Costa Rica Expertise LLC

Overbuilding, speculation begin to take toll

By Garland M. Baker
Special to A.M. Costa Rica

The five-year real estate sales boom is winding down fast in the United States. Costa Rica’s real estate market is slowing too. Skyrocketing property values may be a thing of the past there and here.

Many speculators in the United States are now walking away from their deposits or trying to wiggle out of their contracts and losing substantial money in the process. Others are stuck with their investments because they did not see the reversal coming.

As home equities soared up north, many owners borrowed heavily against their holding there to buy property in Costa Rica. Usually this is the case in fast moving markets. People get overconfident and borrow, margin, or otherwise overextend themselves to chase increasing values.

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Officials decline to act on suspect document

By Garland M. Baker
Special to A.M. Costa Rica

The supposedly secure property records at the Registro Nacional are under daily attack. Computers make up what amounts to a virtual vault, securely holding titles to trillions of dollars of Costa Rican properties. Paperwork and other computers are the attackers commanded by crooks stealing the assets of others.

The thieves are smart and know how to beat the honest out of assets in a fell swoop. They use the weaknesses of the registro to their advantage. The over-burdened organization’s computers collapse under pressure almost on a daily basis. There are those who work there willing to risk their career for a fast buck.

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By Garland M. Baker
Special to A.M. Costa Rica

According to Consumer Reports, 66 percent of those living in the United States do not have a valid will. Imagine how many expats do not have one in Costa Rica.

Laws governing last wills and testaments are different in this country, and most people never get around to making a valid document.

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By Garland M. Baker
Special to A.M. Costa Rica

Vultures and rats are stalking the innocent home sellers to make a quick buck.

The game is the use of Article 1049 of the Costa Rican Civil Code and property flipping. The rules are everything goes and the best trickster wins.

Article 1049 is only one sentence long and it states "La venta es perfecta entre las partes desde que convienen en cosa y precio." In English, the string of words translates to “The sale is fixed between parties upon agreement of thing and price.” The sentence means that it is possible to cheat a naive seller out of a property because of their lack of knowledge of the law.

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Salvaged vehicles seem to be common in lots

By Garland M. Baker
Special to A.M. Costa Rica

Readers requested this article. Some helped write it by sending in accounts of their own experiences trying to buy a used car in Costa Rica. Most recount the endeavor as a terror. One couple has almost given up and prefer the bus to dealing with used car salespeople. They may import their old vehicle from the States, paying more in the process, because they know the car and do not want any more surprises.

The biggest problem is the twisted tongues of some of the sellers. Little that some state about a used car comes close to the truth, especially the mileage.

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Main consideration is limiting liability

By Garland M. Baker
Special to A.M. Costa Rica

There are six different types of companies in Costa Rica. Most people are only familiar with one or two, the most common types like sociedad anónimas and S.R.L.s. In these times of changing tax regulations, everyone, business people as well as individuals, should know the differences between the company structures available under commercial law.

The most common company structure in Costa Rica is a sociedad anónima, which is equal to a standard corporation in the United States and other parts of the world.

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For employers, homebuyers and homeowners

By Garland M. Baker
Special to A.M. Costa Rica

Foreigners and expats here have a tool to check out potential employees, contractors, domestics and even real estate brokers and other business associates.

And they really need these tools.

As an example, 75 percent of the applicants to a recent clerical job opening in Costa Rica had serious credit problems. Employers need to know this information because many believe that individuals up to their eyeballs in debt are more likely to steal on the job.

The tool is the six credit reporting agencies in Costa Rica.

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Analysis of tax package (5)

By Garland M. Baker
Special to A.M. Costa Rica

Instructions on how to kill the goose that lays golden eggs.

Step 1: Restrict the inflow of capital by taxing it 10 percent upon arrival in Costa Rica.

Step 2: Make bringing money into Costa Rica as difficult as possible.

Step 3: Tax the money heavily once it is here.

Article 7, Section 4 of the proposed fiscal plan assumes all passive income comes from capital of Costa Rican origin unless proven otherwise to the tax people. The burden of proof is on the taxpayer.

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Justice and the Transparency Phantom are accompanied by the wolf-like tax police in execution of the new tax plan.

An analysis of the fiscal plan (4)

By Garland M. Baker
Special to A.M. Costa Rica

Transparency and Justice are teaming up and, using the synergy of information technologies and law, will surely prevail in collecting more taxes from everyone.

Transparency sits alongside Accountability, implying an openness and willingness to accept public scrutiny, decreasing the capacity for deception, as in hiding money from the tax people. Typically, transparency is used when discussing oversight of public officials. Now it is the individual citizen whose holdings and life is transparent. The concept has been referred to as the Transparency Phantom in a previous article.

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By Garland M. Baker
Special to A.M. Costa Rica

Semana Santa, Easter week, is just around the corner and it is longer this year.

Law 8442 reformed the Labor Code, Law 2, Article 148, last year moving several holidays from their calendar day to the following Monday. The holidays include April 11, July 25, Aug. 15, and Oct. 12. This year April 11 falls on Tuesday of Semana Santa week. Based on the law, the day will be celebrated Monday, April 17, thereby extending the holiday.

Customarily, San José closes down for the Easter holiday, and almost everyone heads for the beach. This year most people will be able to leave after work on Friday, April 7, and can holiday until Tuesday, April 18.

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Custom document protects buyer and seller

By Garland M. Baker
Special to A.M. Costa Rica

Finding a good deal on real estate can be harder to do these days in Costa Rica with land prices sharply increasing.

Once found, lock it up with an option contract, and register it with the Registro Nacional. This step puts a legal lien on the property so the seller cannot weasel out of the deal if another buyer with more money shows up. Double dealing occurs everyday in a fast-moving real estate market.

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By the A.M. Costa Rica staff
Researched by Garland M. Baker

A false rumor that the Walt Disney Co. plans to construct a major resort on the Pacific coast is getting new life, thanks to telephone solicitors for real estate deals.

A study by a local consultant shows no evidence that Jacó or Quepos will join ranks with the likes of Los Angeles, Calif.; Orlando, Fla.; Paris, France; Tokyo, Japan; or Hong Kong; the five population centers where Disney has theme parks and resorts.

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Condo easement situation is example

By Garland M. Baker
Special to A.M. Costa Rica

When laws collide, the fallout can hurt the little guy — or in this case, keep the little guy from getting full title to his new condo.

A simple pyramid can explain the legal system in Costa Rica. Sources are the Constitution, legislated laws, presidential and executive decrees along with the rules and regulations that give instructions on how to apply law.

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Workplace conversations waste time and money

By Garland M. Baker
Special to A.M. Costa Rica

Give an inch, and they’ll take a mile.

Offer a hand, and lose an arm.

These management axioms also have to do with cellular telephones. Cell phone abuse is rampant among employees.

Even someone who still does not have a cell phone is not immune from the increased numbers of them. In a movie, a restaurant, a church, or a meeting, people are using the technology and being a disturbance.

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