a desarrollar, (ii) número de unidades que se ofrecen y tipos de planes, (iii) rango de precios de los bienes inmuebles, (iv) plazos para formalizar la venta o entrega del bien, (v) porcentaje solicitado de aporte al consumidor por parte del responsable del plan en relación al precio del bien y posibles formas de pago, (vi) indicación de si rinde garantía y la forma en la que se hará, (vii) indicación del tratamiento de las sumas de dinero solicitadas como aportes del consumidor, en caso de que las mismas deban devolverse.
2.        Copia certificada por notario público u original y copia para ser confrontada del contrato que se presenta ante el Colegio Federado de Ingenieros y Arquitectos de Costa Rica
3.        Copia de los modelos de contrato de bienes inmuebles ofrecidos al consumidor.
4.        Demostración de la solvencia económica del responsable del plan o desarrollador inmobiliario, de acuerdo a lo indicado en el Reglamento N°37899-MEIC.
5.        Detalle del financiamiento según el origen de los fondos.
Comprobación de la solvencia económica
La solvencia económica del responsable del plan o desarrollador inmobiliario se demostrará junto con la solicitud de autorización del plan respectivo, mediante el cumplimiento de una de las siguientes alternativas:
a)        Una certificación bancaria u otro documento con idéntico valor jurídico mediante el cual el responsable del plan demuestre el porcentaje a ser financiado por la entidad financiera.

b)        En caso de que el proyecto inmobiliario utilice fondos que no provengan de un financiamiento bancario, deberá presentar una certificación de Contador Público Autorizado, que demuestre que el responsable del plan o la empresa desarrolladora inmobiliaria, o sus socios, cuentan con el capital suficiente para hacer frente a la ejecución del proyecto o en su defecto, que los responsables del plan cuentan con líneas de crédito abiertas que puedan ser utilizadas para tal fin. Asimismo, se deberá presentar una declaración jurada por parte del o los responsables del plan, que valide lo indicado por el contador.

En cualquiera de los supuestos anteriores, se deberá contar con una certificación que indique el porcentaje del total que será financiado con los aportes del consumidor en el proyecto.

Sobre la Garantía
El o los responsables del plan o desarrolladores inmobiliarios que no cumplan con lo requerido en la comprobación económica, deberán presentar como garantía una constancia o certificación emitida por una entidad financiera, que haga constar el método financiero que tiene el proyecto para el manejo de las primas y sumas de dinero que se reciban como aportes por parte de los consumidores. Estos métodos pueden ser fideicomisos o planes de manejo de primas, establecidos para tal fin. También, se podrá utilizar la figura del seguro.

III.    NUESTROS SERVICIOS

BLP cuenta con profesionales especialistas en la materia, para brindar asesoría y consejo legal respecto del registro del desarrollador así como para la obtención  de la autorización del plan de ventas a plazo.

New Obligations for Real Estate Developers Regarding Future Sales/Presales:

 

MANDATORY REGISTRATION DUE 3/21 /2014

 

As a direct consequence of the amendment to the Law on the Promotion of Competition and Effective Consumer Defense (N°7472) of October 5th,2012, Decree 37899-MEIC was published, containing  an integral amendment to the Regulations of such Law; thus modifying a large number of matters, including mandatory registration of real estate developers and obligation to get pre-approval of option and sales contracts, where buyers are required to make payments before completion and delivery of the project/unit (future sales). Registration of Companies responsible for future sales must be completed by Friday, March 21st, 2014. Please see the information below for a description of the new provisions for future sales of Real Estate.

I.                 IMPORTANT REFORMS

A.     New provisions for future sales

 

The new Regulation includes the minimum provisions required for future sales; and establishes the obligation for real estate development companies to obtain the proper authorization and their duty to perform their registration before the Consumer Support Office (“DAC” for its acronym in Spanish).  The real estate development companies issuing future sales will become part of the List of Registered Companies maintained by the DAC.

The new rules apply to contracts entered into with final consumers for the future sale of: a) all types of goods such as real estate, apartments and houses; b) memberships or affiliations in programs such as vacation plans, vacation clubs or similar structures; and c) unbuilt real estate developments such as social and tourism centers and urbanizations and/or condominiums.

