Playa Grande Building Information

For those folks that are building somewhere else, other than Playa Grande, you can use this information as a guide. Most likely it will be easier to go through the Costa Rica building experience in your area, than it is in Playa Grande.

The following steps will help you understand what it takes to start and complete a project in the Playa Grande, Costa Rica area.

Step 1

Contact A Realtor

It is wise to use a realtor in Costa Rica. Most likely they will know the area and may even know important information about the property that interests you.

Be aware that in Costa Rica anyone can be a realtor. There is no licensing. There are no standards. There is no recourse if you get scammed. Do your homework before you take any persons word for anything in Costa Rica, especially real estate.

Here is a warning that appears in every issue of the Tico Times...

Warning to Our Readers - Investment Alert

"Please be aware that many business and investment opportunities in Costa Rica are neither regulated nor approved by any financial regulatory agency. Also, remember that the regulations governing investments in Costa Rica are not as strict as they are in other countries. While legitimate opportunities exist, so do scams and extremely risky ventures. Investing in Costa Rica can be much like gambling, and readers should keep that in mind and invest accordingly."

Step 2

Visit & Investigate the Property

There are many issues to investigate before purchasing property in Costa Rica, especially in the Playa Grande area.

These are the types of issues you should pay attention to, before you make an offer to purchase the property:

Re-Survey The Property: in Playa Grande, Costa Rica you will find that most property pins are light metal stakes or re-bar placed in concrete cylinders marking the boundaries of individual parcels of land or lots. These pins can be easily moved or removed altogether.

Find the existing property pins and verify them to ensure they match the "Catastro Plano". Once you locate the pins, mark the property perimeter so that you can visually see the boundaries.

If you decide that the property suits your purposes have the property surveyed and property pins location verified or re-established, if missing.

Check for Basic Services: that are available such as water, electricity, telephone, internet, road access, areas for septic systems. Drainage is important in Costa Rica. Make sure there is a place for the water from your lot to run into, that will not affect your neighbors' property.

There are properties in the Playa Grande area that are below grade of the roadway. These properties may be subject to water problems if not raised to an appropriate level. This is something you should consider before making an offer, as bringing the lot to the appropriate grade to prevent water problems, may be expensive.

Make Sure You Can Build On The Property: ownership of property in Costa Rica is guaranteed by the constitution, but nothing guarantees that you can build on the property. Before you make an offer check to make sure you can build on it.

This can be difficult in areas such as Playa Grande. No one can guarantee that you can build on a piece of property in Playa Grande as each application to build must be reviewed by the environmental department called SETENA. (SETENA is the abbreviation for National Technical Secretariat Of The Environment Ministry.)

This process is not easy and must be approached with each detail of your project thoroughly thought out and drafted. Wording on applications is extremely important.

Most architects and other professionals in Costa Rica are not familiar with these processes which can cause the property owner problems and long delays in their application process. Using the right people will help move your applications through the permitting stage.

Do not rely on your architect for coordinating environmental issues. You can obtain a list of approved environmental consultants directly from SETENA. There are more than 1600 registered consultants approved by SETENA which gives you many to choose from. You can also check their track record at the SETENA office.

Check With: the Ministry of Public Works, for future road construction projects. Also check with, the Ministry of Health, the National Institute of Housing and Urban Development and the Municipality of Santa Cruz, just to make sure there are no plans in the works, that will adversely affect the property you are considering.

So far in the Playa Grande area there are no issues affecting most properties, however each property should still be investigated for any type of issue that could affect it. Don't take the word of realtors, developers, lawyers, architects or anyone else regarding the property that interests you.

Check For Environmental Issues That: could affect the property. There may be some special requirements, depending upon what type of structure you are intending to build. If your project requires an environmental impact study duly approved by SETENA, the process to obtain a construction permit may take longer.

Many property owners in the Playa Grande area have been required to provide SETENA with some type of review or study before granting permission to build on their property. In some cases permission to develop property has been denied.

Be aware that SETENA and National Parks have a supreme authority over where and what is built in Playa Grande, Costa Rica. If you start without their permission, they will shut you down, some times permanently.

Once again, do not take any persons word regarding what is required by SETENA.

