HOA? CC & Rs ? Developments? I thought this was Costa Rica!

When visiting a new country, its such a treat to be able to speak the language and interact with the locals. Now add to this, the ability to “speak the language of the particular business venture that you wish to engage in whilst in that country.

There are some common use terms here in Costa Rica in the real estate business that don’t really jive well with the exact same terms in the States. Terms such as Home Owners Association (HOA) or Development, or CC & Rs. We throw these terms around freely and I’ve come to notice that there is either a bewildered look on the face of my client, or worse, they aren’t bewildered at all but are thinking that we are talking about something entirely different than what I had intended.

For instance, a “Home Owners Association” is something that a lot of my clients are trying to get away from by moving to Costa Rica. So after having a couple of buyers run screaming naked off into the jungle at my first mention of the dread “Home Owners Association” for the particular property that they were considering, I realized that this term needed to be clearly defined early on in the presentation.

We are in the business of real estate here, and so we use terms familiar to the industry. HOA, CC & Rs, Development, etc… These terms really serve as nothing more than identifiers here of arrangements that remotely resemble their US counterparts.

• Development applies to a large parcel of land that a Developer has purchased with a view to segregating, or cutting up into smaller peices. These peices can be for commercial use or single family homes, small developments, or condominiums. So, to the North American mind, when the word “Development” is used, instead of thinking about row upon row of cookie cutter houses, think instead of what it frequently means in Costa Rica. Large multi-acre lots, with jungle all around, and buffers between neighbors. A closed water system that services just the homes within the development. Many of our developers provide certified flow ratings so that you can be assured of uninterrupted water year ’round. The developer will also provide the amount of water storage necessary to accommodate the normal demands of life for the development.
• Codes Covenants & Restrictions (CC & Rs) – are the “rules” of the HOA. I know, you’re thinking: “huh? I thought this was the land of no rules” Right you are. Nearly all the surprises with respect to what you can do with your property once you own it, are pleasant ones here in Costa Rica. There are very few, if any, zoning restrictions in many of the developments here. But, believe me, you want CC & Rs in your development. The restrictions are for things like, not allowing a nude, mud wrestling, karaoke, pig farm to be put in next door. Thats a nice “rule” right? There are none of those “you have to paint your house this color” or “your hedge can’t grow over this height” etc… The CC & Rs that I have read are, for the most part, life enhancements to the residents that are protected by them. Of course, you want to read over the CC & Rs prior to purchasing (obviously). It can happen that you are buying to put in a Bed & Breakfast (B & B) but the CC & Rs read that you can only rent out your entire house and not just a room in it. Some rather typical rules of Costa Rican CC & Rs read that, in a given development, certain lots within a development can be used for commercial purposes, or can have several residential structures on them. The norm for a lot in a development is that there can be a main house, guest house, and a pool. I’ve never seen the ability to rent out either structure in its entirety, not allowed. Anyway, here in Costa Rica (at least in our neck of the woods down here in the southern zone), the CC & Rs are something that the land owner wants. They are not intrusive and they protect the quality of life for the residents therein.
• Homeowners Association (HOA) is the group of home owners of a given development. The members of an HOA around these parts generally have 2 things on their minds: road and water. Generally, the access to a development is what we here call a “public road”, which to a North American would mean a road maintained my the local municipality. HA! not so in Costa Rica. The public roads in Costa Rica that go back into the jungle are maintained by the people that live on and/or use the road for some purpose. The entrance to the development will likely run from the “public road” into the development, servicing the various lots within the development. These internal roads can be easements (servidumbre en Spanish) or simply private roads. So what the term “public” means, even though it seems that what it would mean would be that the government be in charge of maintaining the road, it isn’t so. It is maintained privately by those that use it. So, there is no difference to the homeowners with respect to the maintenance of a public road, an easement or private road, they all cost money to maintain. Keep in mind that we are here talking about roads that have turned off of the country’s main highway system, or town roads. The government does take care of those… well, for the most part… well, sort of. Anyway, the homeowners association organizes the funding and executing of road maintenance for the development. If the public road that is used to access the development is used by other homeowners further up the road, that are not part of the development, there will likely be a “road committee”. This is strictly for the maintenance of the public road and isn’t part of the HOA.

So now all you need to do is learn Spanish and you’ll speak the two primary languages of Costa Rica’s Southern Zone, Spanish and Real Estate.