Contracts regulated by these amended Regulation will be those in which performance by seller/developerdepend on a future event.  A contract for future sale that depends on a future event, is defined as one where a buyer and a seller execute a contract for the purchase of a good, service and/or development on a certain date, but such good, service or development is completed, provided and/or delivered to buyer on a later date. Moreover, the obligation to complete/provide/deliver the good, service and/or development is assumed by seller.

The other element to fall into this category for the application of the new provisions is that the transaction is structured through an installment plan, where buyer is required to make partial deposits and payments to seller/developer before the real estate project is completed and transfer of title takes place.  The registration filing therefore needs to include the plan for future sale of goods, services and/or developments (including presale of real estate units).

B.     Approval of contract templates for future sales

A draft version of the intended contract for future sales, including the installment payment plan, must be submitted to the DAC for its approval. The DAC will review the contract template in order to determine if there are abusive or unconscionable provisions such as those that would:  a) restrict consumer’s statutory rights; b) exonerate seller from the payment of damages; c) grant unproportionate benefits to seller or d) allow seller to unilaterally modify the contract. Moreover, the DAC will review the draft of the contract to guarantee the proportional relation between the payments being made by buyer and the terms and conditions of the contract.  A list of minimum contents for the contract is included in the Regulation.

C.     Fines and other penalties

If future sales are performed without authorization, a complaint may be filed before the National Consumer Commission that may: issue a precautionary measure to cease the future sales; refer the case to the Prosecutor Office; and impose a fine.  The administrative ruling of the precautionary measure will be comunicated to the appropiate Municipality, the Ministry of Public Safety and the Ministry of Heath.

The administrative fine that may be imposed by the current Consumer Protection statute could amount to up to forty (40) minimum wage salaries for these type of events.  As the minimum wage is approximately US$417, the maximum fine could roughly be US$16,680.

D.     Stages

The Regulation establishes the special requirements needed for:

1.                FIRST STAGE:  Registration of the developer (to be completed on or before Friday, March 21, 2014),and

2.                SECOND STAGE:  Obtention of the authorization to be able to offer future sales, as well as the obligation to provide evidence of “economic solvency”, or a guarantee, if the solvency cannot be fulfilled.

II.               REQUIREMENTS

Below is the list of information required to comply with both stages.

 

FIRST STAGE

(Due Date: Friday, March 21, 2014)

Requirements to Register the Company Responsible for the Future Sales.

·        The real estate developers or the entity responsible of the future sales of the real estate development must be registered at the Consumer Support Office (“DAC” for its acronym in Spanish), which part of the Ministry of Economy, Industry and Commerce (“MEIC” for its acronym in Spanish)

·        This registration must be only done once.

Action

1

Indicate address and e-mail for notifications.

2

Copy of the identification document of the legal representative (s).

3

Copy of the power of attorney or similar document that authorizes the legal representative to act on behalf of the company.

4

Corporate Certificate (in case of being a developer or corporation), with a validity of no more than three months.

5

Be up-to-date with its obligations with the Costa Rican Social Security. (“CCSS” for its acronym in Spanish).

6

Be registered at the Tax Administration and submit the tax return form of last fiscal year.

7

If what is offered depends upon a third person, then the original and copy of any commercial contract or agreement must be submitted to support the plan offered.

SECOND STAGE

(This stage must be completed prior to the offering of the Future Sales)

Authorization of the Future Sales.

 

***PLEASE TAKE INTO ACCOUNT THAT THE FUTURE SALES ALREADY SIGNED PRIOR TO THE EFFECTIVE DATE OF THE REGULATION MUST BE ADAPTED TO THE GUIDELINES PROVIDED BY MEIC.

Action

1

Fill Application IV.  In this application,  the requested information includes:

(i) Geographical location of the project to develop.

(ii) Number of residential units offered and types of plan.

(iii) Range of prices of the residential units.

(iv) The term to formalize the sale or deliver the residential unit.

(v) Percentage of contribution requested by the responsible of the plan and relationship between the price of the unit and possible forms of payment.

(vi) Indicate if there will be any kind of guarantee and its type.

(vii) Indication of the treatment given to the down payments of the consumers, in the case these payments have to be returned.