Step 3

Making An Offer On The Property

Use the services of a realtor to negotiate the price and terms according to your instructions. If you are outside of Costa Rica, a faxed offer is acceptable.

Step 4

Hiring A Lawyer

Be careful of which lawyer you hire. Rumors have it that there are lawyers who are no as forthright as they claim to be.

You could use Stewart Title who has an option with their services to guarantee title. You can have them form companies and process real estate transactions.

Step 5

Wire Transfer Your Money

In most cases you wire transfer the funds for your purchase to the lawyer. Your bank in your home country can handle this for you.

Step 6

Receive Property Legal Documents

This is an important step, because in Costa Rica you get the original property legal documents and company books in your hands, physically. Have your lawyer keep the documents for you or have someone you trust keep them. You need copies of these documents for approvals and permits.

Step 7

Project Design Hire A Costa Rican Engineer

Now that you own the property and you know exactly where the property pins are located, you can hire an architect or engineer.

You can obtain a list of architects and engineers in Costa Rica from the CFIA, the governing body of these Costa Rican professionals.

Make sure you have the professional you choose design the project exactly the way you want it completed. This is your opportunity to turn your ideas into reality.

Construction Plans and Permits Phase

Construction plans and technical specifications remain one of the most important steps in the overall construction project since the successful execution will depend upon the quality and accuracy of these drawings. Once you agree on the layout and design of the building, work can begin on the drafting of these plans.

In Costa Rica, a complete set of building plans should include a site plan, distribution plan, elevation and transversal and longitude perspectives, roof design and drainage, design of footings and support beams, structural plans, electrical design, mechanical and sanitary system design, as well as a plan that details all of the interior finishing of the construction.

It is only when the construction plans are completed that your professional can begin preparing a materials list and construction budget.

The permits and permissions stage is very important in the Playa Grande area. Your professional must work with SETENA, MINAE, SINAC, Health Officials, water authorities, Seguro, INS, ICE, Municipality of Santa Cruz and other government departments to obtain permits and permissions as quickly as possible. You want to obtain permits as fast as you can, as regulations and policies in Costa Rica change quickly.

From each of these government authorities, you are requesting their permission to build on your property. Every request, every document, every construction plan, must be accurate and complete which will allow your applications to move through these processes quickly.

The Control and Execution Phase

The control and execution phase involves the actual construction and project supervision. The assigned architect or engineer will visit your construction site once a week to view the work that is in progress. His inspection will be recorded in the proper book required by Costa Rica law.

Written Contract

Once you agree on the requirements of your project, have your lawyer draft a written agreement for our architectural design and engineering services. All details and costs for services should be clear to both parties before the final document is signed. Once the final agreement is signed, work should begin work on your project.

Step 8

Construction Plans

This first step in drawing the construction plans is to position your buildings and other features on a "site plan". The site plan is very important, as it shows exactly what and where buildings and features will be placed on your property.

In the beginning you simply "rough sketch" concepts that may suit your needs and work with your professional to add or eliminate features.

After working back and forth you will come up with a plan the suits your needs. Your professional will begin drawing the preliminary drafts for your review. You make the changes that suit you best and keep adjusting the preliminary drafts until you are satisfied that the details of the project.

Make sure you get a copy of the draft and final plans. It is a good idea that you obtain a copy of every document relating to your project.

Step 9

The Building Permissions/Permits Stage

There are many permissions and permits required to develop property in the Playa Grande area.

The following is an overview of what we do to obtain the permissions and permits for your project:

>> Obtain Certification Of Water Availability

You must obtain a letter certifying that water will be made available to your property. You can do this locally in Playa Grande. All permissions and permit applications require this letter.

This letter will be copied and notarized. A copy will be posted on your website.

>> Obtain A Letter From Parque Nacional Marino las Baulas

Obtain a letter from Parque Nacional Marino las Baulas officials stating that your property is either "inside of the park" or "outside of the park". SETENA requires this letter.

Physically travel to the park office located in Playa Grande and submit your request for an inspection. Park officials will travel to your lot and make a determination. You can pick up the letter at the park office once the inspection has been completed.

