License proposal would crack down on illegal brokers

A chamber representing real estate brokers in Costa Rica announced Wednesday that it is drafting a law that would require all real estate brokers to have licenses.

To get a license all real estate brokers would have to take classes.

If the chamber’s plan is made law, foreigners would no longer be able to come to Costa Rica and sell real estate without first getting a license and without first getting the proper residency that allows them to work.

“One of the prime reasons behind us wanting a legitimate real estate law that makes brokers licensed in this country is that they have to pay their social obligations to the Caja, that they have to pay their social obligations to Tributación,” said John Kartman, an expat real estate broker. The Dirección General de Tributación is the Costa Rica tax collector.

He has been working here for 20 years as a real estate broker and he said that all foreigners here should follow the same rules, adding: “We don’t want anyone coming here just saying they’re a broker and representing that they’re an expert in the field and people being taken or tricked into buying something that’s not exactly as it’s being presented. There has to be ethics, and those ethics need to be backed up by a licensed realtor.”

The organization, the Cámara Costariccense de Corredores de Bienes Raíces, has been seeking a license requirement for real estate brokers for years.

At a conference Wednesday morning, the president of the chamber, Aleyda Bonilla, explained that licensing makes the entire process of buying and selling real estate more transparent and more secure for clients.

She also explained that this legislation would not create a colegio, such as the legislation drafted by a tourism chamber that is currently with the Asamblea Legislativa. This would simply create an institute that gives the licenses that brokers must obtain before working in the industry.

Ms. Bonilla also added the chamber is currently the only institution that offers those classes.

The chamber also unveiled a new rule book at the conference outlining “The rules of the game” for real estate brokers. These rules are not all legally binding, but they apply to those brokers who are part of the chamber. The book is in Spanish. However, some of the rules do overlap with the law when it comes to expats buying and selling property.

There is currently no law preventing expats from becoming real estate brokers and chamber’s rules do not object to this. However, both the rules and the law state that it is illegal for expats to work without the proper cédula allowing those things.

Presumably the law that the chamber conceived would begin enforcing these rules. That would strain if not shut down some expat real estate businesses in Costa Rica.

Kartman a proponent of the idea, said it would also make sure that these brokerages are paying taxes. He said it would also prevent swindlers from stealing money from unsuspecting buyers.

Ms. Bonilla also presented a plan by members of the chamber to begin creating its own property price index for the entire country. The index would only assess land value and not the value of a structure. She said that assessors will begin with San José, then work on the metropolitan area, and gradually extend outwards to the rest of the country.

In a related comment, Jeff Fisher, owner-broker of CR Beach Investment Real Estate correctly pointed out in an email Wednesday that a four-year university degree is not a requirement in countries to the north. Although some universities offer such programs, there are lesser educational requirements in both the United States and Canada. A news story Wednesday said that a university degree was a requirement in some areas to the north.

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