Costa Rica has one of the most advanced laws on condominium property in Latin America.
The “Ley Reguladora de la Propiedad en Condominio“, Law # 7933 of November 25, 1999, provides that Condos must have a “Finca Madre“, that is, the common ground where the whole condo is built, which belongs proportionally to all of the condominum owners, and then, with “Fincas Filiales“, which are each one of the units within the Condo.
There must also be a clear notation of all “areas comunes” or common areas, which belongs to the Condominum, and thus, to all owners.
This law applies to commercial and residential buildings, notwithstanding the number of individual buildings or the number stories per building, could be horizontal or vertical construction; it could also be applied to subdivision projects, or to simple lots without any construction on them.
The Condominium in order to be regulated by the 7933 Law, must be executed in a public deed, by a Notary Public (must be an attorney in Costa Rica), and duly registered on public records at the “Registro Público” the National Registry.
Once the Condominum is registered, it acquires a structure similar to that of a company:
- There is a governing body (The General Assembly of Proprietors), and an Administrator that has full legal capacity to act on behalf of the Condominum, like the Chairman does in a corporation.
- Then, the Condominum has the capacity to act as an independent legal entity, to open bank accounts, enter into any kind of business, sign contracts, appear in court as plaintiff or defendant, and so on. The Condominum will have a set of legal books (minutes and accounting), issued by the Public Registry.
One of the main requisites to qualify for the Condominum status, is the elaboration of an internal “Reglamento” or By Laws, that can be assimilated to the Charter of Incorporation of a Corporation.
In such By Laws, there must be a structure that will regulate:
- The election or removal of the Administrator & his capabilities.
- The fees each proprietor must pay to support common expenses.
- The frecuency of General Assembly of Proprietors’ meetings.
- The rights & obligations for use of common grounds & assets.
- Sanctions & dispute resolution for solving disputes between neighbors.
- Decoration & architectural regulations for the facades & common areas etc.
If a dispute arises in the Condominium, the Reglamento is to be applied by the Administrator, either amicably or by means of a trial in court against the perpetrator.
A common problem is where an owner refuses to pay his common dues. In such a case a CPA certificate of the debt will act as an overdue legal mortgage, allowing the Administrator to sue the neighbor in arrears, freezing his unit and asking the Judge to foreclose.
Other problems in residential Condominums can be attributed to owners with unruly or dirty pets, or sometimes noisy, wild-partying neighbors that refuse to keep the noise levels down.
All these possible causes for friction and problems between neigbours must be considered in the ‘Reglamento‘ in advance, in order to avoid living in hell instead of the paradise you had dreamed of….
So, if you are considering buying a Condo Unit, appart from the price, location, style, etc, we would strongly encourage you to check the legal status of the Condominium and read and fully understand the Condominum By Laws.
To do this you may need to have the Condominium By Laws translated into your own language but in Costa Rica that cost is minimal. You may also wish to hire a qualified attorney to read and explain the ‘Reglamento‘ in detail.
Most Costa Rica condo buyers agree that this is a very small price to pay for the peace of mind that you’ll get when you are considering buying Costa Rica real estate.
José Rafael Fernández Quesada has been in private practice as an International Law counselor in Costa Rica since 1985. He works mainly with foreign clients from Europe, Canada and the USA who are living in or doing business in Costa Rica.
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