This entry is part 1 of 1 in the series Understanding Costa Rica Real Estate

Costa Rica History in knife metaphorI’d say that about 1/10th of my time spent with people looking to buy property in Costa Rica’s Southern Pacific zone is spent in the actual buying/selling of property. The other 9/10ths is a mix of conversations regarding what’s involved with living here, as well as discussing the business of real estate in Costa Rica.

At its core, the lack of an actual MLS (Multiple Listing Service) colors all aspects of the business here, and I’ll go into that later on in this series. To really understand the business of real estate here, I have found it helpful to go back in time and see the progression of events up to the present. This helps to not only understand the current market but also, to project what is to come.

Early days:
I got into real estate in Dominical in 2004. It felt like the day I got into real estate was the day that someone threw the on-off switch on the market. Since then I’ve heard some tales indicating that the market was already simmering and poised to boil.

I made a sale on my first day in the business. A $60,000 gorgeous ocean view property sized at around 2 acres.  The property featured Uvita’s Whales Tail front and center. That property has gone on to have a lovely home, guest house and pool built on it. It has been re-sold and enjoys a stellar vacation rental history (link to rental page on HomeAway)

Quick overview of The Zone:
The Zone is made up of a string of 3 towns with Dominical at its northern end. The northern boundary is not a hard line but is decidedly fuzzy, easily extending up to Hatillo and at times, up to Portalon. (link to Hills of Portalon Development).

From Dominical heading south on the coastal highway you get to Uvita and then further south, to Ojochal. The area between Dominical and Uvita has a nicely laid out mountain range that runs very parallel to the ocean. Hence the handle “coastal mountain range” This means that you can travel inland from the beach just a short way and get to elevation where it is breezy and cool and offers expansive views of the ocean and coastline, attributes which make this area extremely desirable to investors, relocators and migrators (part-of-the-year residents).

More History:
Before the incoming press of foreign interest in The Zone, the Ticos (Costa Ricans) owned all the land, and their land holdings were always in the multi-hectares (1 hectare = 2.48 acres. Think 2.5 to make it easy).

There was a time in the not too distant past when land in Costa Rica was nearly value-less. There were land-grant programs whereby a man simply had to be willing to take responsibility for a property and the government would “grant” him the land, with conditions.

At that time it was not known that “nature” had a lucrative aspect to it. Instead nature was largely viewed as “in the way” and needed to be tamed, subdued or eliminated. So, one of the conditions to receiving a land grant was to cut the trees down and raise cattle.

I suspect that this era may have coincided with the “McDonalds” explosion. This is an arguable point, so let’s just say it coincided with an extreme demand in the U. S. (and world) for beef.

After some time of cutting down enormous canopy trees and attempting to raise cattle in former rain-forest environs, there was a shift in our world’s appetites; nature became an important commodity. Granted, beef has continued to be an active commodity, but it was also learned that former rain forest land doesn’t necessarily make for the best pasture land.

Raising cattle in Costa Rica was a daunting struggle. The farmers found themselves up against nature. Having to maintain former rain forest jungle land in “pasture” condition presented its trials, as well as the fact that the beef business (exporting meat, bureaucratic inefficiencies, and 3rd world infrastructure or lack thereof) made a guy scratch his head and wonder if having all this land was such a good idea.

The Tico culture was/is multi-generational. These large, granted tracts of land, would end up being populated by the man who acquired the land, his now grown sons & daughters and their families, and the grand kids (soon to also have families.)

So despite having lots of land, a condition that in first-world countries equates to being wealthy, these farmers were subsistence. They lived off of what their land produced. As a child would grow to adulthood, Abuelo (abuelo = grandfather) would simply build them a house and apportion off some land (or not) and they would continue on contributing to the sustenance of the family. The land itself was not thought of in lucrative terms.

Abuelo just happened to acquire a land grant on, let’s say, 60 hectares of land that reaches from the inland side of the maritime zone on the coast up to the highest point of the coastal mountain ridge. He’s not thinking “oh boy! I’ve got some ocean view land here.” No, he’s thinking: “man I hope this land is fertile.”

Enter foreigner:
One day Bob, a tourist, is exploring the area and decides that he’d like to buy Abuelo’s property. Bob offers Abuelo $60,000 for the land. Abuelo has never even considered the remote possibility of maybe someday having such a sum. In fact, he’s never even seen that much money. He talks it over with his family and they (very understandably) feel that this would be a wonderful thing for them to do. So, they sell their land.

Bos is a visionary. He sees what is likely coming and so he stakes his early claim. Now, keep in mind that there is no electricity to this property, the access is horseback and the water is from a nearby spring that is bubbling out of the ground. Abuelo has run a pipe from the spring to an elevated storage tank near the family homes. Bob’s a visionary in that – what foreigner in their right mind would possibly want such a remote and forbidding piece of land?

To understand this is to understand the element that is credited with making the world go round. We all have different likes and dislikes. I wonder at the likes of Steve Jobs, Bill Gates and Paul Allen’s level of focus on the personal home computing idea at the time that they had that focus. I’m not of this ilk and so my hat is off to such ones. I view the early investors here in The Zone as being made of the same stuff.