This letter should be copied and notarized. This letter does not have to be notarized in most instances, however, having it notarized eliminates any doubts about its originality, which could be questioned somewhere in any of the application processes.

>> Make Application To SETENA (SETENA is the abbreviation for National Technical Secretariat Of The Environment Ministry.)

Have your environmental consultant travel to San Pedro, which is a suburb of San Jose to "hand deliver" the application to the SETENA office. SETENA will date stamp a copy of your application, as have being received.

Get a copy of this receipt from your consultant.

>> Wait For SETENA's Determination

An inspector from SETENA must physically attend your lot and review your requests. This could take many months as these inspectors are responsible for similar applications throughout Costa Rica. There are few inspectors and many applications. Your environmental consultant must work with the assigned inspector on a regular basis to see if he/she can get him to inspect your property.

Once the SETENA inspector, inspects your property, it takes about 30 working days, sometimes longer to receive a written determination called a "resolution" from SETENA regarding your application. If you do not receive a determination within the 30 working days, your consultant should start contacting the inspector regularly to keep your project fresh in his memory.

He should be contacted by telephone and in person. Keep on your consultant to do this.

When you receive the determination from SETENA, it will state exactly what SETENA requires to process your application further.

In most cases the determination will be made by SETENA that you require some type of environmental impact review or study. In any case, their letter will clearly state what you require to satisfy their requirements.

>> Environmental Review/Impact Study

Have your environmental consultant, who needs to be registered with SETENA, conduct the work necessary to satisfy the requirements of SETENA. Hire a consultant that has the experience of doing other studies in the Playa Grande area.

>> Submitting The Review/Study

Have your environmental consultant physically travel to the SETENA office and submit the required documents, receiving a stamped copy indicating that SETENA has received the documents.

>> SETENA's Approval Process

Your application and environmental review/study remains in the SETENA office until it is reviewed by the inspector who initially inspected your property. He will review your study and make a recommendation to a committee that will either approve or not approve your project, with certain conditions.

This process can take many months, years for some property owners in Playa Grande. The time it takes to process your application solely depends on who you hire to manage your project and the environmental consultant used to process the required documents.

It is important to use "the right people" from the beginning, because you need someone to "push" at every stage in the application process, to make sure your best interests are at the fore front.

>> Cerificate Purchase - Before Receiving SETENA's Approval Resolution

Assuming your project is approved and before a final resolution is issued, you will be required to purchase a certificate from the Banco National. The cost of this certificate is about one percent of your estimated project's value. This certificate is similar a bond to ensure you comply with the SETENA resolution. Failure to comply with the resolution could mean that SETENA would be able to cash the certificate and keep your money. If there are no infractions during the construction of your project, you can cash the bond and keep the money.

This certificate must be purchased through the head office of the Banco National in San Jose. You need to references to open an account at the Banco National. Have your lawyer help you with this.

>> Receiving SETENA's Approval Resolution

Once you receive SETENA's final resolution, you can use the required resolution to obtain other permissions and permits.

>> Permission To Remove Trees

If your project requires trees to be removed, permission is required from the MINAE office in Santa Cruz. You need to hire a forestry consultant that will conduct a review of your project and catalog all of the trees on your property. He uses a GPS system to do this. Every tree is numbered.

He then identifies which trees you want to remove so that your project can be completed. You have input into which trees you want to keep on your property. It is important that you request all the trees you want removed during the initial application, as obtaining permission and physically removing trees after construction has started is difficult.

Once the consultant makes application, the MINAE inspector usually travels to Playa Grande on a motorcycle, however, there may be times when he requires transportation to and from your property. Your forestry consultant should provide the transportation for the MINAE inspector and accompany him to your property.

After reviewing your application to remove trees, a resolution will be issued indicating the results of the MINAE inspector's recommendation.

This resolution states, by number, which trees can be removed and which trees cannot be removed.

Note: Rumors have it, that it costs hundreds or thousands of dollars to remove trees in Playa Grande. This is not true. There are no fees charged by MINAE to remove trees in Playa Grande. When property owners proceed through the proper application and approval process, no fees are charged. This can always change. Have your lawyer check before taking any action.

