Key Insights from the May 2024 Webinar
Building a home or commercial property in Costa Rica is a complicated process that requires careful planning and understanding. In the Costa Rica Investments May 2024 webinar, experts Richard Bexon and Erick Corrales provided valuable guidance on navigating each stage of construction.
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The Design Phase:
Establishing Budget, Goals, and Selecting the Right Architect
The construction process begins with the design phase, where your vision takes shape through work with an architect. Start with clear goals and a well-defined budget to guide the project's direction. Choosing an architect who understands your vision and can work within your financial constraints is very important, as they will be your partner throughout the entire process.
After selecting an architect, create a program outlining the specifics of your project, including the house size, number of rooms, and desired features like a pool or gym. Having these details upfront makes the design process faster and ensures everyone is aligned from the beginning.
A clear and consistently updated budget is needed to protect against unexpected expenses. Architects, being creative professionals, don’t always consider cost constraints, so regularly reviewing and adjusting your budget during the design phase helps avoid surprises and keeps the project on track financially.
Construction Documents:
Following the design phase, the next step involves creating detailed construction documents that serve as the project's blueprint. These documents cover all aspects of construction, from structural elements to interior finishes, and are essential for guiding the builders and obtaining necessary permits.
During this stage, architects collaborate closely with your engineers to ensure that designs are structurally sound and meet all safety requirements. Collaboration helps identify and resolve issues early, hopefully preventing costly delays and modifications during the construction phase.
Permitting Process in Costa Rica
Securing permits in Costa Rica can be relatively quick, often taking two to three months, provided all documentation meets local regulations. Starting this process early and ensuring all documents are accurate is crucial to avoid delays that can impact your project timeline.
Common challenges in the permitting process include poorly completed applications and document errors. Your architect and engineer should make sure this is done correctly.
Two critical documents in the permitting process are the water letter and the "Uso de Suelo." The water letter confirms water supply for your project, while the Uso de Suelo outlines permissible construction activities on your property. You MUST have these documents for your project to go correctly.
The Bidding Process:
Collecting bids from multiple construction companies ensures you receive competitive pricing and can assess the capabilities of different contractors. A thorough bidding process helps in selecting a contractor who offers the best combination of quality and value. This will help you understand which construction contract is best for you.
Understanding Contract Types
CostPlus contracts cover construction costs (labour) plus a fixed fee for the developer, and you and your team will source materials at the best price for you. This can lead to higher expenses if not carefully managed.
Key-in-Hand contracts offer a fixed overall price, delivering predictability but less flexibility for changes once construction begins. Evaluate both options to determine which aligns best with your project's needs.
Value engineering involves reviewing designs and materials to identify cost-effective alternatives. This approach ensures that the project stays within budget while achieving the desired standards and functionality.
Contracting:
A robust construction contract should include clear payment schedules, penalties for delays, provisions for currency fluctuations, and holdbacks. These elements protect both the client and contractor, fostering accountability and clarity throughout the project.
Avoid large upfront payments to reduce financial risks if the contractor underperforms. Instead, tie payments to specific project milestones, releasing funds as each phase of construction is satisfactorily completed.
The Construction Phase: Bringing Your Vision to Life
Regular inspections by engineers are essential to maintain high construction standards and adherence to project specifications. Having consistent inspections allows for issues to be caught early and fixed quickly.
Appointing a dedicated project manager can significantly enhance coordination between you and the construction team. A project manager oversees timelines, manages budgets, and addresses daily operational challenges, ensuring that the project is completed in the way you want.
Top Recommendations for Successful Construction in Costa Rica
Foster a Strong Relationship with Your Architect: Effective collaboration and communication with your architect are fundamental for realizing your vision successfully.
Maintain Rigorous Budget Management: Consistently monitor and adjust your budget throughout the project to prevent financial overruns.
Conduct Detailed Bid Evaluations: Assess multiple bids thoroughly to select the most qualified and cost-effective contractor.
Develop a Solid Construction Contract: Ensure your contract comprehensively covers all essential clauses to safeguard your interests.
Prioritize Regular Quality Checks: Schedule frequent inspections to uphold construction quality and promptly address any issues.
Conclusion
Building in Costa Rica presents an exciting opportunity but requires diligent planning and informed decision-making. By understanding each phase of the construction process and implementing the strategies outlined in this summary, you can navigate potential challenges effectively and achieve a successful and satisfying build.
If you have any questions please reach out to us at info@investingcostarica.com
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