Construction permits: What you need to know to begin your project

Feb 14, 2008

(Source "The Guanacaste Journal", Vol.3 Edition 124, Feb.12 - Feb.18, 2008, www.journalcr.com)

(Infocom) – Costa Rica offers multiple options for investment and, in the current juncture; tourism investment is perhaps the most profitable, since the country is going through a boom never seen before in this industry – especially in the tourism construction sector, including hotels and condominiums. 

If you are interested in investing in this field, it is important that you know a few things about construction permit paperwork and regulations concerning zoning and land use, so that your investment won’t face obstacles at the last minute due to irregularities or omissions. 

The 2008 Tourism Investment Summit, to be held Feb. 20-21 in San Jose, will include these topics as part of its conference offerings and other activities, with the goal of facilitation access to the growing Costa Rican tourism market for investors. 

Even though most of the country’s seven provinces have experienced an important increase in the number of construction square meters during the past five years, Puntarenas and Guanacaste are the ones that show the most growth, representing 17 percent and 21 percent, respectively, of total construction area in the country, trailing only San Jose. 

Guanacaste and Puntarenas are the jewels of Costa Rican tourism, attracting numerous projects of national and foreign capital. They include hotels by prestigious international chains and residential complexes of great density, which boast luxury and facilities for their owners, as they alternate with beautiful ocean views and a relaxing tropical flavor. 

Only in 2007, permits for 8.5 million square meters of construction were processed in Costa Rica, 6.6 percent more than in 2006 (when it was 7.94 million), which demonstrates a continued dynamism in the industry. 

According to data from the Engineers and Architects Professional Organization (CFIA), from January to December of 2007, permits to build 23,000 square meters daily were processed throughout the country. 

Guanacaste is currently No.2 in the number of square meters built and construction permits issued during 2007. The cantons of Santa Cruz and Carrillo, which are home to some of the most popular beaches in the North Pacific (such as Tamarindo and Playas del Coco), rank atop in the province, concentrating three of each 5 square meters of construction. 

Last year’s performance by the construction sector is encouraging, and it’s expected that 2008 will experience similar growth, so this industry is a magnet for new investors, especially because of the numerous natural attractions that Costa Rica – Latin America’s favorite green destination – has to offer.

What do you need to know to begin construction?

First, it’s necessary to point out that the entities in charge of issuing construction permits to any individual, business or anonymous society are the municipalities. 

There isn’t a general law that applies to all municipalities and establishes specific requirements to obtain construction permits, which means requirements vary from one canton to the next, considering the level of autonomy with which the country’s 81 municipalities operate. 

Generally speaking, it’s assumed that each municipality will have a regulatory plan for lands under its jurisdiction, including urban centers and coastal regions should that canton have them. These regulatory plans set forth the different uses allowed for each specific area, among the commerce, tourism, housing, etc. 

Regulatory plans establish, among others, zoning and regulations for different land uses. 

Zoning and land-use regulations have the main goal of delimiting and putting order to the canton’s land use, in an effort to have clear guidelines for the rational use of these lands according to the needs of the residents and secure an organized urban growth. Generally, municipalities classify land under three categories: urbanized lands, urbanizable land, and non-urbanizable land. 

Even though each regulatory plan is different and obeys to the particular needs of the canton, for the most part land-use zones include categories such as residential areas; commerce and services; parks; community and green areas; mixed areas for businesses and housing or industry and commerce; and industrial areas. 

According to the land-use distribution established by the regulatory plan, the municipality issues a land-use certificate, which confirms that the activity to be developed is allowed in that zone. This certificate is required for any activity that involves construction, remodeling, expansion, repairs and urbanization, as well as for the installation and operation of businesses or industries that require a municipal permit. 

This certificate is also a required document to present before institutions charged with okaying blueprints or authorizing constructions, such as CFIA and the National Housing and Urban Development Institute (INVU), for example. 

Uses can be varied: allowed, not allowed, and conditional. 

After this, the municipality issues the construction permit, with which the construction can be started, but first other requirements must be met: including the environmental viability studies and the approval of constructions blueprints.

Works that necessarily require municipal construction permits include land clearing, excavations, demolition, interventions to buildings declared as architectural heritage, and expansions or changes done to buildings. 

Construction permits are valid for one year from the moment they are issued. If nothing has been built within a year, the business or individual that requested the permit will need to ask for a new permit, having to meet all requirements again.