Costa Rica Beach Property – How It Works
Part 2 of 3 – condensed version
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Part 2 of 3 – Costa Rica’s beach lands are governed under special circumstances which are much different than titled property, the corresponding law spelling things out clearly although there is plenty of disinformation spread around this subject which is confusing. Reference – the Maritime Zone Law or Ley Zona Maritima Terestre 6043, commonly called the “concession law” which was established in 1977. The intention of the law at the time was in three parts.
- First, to declare certain sectors of the coastline as having the highest touristic aptitude and at the same time declaring that all beaches are public.
- Second, to create and adopt zoning for these declared areas with a land use framework or Regulatory Plan – Plan Regulador.
- Third, to task the corresponding state institutions with granting development rights to individuals or companies to develop areas destined for specific tourist activities by way of concession contracts.
The land comprising the Maritime Zone is owned by the state and jointly administered by the local Municipality and the National Tourism Institution (ICT) and is defined as the 200 meter strip of land along the coastline measured from the average high tide. This 200 meter zone is comprised of two parts – the first 50 meters from the average high tide is public domain or public zone and cannot be claimed by anyone. The adjoining 150 meter strip of land is called the restricted zone where third parties can solicit exclusive usage by the simple act of filing an application at the local Municipality. If the applicant meets the requirements they are granted temporary usage and eventual “first right to the concession” with the ability to develop the property according to the adopted zoning plan.
Surprisingly, the majority of Costa Rica’s coastline is still un-zoned to this day, lacking an approved Regulatory Plan. Here in the Osa Peninsula there are only four sectors having an approved Regulatory Plan (partial only) – Puerto Jimenez, Playa Platanares, Playa Sombrero and Cañaza.
All Regulatory Plans have clearly defined areas zoned for touristic type development, both commercial and residential and set aside areas for green zones, roads and access as well as public use areas for parking, bathrooms or other services.
In the un-zoned (and without concession) sectors of coastline countrywide, local Municipalities have had to adopt a provisional policy to address the occupation of individuals and subsequent building under the premise that at some point in the future a Regulatory Plan will be implemented. To be sure these evolving policies have caused a lot of confusion and spread of misinformation. Until a specific section of coastline has an approved Regulatory Plan, usage and development is limited. Municipal administration is strictly an interim policy for the purpose of organizing applicants on a provisional basis. An inventory of occupation more or less. More details on how this works is in the full guide on this website.
Once a Regulatory Plan is approved, the pending concession applications can then be processed in accordance to the zoning. Concessions for residential and tourist projects are renewable in perpetuity for periods of a minimum of 5 years with a maximum of 20 years assuming compliance to the terms of the concession contract which basically are to respect the public zone, pay your concession tax and build in compliance to the zoning. Stories of 99 year leases are simply not true.
Surprisingly, building along the coastline in areas without approved zoning and concessions is very common although not completely legal. Let’s just say that policy and administration of these areas of coastline by Municipal governments has been very informal since the maritime law took affect over 40 years ago. Some constructions were built with Municipal authorization and some were not. These scenarios require specialized due diligence and scrutiny if a purchase is being considered.
Buying Coastal Property
The purchase of a registered concession for a beach property is somewhat similar to buying titled property. The due diligence involves verification of the public record to check for encumbrances and to review the terms and conditions of the concession contract and verify if the taxes are paid up to date.
On the other hand, buying beach property without a registered concession is an informal procedure, essentially a private agreement between two parties to transfer the improvements and the applicant’s first right of occupation. In these cases extra due diligence and expert advice is recommended.
Part 3 of 3 Closing and the Process of Settlement
Author Jeff Lantz – I enjoy what I do. Connecting people to the land. Something I’m truly passionate about. Helping people that come for all the same reasons I did 30 years ago comes natural. It’s not just about buying a property. It’s about investing in a whole new lifestyle. So feel free to contact me. I’m happy to help.