I’ve saved up three years of unpleasant experiences and have now decided to tell the stories which have not been told.

Prior to managing residential property in Costa Rica, I owned and managed numerous rental buildings for 20 years in Canada – somewhere around 300 tenant years.

In all that experience, I probably didn’t have more than a handful of experiences similar to the ones I will describe that happened during my 20 tenant years of experience in Costa Rica.

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It is often said that Costa Rica is the home of the wanted and the unwanted. The saying is still true, in my experience. The seasoned expat has learned to be more reserved when making new expat friends – probably because they too have been disappointed.

Having said that, however, I feel there may now be a higher percentage of people who do not fit that description, who have lots of options and are choosing to live in Costa Rica. Whether the former group has diminished, I don’t know.

We have a very detailed lease based on our experience in both North America and Costa Rica. It spells out in substantial detail mutual roles, responsibilities and expectations; we expect to follow it and we expect others to follow it. Having said that, the two most frequently broken clauses which are technically enforceable in Costa Rica are:

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  1. Term of lease (early terminations) and …
  2. The security deposit is not to be applied against the last month’s rent. While these are annoying features which we commonly experience, they are not the worst.

You have to realize two things: The landlord-tenant legislation in this country is the most one sided piece of draconian legislation that I’ve ever seen – the Socialist party in Ontario (NDP) introduced very lopsided legislation in the early 90s which has, over time, become more balanced. Not so in Costa Rica.

Therefore, even if the courts did function expeditiously here which they don’t, there is little legal remedy. Supposedly Costa Rican law recognizes as binding, private contracts of which our lease would qualify. For us to test it in the courts, it will have to be a major issue.

The other thing to remember is that most expats looking for rental accommodations have no history which can be effectively searched.

So, the landlord is accepting blind based on what he sees and hears, with virtually little recourse if the assessment is wrong. This is reality as I’ve experienced it – perhaps others know something I don’t. Consequently, the incidence of disappointment is much greater here than my experience in Canada. In addition, I’ve not been able to detect any difference based on age, sex, economic status or nationality.

Costa Rica Landlord Horror Stories:

Our project started as ‘Blue Skies Bungalows’ with eight very basic homes which leased long term for $300 month or so. When I purchased Blue Skies, I inherited the tenants virtually all of whom I had come to know. I set about improving the infrastructure and some of the units as they became vacant.

The existing tenants remained on at their historic rental rate as per Costa Rican law and were now able to enjoy a more reliable infrastructure and the house improvements made along the way. I replaced the broken down washer/dryer with new coin-operated units and provided hot water which previously wasn’t available.

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  • One person tried to start a tenant revolt over the pay-per-use washer/dryer. When he was unsuccessful, he did a midnight move taking my furniture with him. I traced him down and after I outlined what legal recourse I would be taking, he returned the furniture.
  • Another couple left owing me $400 using the washing machine as their excuse – and it was these same two people who used the previous machine all day, every Saturday – not allowing anyone else to use it and complaining when it was broken and that there was no hot water.
  • One person threw a temper tantrum when I trimmed the 9′ hedge on the side of the house to around 6′. He felt it inhibited is practice of walking around in the nude and now couldn’t stand in the front door and scratch his privates. I explained that his privates were not 6′ high so I in no way deprived him of his pleasure. He left shortly thereafter owing me.
  • Another person emailed me that he had to make a quick return to California to look after his dying mother. On inspection of the house, we discovered a mess, which was not surprising since his ‘wife’ had six kids who visited on a regular basis… We heard he subsequently returned to Costa Rica and disappointed a number of other people.
  • One elderly couple who fought and verbally abused each other constantly announced one night they were leaving the next day. Reason? They couldn’t remember how to open remotely the gate and continued to claim it was equipment malfunction – despite numerous training sessions and written instructions – example: “Dial 1 and hang up the phone”.

I then developed our new real estate project and the nature of the product changed dramatically. We command premium rents which reflect the type of product we offer however the stories haven’t changed:

  1. We had one guy who we later suspected of being manic depressive (he was certainly an alcoholic) who was 90 days late on his rent but both the owner and we felt the guy was genuine and decided to play ball with him. He eventually made good, and then two months later fell behind again.