>> Health Department Approval

Your architect or engineer needs to physically carry your documents and plans to the Health Department in Santa Cruz and apply for approval to install a septic system and construct your project.

>> INS Insurance Requirements

Property owners must obtain an INS insurance policy for their project, before applying for a building permit at the Santa Cruz municipality. This policy is similar to workers compensation. The cost is about 2-3 percent of the projects value.

Use an English speaking INS in representative that will meet with you and explain your options. You can also purchase other types of insurance from him or her. If you are not in Costa Rica, have your lawyer obtain the insurance for you.

Your insurance policies are valid for one year. It is best to purchase the INS insurance just before applying for building permits at the Municipality of Santa Cruz.

>> SEGURO

SEGURO is government medical insurance for employees. You must register with SEGURO in Santa Cruz. It is important that property owners realize that the "patron", meaning the property owner, is solely responsible that the SEGURO for all workers is reported properly every month and monies paid as required.

Many architects and contractors say that they will pay SEGURO, however, SEGURO only recognizes that the "patron' is responsible for reporting and paying the SEGURO payments for all workers. Nine percent is deducted from the employees pay, twenty five percent is paid by the property owner. A total of 34 percent must be paid to SEGURO monthly.

Many foreigners who trust their architect or contractor is properly reporting and paying SEGURO, get a surprise somewhere down the road, when they find out from SEGURO that nothing has been reported or paid. This will result in the property owner being required to pay thousands of dollars to SEGURO. Do not get caught in this situation.

>> Applying For And Installing Temporary Power

Make sure your architect or engineer applies for and installs a temporary power pole at your property, that will be used during construction. Better yet, have your architect build your permanent power pillar and use it during construction. This will save you the time and hassle of moving the power from temporary to permanent once the construction is complete.

>> Applying For Municipal Building Permits

Your architect or engineer should physically attend the Municipality of Santa Cruz building department and submit the required documents and architectural plans. It usually takes five to ten days for building plans to be reviewed and approved.

Have him/her check with the building department at five, seven and ten days after submitting your documents. If you have not received permits by day eleven, have your professional physically visit the building department and investigate the disposition of your application. Have him continue with these physical visits until permits are received.

>> Application For A Water Meter Installation And Connection

You should submit the required information and make a second application for a water connection to your property. This usually takes two or three weeks. You should work with the water authorities to have your water meter and connection, installed as quickly as possible.

Step 9

Hire A Building Contractor

You should request "bids" to construct your project from three different reputable building contractors. Once you receive their bids, which must include their proposed contract, have your lawyer review their package with you and your professional to ensure your best interests are at the forefront. A word of caution... "everyone in Costa Rica claims to be a builder". Be careful of who you hire.

Step 10

Write An Agreement

Experience has proven that reasonable, topic by topic agreements will help the project progress smoothly and result in a fair working relationship for all involved. Details and payment schedules are spelled out so that all stakeholders know exactly what takes place at every stage in the entire process.

Step 11

Begin Construction

Once the written agreement is in place construction will start on your project. The builder will start setting up his equipment and materials to begin construction.

Step 12

Changing Your "provisional power" to "permanent power"

First you go to the downtown ICE office in Sanata Cruz. You apply for an electrical inspection. It costs 450 colones. They do an inspection, then you go to the main ICE office on the highway and pay another 150 colones. In about 3 days someone will be out to change your power over.

Maybe your architect or contractor can have this done for you. It would be a good idea to mention it in your contract.

Step 13

SETENA's final inspection

Have your consultant make an appointment to have SETENA send an inspector to do the

final inspection on your project. It takes about 8-24 months to get the inspection and go through the process of getting yoru deposit money back.

Required Documents

The following documents are used throughout each permits/permissions stage:

1. Representation Document Of The Company

2. Company Registration Number

3. Client's Passport

4. Residency Status

5. Residency Card

6. National Park Letter

7. Recent Registry Study

8. Certificate of Taxes Paid

9. Certificate of Social Services

10. Certification of Water Availability

11. Land Use Letter

12. Proof of INS Liability Insurance

13. Cadastre Plan

14. Contract of Professional Services

Bill Stilwell
Playa Grande, Costa Rica