The Condominium Law in Costa Rica, known as “Ley de Propiedad en Condominio”, governs the ownership and administration of condominium properties in the country. This law outlines the rights and responsibilities of condominium owners, the regulations for the administration and management of the property, and the legal procedures for disputes and conflicts. The law also establishes requirements for the formation and registration of condominium associations and the obligations of the administrators and directors of these associations. In summary, the Condominium Law in Costa Rica provides a legal framework for the effective and fair management of condominium properties in the country.
The Management
The Condominium Law imposes on the Administration the duty to oversee and maintain the common areas and services and carry out, all acts of management of the condominium. Management has the obligation to ensure compliance with the law and the condominium regulations. The management is elected in a condominium HOA meeting represented by the majority of property owners.
The Finances
The most important financial aspect of a condominium is the budget. The Management must propose the Common Expenses Budget for the Condominium. It is imperative that this budget be based on real and reliable initial balances and income statements, preferably audited.
The essence of living in a condominium property involves the fact that there are common expenses that must be covered by all the property owners and that these common expenses are an unavoidable and preferential legal encumbrance on the property should you fail to pay them.
Once approved by the HOA, these common expenses are mandatory and cannot be excused from payment under any circumstances.
Another consideration is to determine if the property has a reserve fund. Most common expenses are paid out within the same budgetary period, usually on a monthly basis, such as security, cleaning, administration services, etc.
However, there may be additional expenses for capital improvements or maintenance that require a longer period of budgeting. The most common way to account for this is by creating a reserve fund with a specific purpose. If the property does not have any reserve fund then you could be liable in the future for additional expenses to cover any capital improvements or unforeseen expenses.
The Common Areas
In most condominiums, the biggest conflicts arise from the use of common areas.
In condominiums, there are a series of common areas that require regulations on their use, areas such as Pools, gyms, clubhouses, and common walking and open spaces that must be properly regulated to guarantee a suitable, adequate, and equitable use. Noisy parties late at night, pets wandering in common areas, or vehicles parked anywhere are the first symptoms of a condominium with deficient regulations, and this must be addressed immediately before behaviors are established that are more difficult to eradicate later on. Having deficient regulations only contributes to making the administration’s job more difficult.
The Condominium Law obliges the rational use of common areas things and prohibits any act or omission that could result in the lack of tranquility, safety, health, and comfort of the condominium.
In addition to those regulations established by the Law, the bulk of the internal regulations should be found in the Condominium by-laws. The by-laws are established when the condominium is formed and they can only be amended with the agreement of all the property owners by way of a general meeting. If you are purchasing a condominium property it will be very important to determine the content of the by-laws and any internal conflicts related to the use of common areas in the property.
What you need to know when purchasing a property regulated by the Costa Rica Condominium Law
You are purchasing a private unit with a condominium referred to locally as a “ finca filal” . The condominium is the entirety of the property, which includes the private units, , as well as the common areas and the underlying property.
In addition to owning your private unit, you also own a proportion of the common areas and property, based on the size of your unit.
Every condominium has a survey plan that describes its areas. It is called a layout plan. This plan describes which areas of the property are private (subsidiaries) and which areas are common.
Every condominium has the right to a meeting of unit owners, which is a formal meeting, previously convened and with a predefined agenda, attended only by registered property owners.
Every condominium has rules that govern communal living, the rights and duties of unit owners..”
All decisions in a condominium are made by the majority in a meeting with a quorum.. There is a minimum quorum required for each type of decision.
In conclusion, purchasing a condominium property in Costa Rica is a great option for those that are looking for security and maintenance of all common areas. It is important for you to do your due diligence before making any purchase.
