How do I go about changing the utilities in Costa Rica, as in water, electricity and internet service, for my new Costa Rica property? This, is a question I get asked on every property I have sold and I am sure it will come up again, so I decided to do a short writeup about it.
When you purchase a property, part of the due diligence is to make sure that the utilities, like electric, water, cable and internet, that are servicing the property are first legal and second up to date. Let me explain item 1 first.
1) Believe it or not, there are some unscrupulous people in this world, even in Costa Rica, they will do just about anything to save a buck and pass the cost on to others. I ran into this situation with a property I was helping a client purchase. We had asked for the past 6 months of electric bills as a contingency of the offer. The client just wanted to make sure all was good.
Once we got the information, we noticed the first month of 6 seemed ok and reasonable, but the next 5 months were just out of control and almost 4 times higher. Even the seller could not explain it as he was not even living in the property but back in Europe. We contacted the electric provider to give a breakdown of month by month for the last year. Again, all looked fine except for the last 5 months.
To cut to the short of it, when the home inspections was being doing the inspector started checking the electric main on the street and noticed something funny about it, there was a wire coming out of the back of the meter box. Out of curiosity he tracked it. Low and behold the wire that was leading to the house next door. Basically, they were stealing the electric off of another person’s meter. Needless to say, that was rectified very fast.
Once the due diligence is being perform by the reputable legal team, all utilities are checked with the service provider to make sure A) the property has service and B) they are up to date on bills.
2) Up to Date utilities. When the due diligence is performed the buyers, legal team will request the utility account/contract numbers from the sellers or their representatives. With this information the legal team will then contact each service provider to ensure that the sellers are not delinquent with their bills.
Here in Costa Rica, the utility providers do not go out the day of closing to read the meters and give a final bill, like in most of North America. Instead every deal I do I always endure there is a hold back of money from the seller to cover any utility bills that come due after the closing. This prevents the buyers getting stuck with the bills of the sellers.
3) When we start talking about cable/ internet service which in today’s world is a necessity, it is a different ball game. The legal team will check to see if service is provided, but rarely do they do transfer the service. This is because the service provider requires new contracts for new clients. This is not a hard thing to get. Just going in to one of the service providers retail stores, show your passport and sign a contract and you are good to go. Of course, you need to pay the first set up.
Most good law firms will offer the service of changing the utilities to the buyer name or their Costa Rica corporation whichever way the buyer decided to hold the property. The law firm will require in most cases a special power of attorney to represent you in front of the utility provider. This is required when changing utilities if you are not present. Some folks say well I can do it myself! Yes, you can, if you speak great Spanish and have all the proper paperwork for changing it.
When you are purchasing a property, it is advisable to ask the legal team that is helping with the transfer of title if they will transfer the utilities as well.
Take it from me, when changing the utilities of your new Costa Rica property it is easier and faster if you just let the legal team do it, the cost is not much and save all sorts of frustrations.
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