If interested I have a friend who has one for sale plus
he'll throw in a bridge on the main highway between Jaco & Quepos for half price !!
Peace?
PIDD
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Buyers of stalled condos worry about down payment
By the A.M. Costa Rica staff
The nation's real estate market is grinding to another crisis as developers find they are unable to perform on their promises.
In beach towns and in the Central Valley condo buyers gave money to developers as down payments in anticipation that a building would be erected. Now many structures do not exist or stand unfinished, and the buyer's legal problems are just beginning.
The basic problem is that many developers used the down payments to finance construction. Local banks have frozen lending, so even the strongest developer may find it cannot complete the job.
Some buyers were under the impression that their money would be held in trust. In the United States strong trust laws protect buyers and hold the funds until the finished product is delivered. Not so in Costa Rica.
Some buyers gave their money to Stewart Title. That was the case with a Jacó woman, Gretchen Gary, who said she put a $21,000 deposit on a condo there. Thursday the title company manager, Esteban Rodriguez Varela, told her the company had disbursed the money to the developer when the sales agreement was signed. That is what the contract said and that is what the title company did, he added in an e-mail. He could not be contacted by a reporter.
Another buyer put up $78,000 for an as-yet unfinished penthouse condo, said the woman. Sales prices ranged from $189,900 to $749,900, she said.
In Escazú some buyers are suing a developer, but they found that the entire project is covered by a first mortgage that has priority over their deposit money.
Elsewhere unhappy would-be buyers are finding that banks have first position with a construction mortgage.
The problem is not restricted to condos. Paragon Properties sold many lots to North Americans via an aggressive telephone and mail campaign. Buyers took a trip to Costa Rica, signed sales agreements and paid part of the purchase price.
A typical Paragon contract requires additional payments every several years and that the purchaser begins construction within a stipulated period.
There is nothing illegal with the contract, except that the world financial situation has changed so that buyers who were planning for an early retirement may now have lost much of their money in the stock market downturn. Paragon executives were not available Thursday to assess the extent of the problem. Other firms that sold vacant land have similar contracts.
Ms. Gary, who is in the real estate business, was quick to point out that many developers who canceled their projects did refund down payments to buyers. Others allowed buyers to obtain property in another development. She named Vista CR and DayStar, a former employer, as two firms that have kept their promises.
For Arcelio Hernández Mussio, a lawyer in Jacó with wide knowledge in real estate, major developers cannot afford to cheat customers because of the damage such actions would do to their reputations. He said he thinks most developers will come to some agreement with those who put down deposits.
Others may allow buyers to accept property in another project, he said.
Of course, some start-up firms that may have been under capitalized to begin with might not have a choice, and principals many not even be still in the area. The firms find themselves unable to make more sales or to borrow construction money to raise cash to finish the whole project
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