Costa Rica Beach Homes:
Buying beach property in Costa Rica and understanding the Maritime Zone.
This page offers you information about buying Costa Rica beach property. If you are looking for a beachfront property, Costa Rica has marvelous beaches and very reasonable prices. But Costa Rica has very specific regulations regarding its beach property, and anyone wanting to purchase property on the beach should understand the law. Here is a full explanation of the Maritime Zone Law that applies to beach homes and beachfront land in Costa Rica.
Beach Homes: Understanding the difference between beach property and Maritime Zone Property
To begin with, not all beach property is maritime zone property. You can purchase fully titled land in front of the beach or overlooking the beach or within walking distance to the beach and never have to worry about the Maritime Zone.
However, if you want to purchase land ON the beach, it will not be titled (as a rule). As in nearly every country in the world, Costa Rica’s beaches are public property. So, if you would like build or buy a beachfront home or business, you should familiarize yourself with the special rules regarding beach property in Costa Rica.
The Maritime Zoning Law for beach property
The 1977 Maritime Zoning Law (Ley sobre la Zona Marítimo-Terrestre - Ley Numero 6043) regulates the ownership and usage of beachfront property in Costa Rica. The law creates two zones along Costa Rica's Pacific and Atlantic coasts. Islands are also subject to this law. The national government owns this "Maritime/Terrestrial" restricted zone and local governments (municipalities) administer it. You measure from the high tide mark inland.
The two zones total a width of 200 meters along the beach:
- The Public Zone (Zone Publica): a 50 meter wide strip of beach between the high tide line and the outer line of the "Restricted Zone" (Zona Restringida). This beach zone is open to the public. Private possession or occupation of this area is strictly prohibited. However, no one may trespass private property or the restricted zone in order to reach the public zone.
- The Restricted Zone (Zone Restringida): a 150 meter wide strip of beach from the limit of the Public Zone inland. The law allows the government to grant leases called concessions for the occupation and use of this area for terms that range from 5 to 20 years. This is the beachfront land that homes or business may use for personal or monetary gain. Certain buildings are allowed in this zone, but these will revert to the municipalities (local Governments) at the termination of the lease, unless the lease is extended.
How the Concessions Work for maritime zone beach property
The National Geographic Institute (Instituto Geográfico Nacional) marks the maritime zone. If the zone is not marked and a development plan has not been drafted and approved, the authorities are unable to grant building permits for development of the area.
The Instituto Costarricense de Turismo (ICT) authorizes leases on the Restricted Zone, but the local Municipal government grants and administers the government concession for possession of land in the maritime zone. The Registry of Concessions in the Public Registry in San José records all concessions. Before a concession can be granted, the particular beach where the property is located must have an approved Zoning Plan (Plan Regulador) in place. Only the actual Concession will clearly define the rights and terms of ownership that the occupant has to the property.
These concessions or leases are granted for five to twenty year terms. Once the concession (lease) has been approved, it is registered in a special Concession Registry in the Public Registry. A yearly fee must be paid to the municipality for the duration of the lease to keep it current. Failure to pay may terminate the lease and result in the loss of any buildings on it. The lessee applies for an extension of the lease concession at the Municipality. Extensions are normally granted with the previous approval of the ICT.
Beach property restrictions
There are certain restrictions for concessions held by foreigners. If personally held, the foreigner must first have five years of legal residence in Costa Rica. For this reason, most foreigners purchase the rights to beach property by first forming a Costa Rican corporation, a simple process that takes about 30 days and can cost from $150 to $500. The cost depends upon your attorney and the characteristics of the corporation registered. Your Costa Rican corporation must have at least fifty percent of its shares held by a Costa Rican resident. Most people are not comfortable with this so at the time of closing the sale, the "token" Costa Rican shareholder, simply signs over their shares to the foreigner so that the foreigner is holding 100% of the shares. This is common practice.
Exceptions
The Maritime Zoning Law was not applied retroactively. Any shoreline property previously titled can be freely transferred. Of course this titled property is very rare. These cases are those involving rights registered in colonial times, and certain urban property on the beach. In areas where the 150 meters of restricted zone does not have an approved zoning plan (plan regulador), you may find an “arriendo”. You may occupy and develop the zone after you purchase the rights from the legal occupant. These rights are registered at the corresponding local government or municipality. There is no time limit for arriendos. Not until the land is property zoned (which may never happen!). Many beach lands have an arriendo. The arriendo allows transfer of ownership and low impact development. Building a house or small tourist project is no problem but larger projects must go through a zoning approval with the government.
Precautions Beach home and property
Although local governments will collect a land use tax known as a canon from occupants of land located in the maritime zone it does not mean that a concession has been granted. As such, the payment of a canon is simply recognition of the right to possession.
Here are other points of law you must abide by in order to safeguard your concession.
Concessions for maritime zone beach property cannot be granted to:
- Foreigners who have not been residents for five years
- Companies with bearer shares
- Foreign companies based abroad
- A company set up in Costa Rica exclusively for foreigners.
