THE LOCAL MARKET

Arturo Blanco, June 2007

A recent study done by SUMMA MAGAZINE (May 2007) compares the price of properties both in the city as well as the beach between Florida and Costa Rica. According to the article a two bedroom 2 bathroom apartment at the beach has a normal cost in South Florida of $1000.00 per sq.foot and in Costa Rica a similar development would cost $214.00 per sq. foot. Comparing beach property to develop, the prices in the US are close to $260.00 per sq. foot and in Costa Rica around $46.00 per sq. ft. El FINANCIERO newspaper a specialized financial paper from Grupo Nacion- has recently reported that although 70 percent of the construction is concentrated in Guanacaste, other areas of the country are being developed. On a personal note, projects in Parrita and Osa have become daily source of work. It is evident that the new trend is to build on coastal view properties, more than beach front Concession areas. On some concepts related to this last notion, I am including a brief explanation.

LEGAL CONCEPT:

Concessions in the Maritime Zone: Concession property is more commonly known as beachfront property belonging to the government. A concession in Costa Rica is defined as the right to use and enjoy a specific property located on the maritime zone for a pre-determined period of time via a lease with the goverbment. Public zone is comprised of the first 200 meters measured horizontally from the high tide. This zone also includes islands, pinnacles of rock, mangroves, estuaries, small islands and any small natural formation that overcome the level of the ocean. This 200 meter zone is divided into two areas:

1. Public Area:

The first 50 meters measured horizontally from the high tide line. This zone is not available for ownership of any kind. Further, this area is deemed a public area and any individual wishing to utilize this area for enjoyment has the right to do so.

2. Restricted/Concession Area:

The next 150 meters. This area is available for Concessions to be granted. A concession is in essence a lease on the property granted to the lessee for a specific period of time. Normally the concession period is granted for 20 years. An owner of a concession may build on that concession, subdivide the concession and perform other acts to the property. However, appropriate permits from the local municipality must be obtained. In Costa Rica, 95% of beachfront property is considered concession property and is governed by the Maritime Zone Law These legal dispositions set forth the conditions under which foreigners and local residents can own concession property.