No menu items!


HomeAdviceUnderstanding HOA fees in new Costa Rica developments

Understanding HOA fees in new Costa Rica developments

I have been a real estate agent since before condominiums and gated communities even existed in Costa Rica. Even in those days, security was an issue. Due to a lack of social welfare and being a developing country, petty thievery and breaking and entering has always existed in Costa Rica, so the creation of condominiums was a good idea.

Living in a condominium or a gated community can be a good solution to that security issue. Knowing that the security of the condominium where you live is in the hands of a full-time, professional property management company or condo administration company allows you to just lock up your house or apartment and go to work.

But what will you do when you receive your first month HOA charges and find out you have to pay $550 per month to your condo administration? Can you afford to pay the condo fees?

When you buy a condominium in all cash, you won’t have any mortgage payments, so the HOA fees might not be an issue for you. But what happens when you need bank financing to purchase your condo?

Your bank officer will probably tell you that you can use 30 percent of your total income to finance the purchase of your condo. In many cases, since you will need all your savings to make your first down payment, all closing costs will probably be included into your loan.

Those closing costs include not only the legal fees and transfer taxes of the property you are purchasing, but also bank formalization costs and the first month’s payment and insurance. You might receive your mortgage agreement at a fixed cost for two years, so you don’t have to worry for a while.

When you budget your monthly expenses, you want to take the HOA fees into account. If you buy into an existing condominium, the condo administration can tell you exactly what your monthly HOA fees are. But when you are buying from the developer, will you know what the condo fees will be? I’m sure you won’t. Even the developer will probably not know.

Buying in pre-construction or under construction

When you purchase a townhouse or condo in a gated community from a developer, if it is in pre-construction or with construction ongoing, the cost of the condo fee or HOA fee will almost never be discussed unless you request information about it.

The developer will be paying the security until 50 percent of the community is sold and will then turn the condo administration over to the home owners if the amenities are fully built. Many Costa Rica real estate developers leave those amenities for last, so they won’t turn the common areas over until the project is fully finished.

What amenities does the community offer?

The cost of the condo fees is a combination of the salaries of the security guards, the maintenance of the security monitoring equipment, the maintenance of the gate and security guard house, as well as the maintenance of the swimming pool, gym, playground, and sewage and waste water treatment plant as applicable.

The security is the highest cost of all and can run into thousands of dollars a month as they should also include CCSS and INS for those employees as well as the need to cover different shifts throughout the day.

Size of the community

Smaller communities obviously have a higher condo fee than the larger ones because the total maintenance cost will be covered by fewer home owners, so the more the merrier. A gated community that has only one entrance and uses the same entrance to exit doesn’t need as many security guards as a community with two or more entrances.

Every guard post needs at least two shifts plus an extra cost for days off, vacation and sick leave. This can run up a huge monthly bill, something you should look into before you purchase your condo.

Falling in love with a condominium that looks great on paper is not all that is needed to make a great real estate investment. Looking around at existing condominiums, asking what their HOA fee is and counting the number of units in the development will be a big help for you to put together a responsible budget for your pre-construction purchase.

Ivo Henfling is a Dutch national, a resident of Costa Rica since 1980 and a Costa Rican real estate broker for over 20 years. He is the founder of GoDutch Realty, which covers several locations in the Central Valley, including Escazú, Santa Ana, Atenas, Cariari and Grecia. You can contact Ivo at (506) 2289-5125 / 8834-4515 or at

This article first appeared in 2015


Weekly Recap

Costa Rica Coffee Maker Chorreador
Costa Rica Coffee Maker Chorreador
Costa Rica Travel Insurance
Costa Rica Rocking Chait

Latest Articles