Costa Rica Expertise LLC

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.

Read more!

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.

Read more!

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

Remember the days of skyrocketing real estate prices in Costa Rica? People thought then there was no end in sight — no limit on how high a piece of dirt could go. Real estate in the United States was crazy, too. Doomsayers here and there were friendless. No one would listen to their tales of a looming crises.

Everyone knows now that the doomsayers were correct. The bubble burst. Some of those who bought properties in Costa Rica are now hurting back home. As predicted, they cannot pay their obligations there or here. Adjustable rate mortgages were the devil's work fueling the subprime mess.

Many sellers carried back mortgages on real estate here so they could get the highest price possible from buyers. Smarter sellers made all cash deals. The smart ones knew many buyers were shopping overly hungry in a vast supermarket and ready to over spend.

Read more!

Legal technique gives landlords a boost

One does not have to be a bad guy

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

Owning property in Costa Rica comes with many decisions. One is whether to rent or not to rent when one is away for long periods.

Rental laws are very clear. Any contract automatically gives a renter a three-year rental term. No contract, no matter how well written, can change the law. The renters law, Ley de Inquilinato, specifically protects renters regarding term as well as in many other areas. Rent is synonymous with lease involving real property. There is no difference under the law.

Read more!

1995 law finally having impact

Slogans like this dot the landscape because now landlords have the right to jack up rents and evict those who won’t pay. This says ‘No eviction without a fight.’

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

Many lawyers have made a fortune over the last year desalojando, or evicting people from their happy homes and businesses because of a change in the rental laws which happened over eight years ago.

Much of the tearing down of buildings you see throughout Costa Rica, especially in the older communities, is also due to these events.

Read more!