Which powers of attorney does your property manager in Costa Rica need?
Everybody involved in the real estate closing is exhilarated, the buyer most of all. Of course she is, Susan just closed on the purchase of a beautiful vacation home in Costa Rica.
For years, Susan has been day dreaming, looking online at vacation homes near all the beaches in Costa Rica. She has been looking at pictures of homes and condos all over the North, South and Central Pacific and at the Caribbean side of Costa Rica too, reading descriptions and asking the listing agents questions by email and phone.
Susan did her due diligence and decided it was a better idea to make an investment in a vacation rental in Atenas; she wanted to make sure she would buy her vacation home in the right location at the right price.
Susan found out it made much more sense to rent her home to snow birds and retirees who take much better care of your property than surfers who live on peanut butter sandwiches do.
Your property manager in Costa Rica needs the powers to evict a tenant
The property manager
Now, right after the closing at the closing attorney of here choice, everyone is ready to celebrate. Tomorrow she is flying out, leaving it all in the hands of her property manager. But…
The plan is to find a long term tenant for the first two years, because there is no money left to fully furnish and equip the Atenas vacation home as a vacation rental. The rental income should create a fund to purchase nice furniture and a reserve fund for repairs.
Your property manager in Costa Rica needs the power to sign the lease agreement in your name
Susan didn’t realize that she should have given her property manager certain legal powers of attorney to properly handle the administration of the condo vacation rental until it was too late and she arrived back home in Indianapolis.
She could have organized herself better to get it all done while in Atenas if her real estate agent and attorney would have helped her a bit more by informing her about her options to manage certain things through a property manager. Being in Indianapolis now, she will need to go to the closest consulate of Costa Rica, which is in Chicago, to give a legal power of attorney to her property manager for many tasks needed.
One exception to this rule is when the property is purchased through a corporation or Sociedad Anónima. In that case, a signed proxy letter will be sufficient and there is no need to visit a consulate. Unfortunately, Susan purchased the Atenas home in her own personal name, so there was no way of getting around to going through the Costa Rican consulate for a power of attorney.
Your property manager in Costa Rica needs the power to hire and fire the gardener or caretaker
Special powers of attorney
Of course Susan doesn’t want to give her property manager full power of attorney, because that will allow the property manager to also sell the unit and keep the money. So she should give the property manager certain SPECIAL powers of attorney such as:
• Sign and terminate lease agreements in her name.
• Evict a non-paying tenant or one who doesn’t follow the agreed on details in the lease agreement.
• To request connection, reconnection or any other diligence with the utility companies, including the local power company, the water company, cable TV and internet.
• To represent the owner in the HOA meetings with full power to vote.
• To represent the owner in any tax matters.
• To hire and fire employees like gardener and house keeper in her name, if and when needed.
• To contract a handyman, a plumber or any other repair people when necessary, for the general maintenance of the property and repairs.
Your property manager in Costa Rica needs the power to hire and fire the cleaning lady
Not giving your property manager the necessary tools to diligently manage your vacation home can turn into a costly affair. Travel costs, attorney fees, document handling on a distance and other fees can make you incur in tremendous amounts of delays and money.
Discuss your options with your attorney and your property manager before closing on your vacation home purchase.
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I DO want to remind our readers that we appreciate any referrals you can send us. I know you all meet people on the plane, in the supermarket, at yoga, at the gym, at the Blooms ladies club, at the potluck organized by your community. Please remember the GoDutch Realty agents when you talk about your home in Costa Rica, when you meet someone who wants to purchase one, we appreciate it.