LEGAL WATER AVAILABILITY OPTIONS FOR REAL ESTATE PROPERTIES IN COSTA RICA
LEGAL WATER AVAILABILITY OPTIONS FOR REAL ESTATE PROPERTIES IN COSTA RICA
Are you planning on building, remodeling, expanding, subdividing, or developing a property in Costa Rica?
When a property owner wants to develop and/or build on her/his real estate property in Costa Rica, the corresponding Municipality/Local or local government will require the property of interest to have access to legal water as part of the legal requirements to grant a building permit. In the past, informal water sources were accepted by some municipalities as long as the water was proved to be potable by means of a lab test. Nowadays, the government has gotten more formal and is demanding that the local governments (municipalities) only accept formal water availability options.
The following are the different options for water availability in formal documents:
- Costa Rican Aqueducts Institute (AYA) water availability letter. This option is only possible when the property of interest is located in an area where the AYA already has an aqueduct in operation. This alternative is sometimes referred to as “city water.”.
- ASADA water availability letter. This option is only possible when the property of interest is located in an area where an ASADA (Local Association for the Administration of Aqueduct) is legally created and registered before AYA and already has an aqueduct in operation. The ASADAs are local associations normally managed
by neighbors to legally operate a local aqueduct under the supervision, parameters, and registration of the AYA. - Municipality water availability letter. This option is only possible when the property of interest is located on an area where the municipality or local government already has an aqueduct in operation. This is not a very common scenario, but some municipalities, especially in rural areas of the country (where the AYA has not developed much infrastructure either directly or through an ASADA) have gotten involved in the construction and operation of aqueducts to serve the local community.
- A water concession was granted over a machine-drilled well. This option is only possible when:
- The property of interest has access to a legally permitted and registered machine drilled well. The well could be located inside the property of interest or on a neighboring property. If the well is on a neighboring property, the neighbor shall have also granted a water tube and right-of-way easement to the well.
- The property of interest (through its registered owner) has obtained before the Costa Rican Water Department of the Environmental Ministry, a water concession for human consumption. Obtaining a water concession for human consumption will only be possible after technically proving to the Water Department that the well has enough quantity of water of good quality (clean for human consumption as per lab test results). A water engineer should be hired to carry out the water concession application process, which is currently taking approximately 12 to 18 months.
- The Water Department will normally only accept 1, 2 or maybe 3 water concession requests over each drilled well, if and only if, it is clear and technically backed up that the well has enough quantity of water and a stable underground water table. Under normal conditions and if requested at the same time, the water concession request filed by the property where the drilled well is located will have priority over any neighbor`s request.
– Water Concession granted over a machine drilled well for a Condominium project. This option is only
possible when the property of interest is located within a formally created Condominium development,
with a legally granted special “Condominium Water Concession for its own consumption”. This type of
concession is only granted to a Condominium project when it has been confirmed in writing that no other
water availability options are available either through AYA, ASADA or the Municipality. This concession is
normally obtained by the developer of the Condominium project at an early stage of the development and
will cover all the condominium lots, houses, etc. The quality and quantity of water provided by the well will
also be carefully checked by the Water Department before issuing this special Condominium water
concession.
– Water Concession granted over a spring, creek or river. This option is only possible when:
o The property of interest has access to any of the above referred water bodies either inside the
property, on its boundaries or on a neighboring property. If the water body is located on a
neighboring property, the neighbor shall have also granted a water tube and right of way easement
to it.
o The property of interest (through its registered owner) has obtained before the Costa Rican Water
Department of the Environmental Ministry, a water concession for human consumption. Obtaining
a water concession for human consumption will only be possible after technically proving to the
Water Department that the water body has enough quantity of water of good quality (clean for
human consumption as per lab test results). A water engineer should be hired to carry out the
water concession application process which is currently taking approximately 12 to 18 months.
Water concessions over “superficial water bodies” such as springs, creeks or rivers are considered
more fragile and exposed to contamination, human activities, landslides, floods and other natural
disasters, dry seasons, etc than concessions obtained from deep machine drilled wells connected
with the underground aquifers.
– Non-Registered Hand Dug Well. Although the alternative of a non-registered hand dug well has been
expressly stated as a legal source of water on regulations issued by the Costa Rican Housing Department
(INVU) back in 2021, the Municipalities around the country have not been accepting this alternative as an
option to back up legal water if the corresponding hand dug well is not registered at the Water Department
of the Environmental Ministry. On the other hand, the Water Department has not been proceeding with
the registration of hand dug wells anymore as the above referred INVU regulations state that the
registration is not needed, leaving the corresponding property owners on a catch-22 situation. Throughout
year 2023, some Municipalities have started to issue Municipal Council approvals to accept non-registered
hand dug wells as another option for legal water for construction permits of homes. One example of this
is the Municipality of Cóbano on the Nicoya Península, which is still in the process of formalizing this
alternative as an option for legal water.
Water availability letters issued by the AYA, ASADAs or Municipalities have a validity of one calendar year from the
date of their issuance. Before the one-year term elapses, if needed the property owner shall request an extension
for an additional year. These extensions are normally granted only in two or three occasions and are not guaranteed
as they depend on the AYA, ASADA or Municipality`s aqueducts still having water available for new connections at
the moment of the request for the extension.
On some occasions AYA, ASADAs or Municipalities may grant “water capacity letters”. These letters are different
from water availability letters and do NOT confirm water being available for the property of interest. Instead, water
capacity letters only pretend to inform that upon the completion of certain infrastructure works, the property of
interest may receive a water availability letter in the future. Water capacity letters are not accepted by the
Municipalities to grant building permits and are normally only used for preliminary steps of the development process
of real estate projects with different governmental agencies. In most cases, the private owners of properties
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receiving water capacity letters and having an interest to obtain legal water availability letters, would have to invest
money on the infrastructure required to obtain legal water. Said infrastructure could be for example extension of
water lines, installing water pressure valves, installing air pressure release valves, construction or improvement of
reservoir tanks, construction or improvement of wells, purchase and installing water pumps, paying for technical
hydrologist studies, etc. All these improvements will be considered as donations in favor of the AYA, ASADA or the
Municipality.
A detailed review of the alternatives of legal water availability for a real estate property should always be a very
important part of the legal due diligence carried out before purchasing, or at least taken into consideration while
negotiating the purchase price with a seller. A property without legal water availability could encounter challenges
for construction and development, or even for expansion or remodeling projects. In some cases, those challenges
can be solved after investing on infrastructure and/or having to wait months or years for the property to obtain
access to legal water.
We hope that this short memo helps clarify the different alternatives to verify the existence or obtain legal water
for your property of interest. At Invicta Legal we are always looking forward to assist you. Contact us for consultation
regarding this particular matter or any other matter related with legal due diligence on real estate properties in
Costa Rica. Our goal is for our foreign clients to make well informed business decisions while investing miles away
from their country of origin.
Alberto Sáenz & the Invicta Legal team.
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Invicta Legal Group
• Juvenal Sánchez – Partner • Alberto Sáenz – Partner • Jorge González – Partner Building EBC. 10th Floor. San Rafael, Escazú Tel: (506) 4036-5050 Fax: (506) 4036-5060 www.invicta.legal • Email: [email protected]