2

Certified copy (by a notary public) or original and copy to be confronted of the contract that will be submitted to the Engineers and Architects Board (“CFIA” for its acronym in Spanish).

3

Copy of models of contracts offered to the consumer.

4

Evidence of economic solvency of the entity responsible for the plan or the developer, as indicated in regulation N°37899-MEIC.

5

Financial detail of the origin of the funds.

Evidence of Economic Solvency

The economic solvency of the developer or the responsible of the plan must be demonstrated along with the Authorization Application of the respective plan, by complying with one the following alternatives:

a)

A bank certification or any other document with the same legal force whereby the entity responsible for the plan demonstrates the percentage that will be financed by the financial institution.

b)

If the Project does not apply to any bank financing, an accountant certification of an authorized public accountant should be filed indicating the following terms: i) that the entity responsible for the sales plan, the developer, or its partners, have enough equity for the carrying out of the project; or ii) that the entity responsible for the plan has open lines of credit that can be used for this purpose. Furthermore, the entity responsible for the plan will be required to render an affidavit that validates the statements indicated by the accountant.

In any of the above, the entity responsible for the plan or the developer, must file a certification that indicates the percentage of the project that will be financed by the contributions of the consumers (buyers).

About the Guarantee

The entity responsible for the plan or the Developer that fail to comply  with the requirements for the economic solvency demonstration, must grant a certification issued by a financial entity, that indicates the financial method that the project will use for the management of the down payments and other sums of money expected as contributions received by consumers. The methods to be used can be trusts or down payment management plans established for this purpose. Alternatively, an insurance bond can be used for these purposes.

III.              OUR SERVICES

BLP has professionals specializing in these areas, who can provide advice and legal counsel for the registration of the developer and the obtention of the of the authorization to be able to offer future sales.

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2 Comments

Costa Rica, a Mature Democracy

 2014 Projected To Be A Good Year For Costa Rica Real Estate Investment, The Costa Rica Newsby: Federico Fernández, Real Estate Consultant

Recently, several foreigners—both resident and non-resident—have asked me as Costa Rican about the presidential election process that took place last February and, due to the required second round voting, is still going on. Regardless of the results or political tendencies present or dominant, I hope the following summary will answer your questions.

Presidential and legislative branch elections are due every four years in Costa Rica. That is why 2014 is an election year. Elections have been done this way uninterrupted since the current Constitution was created in 1949. Currently, presidents, vice presidents and 57 representatives to the ¨Asamblea Legislativa¨ (Congress) are elected. Election day is always the first Sunday of February. Everything is organized and supervised by the ¨Tribunal Supremo de Elecciones,¨ which is equivalent to the Federal Election Commission in the United States. This entity makes sure everything is done transparently, supervises propaganda, organizes official debates, attends any claims presented by political parties and citizens, and is later responsible for delivering the results. 80,000 citizens worked Sunday, February 2nd, to provide assistance in the activity.

Out of a population of 4,301,712, there are 3,078,321 registered voters for 2014. Voting centers all over the country assure access to each of them, even in the most remote locations such as Indian reservations and Isla del Coco (Cocos Island), located 332 miles away from the mainland. On this island, 28 park rangers are enrolled as voters. There are also voting centers in prisons and senior citizen homes. This year was the first time that Costa Rican citizens abroad could exercise their right to vote. More than 12,000 Costa Ricans were enrolled in consulates all over the world. International observers from 50 countries were impressed by how well done this was.

The final result was that none of the candidates for the first two political parties—the officialist PLN (Partido Liberación Nacional) and the social democrat PAC (Partido Acción Ciudadana)—attained 40% of the votes. Hence, a second round election is to be held in April. Later, Johnny Araya, candidate for PLN announced his withdrawal from the active participation in the second round election. So, it is self-evident that Luis Guillermo Solís, candidate for the PAC, shall become the next president on Sunday April 6th, becoming the first president from this party.

This solid democracy is just one of the key advantages to living and investing in Costa Rica.

