Expropriation

An unavoidable hazard in the past has been governmental expropriation of land, predominantly for the purposes of establishing or enlarging national parks or indigenous reserves. While this is perhaps not the greatest hazard associated with land ownership in Costa Rica, it has been a very well-publicized and expensive danger due to the fact that the government does not have a history of fair and quick reparations for the expropriated lands.

Prior to 1995, no single law governed expropriation matters in Costa Rica. The dispersed nature of the law, along with general judicial and executive branch inefficiency, has contributed to the protracted nature of many expropriation disputes, some of which have gone on for more than a decade without resolution.

The prospects for future expropriation cases may be more favorable, for on 8 June 1995, the Nueva Ley de Expropriation (New Expropriation Law, hereafter referred to as NLE) No. 7495, was signed into law. The stated purpose of the legislation is to replace with a single law the several laws that allow the expropriation of private property by any state institution. The new law seems aimed primarily at ensuring that expropriations take place only after full and adequate payment is made, regardless of the nationality of the holder of such property. Also, while an earlier bill was aimed at making expropriation easier, the new law imposes obligations and restraints on the state and its institutions (Quiros, 1995). A few of the more important provisions of the new law are: (1) the return of the property within ten years if it is not used for the purpose for which it was intended (NLE Art. 16); (2) onlv one month is granted to the tax office to do an appraisal of the property to be expropriated (NLE Art. 21); (3) payment in cash is required unless otherwise agreed upon (NLE Art. 47); (4) only six months are allowed to fully complete registration of the property (NLE Art. 20); and (5) local and international arbitration are contemplated (NLE Art. 27). The possibility of international arbitration could permit cases to be brought before the International Center for the Settlement of Investment Disputes (ICSID). (Quiros, 1995).

In sum, it appears that if expropriation of land is to occur in the future, the owner may be in a better position than in the past to receive a prompt and equitable settlement. It must be stressed, however, that the new law has yet to be tested and it remains to be seen whether it will prove to be a dramatic improvement over the prior laws.

Bibliography
Blanco, Arturo. Interview of 6 July 1995.
Brennan, Peter. "What to Expect when Investing in Miniscule Costa Rica Market," The Tico Times, 17 March 1995.
Bulgarelli, Victor. Letter to Consejo Municipal de Golfito, 10 May 1995.
Carballo, Alvaro. "The Golden Rules of Buying Real Estate," The Tico Times, 17 March 1995.
Carballo, Alvaro. Purchasing Real Estate in Costa Rica. Mundo Gráfico, San José, Costa Rica, 1993.
Carballo, Alvaro. Interview of 28 June 1995.
Constitucion Politica de la Republica de Costa Rica 7 November 1949.
Código Civil de Costa Rica
Fundacion Internacional de Derecho Agrario Comparado, La Propiedad, San Jose: Editorial Juricentro, 1983).
Harris, Brian. "How to Avoid Landowners' Worst Nightmare: Squatter Invasion," The Tico Times, 17 March 1995.
Instituto Costarricense de Turismo (ICT), Interview of 7 July 1995.
La Asamblea Legislativa de la Republica de Costa Rica, Decreta: Ley de
Expropriaciones, No. 7595, 8 July 1995.
Lawrence International Publication. Official Guide to Living and Investing in Costa Rica, 1995.
Ley Sobre la zona marítimo terrestre y su reglamento. 1st ed., San Jose, Costa Rica, IJSA, 1991.
McMerty, John. "The Realities of Real Estate Transactions," Costa Rican Business Journal, Issue 1, 1995.
McMerty, John. Interview of 11 July 1995.
McMerty, John. "The Realities of Real Estate Transactions, Part II," Costa Rican Business Journal, Issue 2, 1995.
Phelps, William. "Business Risks, Opportunities in Costa Rica," The Tico Times, 17 March 1995.
Puleo, Christine. "Step by step through the Real Estate Process: What you need to do, Pay," The Tico Times,
17 March 1995.
Quiros, José Maria, Interview of 15 June 1995.
Ruiz, Miguel, Interview of 14 July 1995.

* Fee simple, also known as fee simple absolute, is an estate in land in common law. It is the most common way real estate is owned in common law countries, and is ordinarily the most complete ownership interest that can be had in real property short of allodial title, which is often reserved for governments. Fee simple ownership represents absolute ownership of real property but it is limited by the four basic government powers of taxation, eminent domain, police power, and escheat. How ownership is limited by these government powers often involves the shift from allodial title to fee simple such as when uniting with other property owners acceding to property restrictions or municipal regulation. In English common law theory, the Crown has radical title or the allodium of all land in England, meaning that it is the ultimate "owner" of all land. However the Crown can grant an abstract entitycalled an estate in landwhich is what is owned. The fee simple estate is also called "estate in fee simple" or "fee-simple title" and sometimes simply freehold in England and Wales. In the early Norman period, the holder of an estate in fee simple could not sell it, but instead could grant subordinate fee simple estates to third parties in the same parcel of land, a process known as "subinfeudation. " The Statute of Quia Emptores adopted in 1290 abolished subinfeudation and instead allowed the sale of fee simple estates. Historically, estates could be limited in time, such as a life estate, which is an interest in lands that terminates upon the grantee's (or another person's) death, even if the land had been granted to a third party, or a term of years (a lease for a specified term, such as in an estate for years).

 

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