Your Real Estate Property Development Plan

    Careful planning is required beforehand

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    Costa Rica offers different ways to divide and develop a property. You may hear words such as subdivide into lots, to split, to develop, to divide, or even ‘condominimize’ – try and wrap your tongue around that one!  All these terms actually refer to situations where a single property is to be formally divided into smaller portions capable of being sold, allocated, or for independent construction. But of course not each of these options are equal, each has different procedures, as well as advantages and disadvantages. Therefore, careful planning is required beforehand to determine what is best for, or can be done, in each case.

    For example, a property may simply become divided through establishing boundaries in regards to the different rights of the co-owners. For example, this is very common when dealing with family property or inheritance.  The children receive a legal entitlement to individual portions, yet that portion still remains attached to the main property.  This formula however has several drawbacks. For example, if one wants to sell their share or obtain a mortgage, it will be more difficult to find a buyer or a bank willing to buy (or receive collateral) on a legal entitlement of a shared property with others.

    For these types of divisions, they can always create independent exits, a public road, or an easement to address this.  In such cases, it is common that approval from the municipality is required.  Certain additional works, such as road improvements, sidewalks, or investment in infrastructure may also be necessary. The result is that new properties which could be sold separately are then created.

    But residential zones involve a much more complex process, and are subject to more detailed regulations. In this case, the property is divided into lots, and then into distinct blocks.  Then a public infrastructure will need to be created, such as sidewalks, street lighting, construction of a water supply and public sewage system, as well as parks, playgrounds, or other public areas. The result is lots of regular shapes arranged into street blocks, and bordered by a public infrastructure.

    Finally, in the case of condominium developments, the property is not ‘taken apart’, but is subject to a special set of rules and regulations of co-ownership.  This is characterized by private land blending with common areas.  Not public areas, but common or shared ownership by all the condominium owners.  There may be other elements or uses of the property that are considered private and/or exclusive, and thereby connected.  Thus, the property becomes a “parent property”, whereby the land is developed as a condominium complex, and governed by its own legal and organizational regulations.  Its advantages include greater control over the security, privacy, maintenance, and care of the common areas.  In exchange, the owners share the common expenses and communal style of life, and participate in decisions that need to be made through condominium meetings.

    Contact Us for more information on other real estate questions and options.

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