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The Case for Costa Rica

 2014 Projected To Be A Good Year For Costa Rica Real Estate Investment, The Costa Rica News
by: Jason Clements, Real Estate Consultant

As one of the most economically and politically stable countries in Latin America, Costa Rica is viewed as a safe bet. We will examine below why now is the best time to get a slice of the action. From its political to natural landscape, there are many reasons why Costa Rica is viewed by investors as one of the safest emerging markets to expand their real estate portfolio. Its exports remain strong, tourism numbers are at record level, and the country has one of the highest levels of foreign direct investment per capita in Latin America.

The financial crisis did have an impact on the market, but prices have stabilized in recent years. Foreign investors have been capitalizing on this particular market of late, with purchasing activity already up 14 per cent in the first quarter of 2013, compared to the same period last year. Economically, Costa Rica’s GDP is expected to rise, which will fuel investor interest. The IMF indicates that the GDP will increase by 4.2 per cent in 2013 and 4.4 per cent in 2014.

In the aftermath of the global crisis, overinflated real estate prices dipped to more realistic and fair market values. Interest for purchasing real estate in Costa Rica has steadily increased the last few years, especially with the newly renovated Daniel Oduber Quirós International Airport in Liberia, providing easy access to the Guanacaste region. The demand for short-term vacation rentals in the area continues to lure foreign investors looking for income producing properties. As the US economy continues to rebound from its recession, we continue to see more American Buyers reengaging in foreign markets.

There have also been an increasing number of Canadian and European Investors buying land and businesses in Costa Rica to build their own businesses. Guanacaste seems to have become a hub of foreign entrepreneurs looking to develop their own businesses abroad. This diverse mixture of property and business owners in the Tamarindo area is what drives the local economy and continues to attract the adventurous from all around the world. Long-term investments will yield the best results; so, as the market has now found its footing, now is the time to act.

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Foreign Influence

 2014 Projected To Be A Good Year For Costa Rica Real Estate Investment, The Costa Rica News
by: Mark Venegas,
Real Estate Consultant

On a much lighter but interesting note, induced basically by foreign influence, is how the names of different beaches have been “changed.” Here are a couple examples of beaches in the North Pacific, and their real names.

  • The stretch of rocky beach between Punta San Francisco, Tamarindo, and the Barceló Hotel is mistakenly call Langosta by many. Playa Langosta actually starts on the other side of the estuary where Hacienda Pinilla begins. The real name of this stretch: Barco Quebrado.
  • Playa Flamingo. Real name: Playa Blanca.
  • Sugar Beach. Real name: Pan de Azucar.
  • Bahia Piratas. Real name: Playa Real.
  • A famous surf spot in the beautiful National Park of Santa Rosa that many call Witch’s Rock is actually on Playa Naranjo and the big rock island in front of it is what is called Witch’s Rock, or Roca Bruja.

The examples can go on and this will probably continue, but no worries, Pura Vida.

No Comments

Promising 2014

 2014 Projected To Be A Good Year For Costa Rica Real Estate Investment, The Costa Rica News
by: Mark Venegas,
Real Estate Consultant

In past articles, we have talked about different aspects of the local market and it’s slow but steady recovery. Of course, there are many variables that directly and indirectly affect the Costa Rican Real Estate market, but predominately, especially here on the coast, we are most influenced by what happens in the USA. The slow but consistent increase in sales here can be reflected from the agonizing but sound recovery in the US. As the US potential buyers become more confident in the US economy they have returned to viewing our coast as a reliable and politically stable place to invest. We are also benefiting from an increase in clients from Europe.

Throughout this recovery, and more noticeably a bit over a year ago, these couples, families and investors have been trickling down here and buying up properties, mostly from distressed sellers, but also from many of the prime properties. We are beginning to experience a delayed effect from the past recession where we went through a period of around three years where no new homes, etc., were built here. This, along with the recent spurts of sales, is reducing the quality inventory in our area. There are still some very nice Homes and Condos available, but 2014 is already proving to be full of activity, so just how long our quality inventory will be available turns into an interesting question.

Regardless, now there are new homes and townhouses being built here and new Businesses opening in Tamarindo, allowing us to feel a confident sense of optimism for the future of this beautiful and culturally diverse town. Give us a call, or e-mail us, at ABC Real Estate and we will be happy to help you find your dream piece of the tropics.

I hope you all have a prosperous 2014.