Costa Rica Expertise LLC

A property fraud case study

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

A retired expat couple came back to Costa Rica last week to fight for their rights. They say they are fighting to get back their beautiful ocean view condominium taken from them over five years ago. The persons who got the condo were experienced in their game, and the retired couple honest and unsuspecting.

This criminal court case paints a classic Costa Rica property swindle scenario. The expat couple came to Costa Rica to look for a retirement home near the beach to enjoy their lives after many years of hard work and saving a retirement fund. They trusted the people they met including the attorneys they hired to look out for their interest. They invested about $300,000.

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

Digging deeper into the three-letter rule to fire an employee in Costa Rica turned up something interesting. There is no three-letter rule. Giving two warning letters and then a final firing letter is only a custom in this country, not the law.

Actually, writing a letter to the employee is also a custom, not the law. The following analysis expands on the information written in the articles “Being too nice can backfire on any employer” and “Employers are getting pounded in labor court cases.”

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And an employer could be just a homeowner

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

Employers are suffering heavy losses in their labor court battles with employees. Judges are also clobbering employers with hefty awards to the employees to serve as a warning to bosses to stay out of court.

In one labor case, a court decree Friday surprised a retired couple. A judge ordered them to pay thousands of dollars to a guard service. The judge ruled that the proprietor of the service really was an employee and not an independent contractor. The homeowners have contracts between themselves and the guard firm to prove otherwise, but the judge discarded the documents as rubbish.

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Lack of knowledge leads to fears

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

Expats in Costa Rica who rent to others need to know the law and the important exceptions. Property owners also need to know that the law is not the same for all kinds of property. Many expats prefer not to rent to Costa Ricans because they fear the local rental law due to their lack of knowledge or language ability.

On the coast, expats rent very short term — daily, weekly, and occasionally monthly — to vacationers coming to the country. Usually, they collect their rental fees in their home country or online over the Internet. Some do not declare the money they collect here nor elsewhere. This scenario is a nice source of income for many and for those who do not report the income, tax-free money — at least tax-free until they are caught.

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

Here is a yearly reminder. Education and culture taxes — Timbre de Educación y Cultura — are due next Monday, March 31.

Many people, including professionals, sluff off filing form D.110 and paying these taxes. However, paying them is required by Ley 5923, and every company in Costa Rica listed at the Registro Nacional is required to pay this tax. A company’s net capital amount determines the tax to be paid.

The tax amounted to quite a bit of money in 1976, the year the general assembly enacted the law. Today, the amount is almost insignificant and is a nuisance tax to most.

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