In Costa Rica, it is common in rural areas to find pieces of land that are marketed as Estate Lots and known locally as “Quintas”. These properties are generally parcels of land that are greater than 5,000 m2 (53,819.55 Sq. Ft. / 1.23 acres)
Why do Agricultural Estate Lots Exist ?
Estate lots exist in Costa Rica due to an anomaly in the Costa Rican Agrarian Law designed to protect small farmers when Costa Rica was mostly an agriculturally based country. The idea was to protect small family agricultural parcels that were the backbone of Costa Rica. Article 49 of the Agrarian Reform Law states: The institute may carry out the subdivision of its lands to achieve, among others, the following immediate objectives: A better distribution of the land, the resolution of inconvenient factual situations by adapting them to the purposes of this law, and colonization goals.
How were Agricultural Estate Lots Developed
Fast forward to the present. As Costa Rica emerged as a key tourism destination, interest in these larger parcels surged. Real estate developers began exploring ways to develop and market them to foreign buyers. Due to their zoning classification as “agricultural use,” these parcels were subject to specific legal size restrictions and coverage stipulations that needed to be adhered to.
What are the Restrictions?
Under the law, an Estate lot must exceed 5,000 m2 (53,819.55 Sq. Ft. / 1.23 acres). To facilitate access to these Estate Lots, the law permitted their division and connection through an Agricultural Easement, which had to be seven meters wide without any limitation on its length. Consequently, a developer could segment a large farm into several 5,000 m2 parcels, establish an agricultural easement through them, and legally title each individual estate lot. The goal was to create large residential lots without any real intent for cultivation or agricultural use, despite this being the original intent of the law.
The main restriction for these estate lots was related to construction. Given the assumption of agricultural use, the law historically imposed a 15% coverage limit on the property for building purposes.
Recent changes introduced by the Regulations on Urbanizations and Subdivisions from the Institute of Housing and Urban Development (Reglamento de Fraccionamiento y Urbanizaciones del INVU) have increased this coverage limit to 25%. However, a new constraint stipulates that only a single residential home of up to 300m2 can be built. Previously, although the coverage restriction was 15%, it allowed for the construction of a 750m2 home on the property, representing 15% of 5,000 m2. With the new regulation, this permissible footprint has been reduced to 300 m2.
The Unintended Consequences of the Legislation
Initially aimed at safeguarding the interests of small agricultural families in Costa Rica, the legislation on agricultural parcels ultimately had an unforeseen and contrary impact. The reality is that very few Costa Ricans are now in a financial position to buy a 5,000 m2 parcel of land, leading to a market shift where these parcels are predominantly being acquired by foreigners.
Conclusion
If you intend to purchase an Estate Lot in Costa Rica be sure you can use it for your intended purchase. Hire an Attorney that will represent your interests to conduct all the require due diligence
