Make Sure You're Not Buying - Moose Pasture- In Costa Rica

By 250 News

Beautiful Costa Rica,    where the beaches are clear and land is cheap        

Prince George B.C. - Flying into Costa Rica, a Prince George resident noticed people swimming and surfing in the water below. He asked of the pilot, what about sharks? The pilot replied, “The sharks that you have to worry about the most in Costa Rica are the ones that are selling you land.”

There are a multitude of developments going on in that country and as a high ranking RCMP officer commented recently, “It’s a case of buyer beware.”  He recalled how there was once a time that there was a never ending supply of,”moose pasture”, in Canada. “People from all over the world were taken in with offers of cheap land in the country of plenty only to find out that when they arrived here they had purchased the bottom of a swamp.”

Things have changed in Canada over the years but the lure of lots of sun and sandy beaches has been just too much for many Canadians who have bought their piece in a foreign land only to discover they own a small lot on the side of a mountain that may never ever be developed.

A few weeks ago Opinion250 wired up a reporter to hear the pitch from a company in Costa Rica. We are not suggesting for a moment that Costa Developers doesn’t have the best of intentions, we are sure they do, the problem is the lack of safe guards in place that will ensure the property that you buy will see services provided such as water, sewer and other services.

Costa Developers under Costa Rican law does not have to provide these services before selling properties in proposed subdivisions. In Canada, in order to sell lots to perspective buyers, you must either post a bond saying you will perform the work of providing roads, sewer, water and other services.  Opinion250 could not find any such law in Costa Rica, it would appear you are virtually at the mercy of the developer. The developer may be very sound finically today but as we all remember so was Enron in the hay days.

Costa Developers is in the process of selling around 1,000 lots ranging from a price of $80,000 to $225,000 dollars. The wired reporter heard a pitch for phase 4 of the project, but only 6 homes have been built in all four phases so far and how many of these are connected to the company is not known. Further, no roads or services exist in many of the phases and when asked when would they be built the answer was that Costa was a strong company with plenty of financial backing.  There were again no guarantees that you would not end up owning a goat pasture.

Monterra Tambor states on their website that they are undertaking a four phase development in Costa Rica.  The lots will range in size from .25 acre to 1.25 acres and range in price from $80,000 to $125,000 dollars. The web site says all lots, have sewer water, with roads and electricity. In order to reach your prospective lot however you must take a horse at present. A recent returning perspective buyer said “I didn’t see one single road or any other service in the area, and we had to get to the site on horse back, that should say it all.”

These companies cannot sell real estate in BC without a license so they undertake to fly you to the country, put you up in their hotel for a few days and then take you by horse back to see your purchase. The word “purchase” is used because you must sign an agreement which agrees to hold the property. In the case of the pitch to our reporter, the amount to be paid to hold the property was $30,000 dollars. That money goes into an escrow deposit holding account until the developer provides clear title on behalf of the purchaser, to the company holding the funds in escrow. Once clear title is provided the funds are transferred to the developer in Costa Rica. All other money goes direct to the developer. 

The problem is that the clear title means little unless it is accompanied by a survey plan (Castastral Depertament). Even if there is a survey plan and you may be offered ownership rights, there are no guarantees that the developer will ever put in roads or any other services. In our case we couldn’t get the sales representative to produce a sales agreement for us to read.

When considering buying land, the first question to be asked is if your are being offered ownership rights (DERECHO DE PROPIEDAD) or occupation rights (DERECHOS DE OCUPACION) In the case of occupation, you will be dealing with land that has not been registered, cannot be title searched and must go through a long process in order to be registered. Ownership rights on the other hand are registered and are equal to the concept of owning land in Canada or the USA.

You will be encouraged to take a trip to Costa Rica at the developer’s expense to see your property and of course sign the actual purchase. You couldn’t sign it in BC because that would be a BC real estate transaction and all the other conditions will need to be met.

If for some reason you don’t like your piece of paradise, you’ll get your room for three nights free in their hotel, and the horse ride will be free, but you will see $1,000 dollars taken from your deposit to pay for your flight.

The situation in Costa Rica is no different than companies operating in other countries.  For example, Mexico, where you can get some super property buys.  As in the case of buying in any foreign country, shop around.  North of Puerto Vallarta, it is possible to buy a pretty nice lay out for around $200,000 dollars which will give you a home and a nice lot on the beach.  You can also find yourself buying up some property that only a goat would find suitable on the side of a mountain for $80,000 dollars just for the lot. There are some reputable realtors operating in that part of Mexico. They key is to make sure you’re dealing with one.

If you’re looking to buy yourself a piece of paradise in Costa Rica, Mexico or in any foreign country, remember that old saying “buyer beware”. Your plans to retire in the land of the sun could quickly change to living in your existing home wondering just why you made that investment.

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