In looking back over the history of the first wave of investors here, I marvel at their foresight. My then wife and I looked at some Whales Tail view property in Uvita around 2002 and, despite its being gorgeous and nicely priced, I felt that it was simply too remote. This was in the same area where 2 years later I sold my first property.

Ok, so I said that to understand the real estate market here in Costa Rica, it helps one to know a bit of the history. Granted, we’ve gone back to what I appropriately call the first-wave of intrepid and visionary investors – The Visionaries. We’ll continue on in the next article with Bob’s next steps and incredible gains on his visionary act.


Easements… Made Easy! 2


The fact that you are reading this article means you are interested in purchasing or selling a piece of Costa Rica real estate.

For buyers, let me first lead you through a visualization to help attract the perfect property… You drive up a well-maintained gravel road and turn onto a large, flat building area… A cool ocean breeze is blowing as you step out of the car… the 180 degree view stretches from emerald mountains to a wide and tranquil blue horizon. After days (dare I say years) of searching, you’ve finally found it!

Servidumbre de paso in Costa Rica real estate

Servidumbre de Paso in Costa Rica.

The next step is getting into the details.  The property boundaries are clearly defined for you using the registered survey (el plano catastrado).  Upon closer inspection, you see a squiggly line labeled servidumbre is running inside the boundary.  What is that squiggly line, and is it even important?

In Costa Rica, a servidumbre refers to an easement.  It provides a legal right for the owner or owners of a property touched by the easement.  Without getting too technical, the “dominant” property is encumbered and the “servant” property is improved by the easement.  Even if the dominant property is subdivided and sold to new owners, the new properties created will carry the legal title of the servidumbre.

There are instances when an easement is not labeled on the plano, but (if done correctly) they are registered as a “lien” on the title.

Types of Servidumbres

Servidumbres provide value for property in the ever-growing and changing landscape of Costa Rican real estate. They come in a variety of distinctions and protect a variety of interests—

  • Access to a property, often through another property  (Servidumbre de Paso)
  • Water, the right to use a water source and/or maintain water lines (Servidumbre del Acueducto)
  • Environmental, like extracting road material like rock/stone (Servidumbres de extracción de materials)
  • The View, often important with ocean view property (Servidumbre de Vista)

Protecting “The View”

View easements have played a part in a few deals in the past.  Our friend Eduardo Abarca Vargas, who happens to be an excellent lawyer in Uvita, helped me understand the details of this important property detail.

There are a couple of ways to legally describe view easements.  The first is a description based on the numbered boundary points on the plano . (see illustration)  The description (always in Spanish) could read ¨the easement will affect the area of the property within the boundary point 1 and 3 of the property.¨

The second method is when a certified survey crew uses GPS coordinates (lat./long. and elevation).  Based on that data, the maximum height of buildings, trees, towers, etc. on the property below are stated in meters.  Eduardo explains, “One of the most important items is to state the direction the view will be protected, for instance, the easement will protect the view towards the ocean.”

Costa Rica real estate sample plano with easements

What is a Servidumbre de Agricola?

These Legal Teeth Are Sharp

That’s one of the best things about servidumbres; they have legal significance that cannot be separated from the estate or piece of land to which they are registered.  We know of a few cases where a property owner has tried to prevent access along a servidumbre de paso by putting up a gate.  Thanks to the easement, a judge ordered him to take it down under the supervision of the police.  Legal costs aside, there is no cost to having a servidumbre other than paying for any work associated with enjoying the easement (e.g., road or water system maintenance).

Normally, easements are granted into perpetuity and remain unchanged when the property is transferred to new buyers.  There are only a few ways an easement can be dissolved:

  • The owner of the dominant estate acquires ownership of the servant estate or vice versa.
  • Waiver from the dominant estate holder, although such waivers have to be reviewed by a judge.
  • No use. Typically, it takes between 10 and 20 consecutive years of non-use to dissolve an easement.

New servidumbres can be registered, but they require the written agreement of all of the owners of a property.   This can be challenging when dealing with a large family farm, but not impossible.

Due Diligence

As I mentioned, easements can be found on the registered property survey and in the title, recorded as a “lien”.  They are discovered during the due diligence phase of buying your property.  Click here to read more on the stages of buying Costa Rica real estate.

I may sound like a broken record, but I can’t stress the importance of a good lawyer enough.  If you want to ensure your dream property doesn’t have any “surprises” get a good one with years of experience with property transactions.  Our legal associate Eduardo has uncovered many interesting easement issues for our clients over the past four+ years.  Feel free to contact him directly at: edabarca@racsa.co.cr or (011) 506-2743-8345.

It wasn’t the most entertaining subject to write about, but it’s an important one to consider before buying a piece of Costa Rica real estate.


About Tigre

My first visit to Costa Rica was in 2002. I immediately fell in love with the warmth of the climate and people. After spending two weeks in San Jose, Puerto Viejo on the Caribbean side, and Tamarindo in Guanacaste, I knew there was a good chance I would return sooner than later. Sooner came just 6 months later when my uncle mentioned he was flying down to Costa Rica to close on a piece of property in the Southern Pacific Zone. On that trip I found my own piece of paradise above the small town of San Buenaventura, home to the San Buenas Golf Resort. Two years and 8 trips later, I decided to move to Costa Rica full time. Every day I am thankful for that decision.


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