    We had warned him that we would be forced to start eviction proceedings were this to occur again and would otherwise ‘encourage’ him to leave. In the last week, of the notice period we gave him, he did about US$3,000 worth of damage.

  2. One person visiting from the USA was considering buying a place at The Gardens so that his wife could visit her family in Costa Rica. I allowed him to use a unit I owned for free for the week so he could check us out. In the last night of his tenancy, he racked up US$250 worth of phone bills and split. Despite repeated promises to send a check, I’ve never seen a dime.
  3. We had one person, who I knew to be very critical and acerbic tongued and quick with poison pen letters. In fact that is how I first met him because he beat me up over a statement I had made in my website. He challenged “… the soon to be completed new highway to the Pacific.”

    I accepted his argument and changed the statement to what it now is “… when completed, the highway…” He and his partner moved into a unit at The Gardens and he used our project as a model to show his prospective clients what they wanted to build with their ‘Gardens’ project in Jaco.

    After a few months, his payment schedule became erratic and we pressed for payments and compliance with certain clauses of the lease. This resulted in a poison pen campaign designed to alienate us from other tenants and owners.

    After suffering three vitriolic letters filled with personal attacks, innuendos, and misleading information, I wrote those on his distribution list a fact filled, level headed non-abusive letter. He was alienated and ostracized from those whom he had sought favor and then made a midnight exit taking some things which didn’t belong to him. He’s still trying to develop his project with virtually nothing to show; I wish him well but I’m fearful for his investors.

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  5. One of our investor/purchasers claimed to head up a number of investor groups out of Florida. He bought two units which were to be used as model homes for his clients; he expected to buy more units and to partner with us in our next project. The clients never arrived. He was personally charming and very generous and certainly very easy to work with.

    A series of things started to happen which made me suspicious. I did a Google search and found that he had been a bad boy in the 80s and had a prison record.

    In October he had been arrested for money laundering as well as several drug related charges in a DEA sting operation. He pledged property to raise bail — it seems that the property might not have been his to pledge, that he had taken out large mortgages on properties he didn’t own, skipped town and had been arrested in Italy and last I heard is currently waiting extradition to the US.

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    I also understand that a number of civil actions are pending. Until the ownership is sorted out, we will continue to manage the two units and when ordered to liquidate by a competent authority having jurisdiction, will follow their instructions.

    One of the unfortunate investors was here this week scoping out the situation and I believe is satisfied that the properties are being leased and maintained effectively.

  6. The most recent incident this past week involved a short-term lessee. The one month with option to renew turned into 12 stressful days. By mutual agreement, we terminated the relationship. At my wife’s urging, I did a Google search on him and again found there are a number of people who have not very nice things to say about him and his business practices.

    When I informed the referral agent of our experience, I was advised that they too had had difficulty with him and had severed all relationship. We shared a mutual assessment of him and common opinion that he will not settle well in Costa Rica.

What have I learned?

My old rule of thumb was that most of the people are honest and honorable most of the time is changing to some of the people are honest and honorable most of the time.

I’ve seen posts asking if it is OK to lease their homes to Ticos… I don’t have any experience leasing to Ticos but can certainly tell you that it isn’t a cakewalk with expats.

Will we get better at selecting our clients? I would like to think so but I’m not sure how, at this point in time – usually there just isn’t much information on which to make an assessment.

Will we be quicker to take action when we are concerned? Yes. We won’t knowingly break the law but we are more than likely to go down swinging if diplomacy fails.

Brian Timmons is a Canadian citizen living in Costa Rica.

My Experiences As A Landlord In Santa Ana, Costa Rica And Abroad.

Article/Property ID Number 1477

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There are 2 comments:

  • Brian Bordenkircher at 2:44 pm

    Vacation Rentals? Curious if you have had luck with renting as short term vacation rentals.

  • jay at 10:02 pm

    thanks for sharing.

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