- A company with more than fifty percent foreign capital (ZM Art. 47)
Concessions on maritime zone beach property can be forfeited for the following reasons:
- Failure to apply for an extension of a concession in a timely manner
- The forfeiture of rights by the interested parties
- The death or legal absence of the concession holder with no heir
- Not abiding by the established obligations of Article 51
- Cancellation of the concession (ZM Art. 52)
The ICT can cancel a concession on maritime zone beach property for:
- Non payment of the yearly canon or royalty
- Breach of contract (e.g. use of the land for purposes other than those expressly stated by ICT)
- Violation of the ordinances of the law that grants the concession
- Impediment of the use of the public right of way
- Other causes that this law establishes (ZM Art. 53)
All in all, an investment in shoreline property regulated by the Maritime Zoning Law requires extra caution and thorough investigation. The reality is that ambiguities exist within the written law, so that as regulations are created and amended, rights to property may also change. There are no guarantees and there is no foolproof way around the law. Even if you get a concession, there are no guarantees that the concessions will be renewed or that the price of the concession or the yearly canon will be within reason. The fact remains that you are not purchasing property, you are leasing it and you must be willing to accept that risk. Also, see information about squatters in Costa Rica, because in certain cases a foreigner has made it through the concession process only to lose all or a portion of the property later to squatters. Make sure your attorney examines the Municipality Records, verifies the seller's ownership status, and also verifies general tax and leasing records. Keep in mind that if you are opening a business on the beach, it may be worthwhile for you to have a concession. But if you are looking to purchase a beach home or recreational property, then you would probably be better advised to purchase titled land outside of the Maritime Zone.
credits: _________
Post details: Environment Ministry About to Show Its Muscles
09/18/06
Beach concessions to face enforcement
By Garland M. Baker
Special to A.M. Costa Rica
The environmental ministry is about to specify where construction can go within the borders of beach concessions.
Even though an individual or a firm may already have an approved concession, the ministry is ready to rule out construction in forest land, land with steep slopes and wetlands.
And the ministry may initiate destruction of structures that already have been built on land that is now being declared off limits. In some concession areas 60 to 70 percent of the land is being safeguarded by the environmental ministry.
[More:]
What is involved is a reevaluation of the rules that govern the maritime zone, the 250 meters above mean high tide. Anything built illegally — from small structures to hotels — can be in the way of the law.
Legal battles can postpone the inevitable but not delay fate forever. The Mar y Sombra restaurant bit the dust in August after a lengthy, futile legal battle due to its location in the maritime zone, although that was a municipal case.
The first maps are out and it appears the ministry already knows what the decision will be in a case that is sitting on a magistrate’s desk at the Sala IV constitutional court awaiting signatures.
The case, number 04-005607-0007CO, is the famous action that stopped concession granting in the maritime zone in 2004 because of outcries against Executive Decree 31750-MINAE-TUR.
The decree would have allowed the construction of buildings up to 14 meters high and permitted the logging of forest areas to make way for “ecotourism” projects.
The decree would have legalized the range of impacts that tourism projects would have had on forests: allowing the cutting of trees up to 15 percent of the concession area in primary forests, and 25 percent in secondary forests.
The amazing part of all this is many tourism developments are already built in restricted areas of the maritime zone with permissions given to them from local municipalities and approvals from the Instituto Costarricense de Turismo. But they lack approval from the Ministerio de Ambiente y Energía, which until now has not taken an active role.
In some cases where building took place in restricted areas of forest zones, the approvals directly conflict with the forestry law and are illegal. A case in fact, is Proyecto Playa Dulce Vida where the company cut down the forest to build its development. The freezing of the permissions arrived too late to stop the destruction.
Proyecto Playa Dulce Vida on the central Pacific coast is just one example of the many areas restructured by developers before the environmental ministry could get its act together to stop them.
Quite by accident, the executive decree spotlighted the already existing activities, and, by doing so, triggered anger at the ministry which lead to the constitutional case.
The hoopla is not about the forest. It is about power. The environmental ministry felt trumped by the executive decree. The decree usurped Forest Law 7575 where the environmental ministry is the only institution in the country to determine what is forest and what is not, ministry workers decided.
Law 7575 permits zero development in restricted forest areas. The criteria determining these zones include tree density and size along with the slope of the land.
The labor union syndicate of the ministry filed the constitution case with the Sala IV. They were protecting their jobs and recognized the warning signs that the ministry was about to lose power. The syndicate surely will win the case, and the executive decree will be voided, thus reinstating the ministry’s power as king over these lands.
Environmental ministry workers must know this because they are out in force inventorying the entire country’s maritime zone to determine what are concessionable areas within these restricted territories. In a concession, a private company leases public land for private use including ventures for profit. Many major hotels and other developments are constructed on concession land.
When the smoke clears and the power struggle is over with executive decree of 2004 rescinded, what is going to happen to developers who built in restricted areas of the maritime zone?
Recent events reflect that the country will stop at nothing to protect the maritime zone because the area is part of the public trust and the legislature, courts, and ministries must defend it at all costs for the people of Costa Rica.
Structures existing for years are falling to the wrecking balls of today. A victory for the ministry in the Sala IV case is sure to trigger other, similar demolitions.
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