Why Water Concessions Are Critical in Costa Rica: Don’t Lose Your Sale—or Stay on the Market Forever!

When you list a property in Costa Rica, one of the first questions a buyer will ask is, “Does it have a water concession?” If the answer is no, you risk losing the sale—or worse, staying on the market indefinitely. In a country renowned for its lush landscapes and abundant rainfall, water access might seem like a given, but securing a legal water concession is a complex process that can make or break your property’s appeal. Let’s dive into why water concessions are non-negotiable, how they impact building permits, the delays that can derail a sale, and workarounds for navigating this challenge.

The Buyer’s First Question: Water Access

Costa Rica’s real estate market is hot, especially for expats and investors seeking a slice of *pura vida*. But buyers here are savvy—they know water access is a dealbreaker. Without a water concession or a letter of water availability (*carta de agua*) from the Costa Rican Institute of Aqueducts and Sewerage (AyA) or a local ASADA, your property might as well be a desert mirage. Buyers want assurance they can build, live, or develop without legal or logistical headaches. If you can’t provide that assurance, they’ll move on to the next listing, leaving your property to languish on the market. In a market where 60% of offers come within the first week, hesitation over water can cost you a quick sale—or any sale at all.

Water Concessions and Building Permits: A Non-Negotiable Link

In Costa Rica, water is a public resource, governed by strict laws like the Water Law No. 276 of 1942 and Executive Decree No. 35884-MINAET 2010. To extract water from a river, spring, or well, you need a water concession from the Dirección de Aguas (DA) under the Ministry of Environment and Energy (MINAE). This isn’t just a formality—it’s a prerequisite for most building permits. Municipalities across Costa Rica’s 81 cantons often refuse to issue permits without proof of legal water access, even for off-grid properties.

For example, if you’re selling a rural lot in Guanacaste and the buyer plans to build an eco-cabin using river water, they might hit a wall. Many municipalities—like those in Nosara or Tamarindo—require connection to municipal water and electricity, citing environmental and public health concerns. This rule has been more strictly enforced since 2014, when the government cracked down on informal water sources. Without a concession, your buyer’s building dreams are on hold, and they might walk away rather than deal with the hassle.

Delays That Can Keep Your Property on the Market

Securing a water concession is a slow process, often taking up to a year or more. Here’s why:

- Application Requirements: You’ll need a cadastral map, proof of ownership, and a water flow study conducted during the dry season (December to April). Applying in the rainy season adds six months, as MINAE only measures flow at its lowest.

- Technical Reviews: The DA assesses environmental impact, soil studies, and contamination risks. For wells, a 40-meter setback from roads, septic systems, and property lines is required unless you provide a Filtration/Contamination Study.

- Drilling Permits: If a well is involved, a separate drilling permit takes 3-12 weeks, followed by the drilling itself.

These delays can directly impact your sale. If a buyer intends to build within their first year—say, breaking ground by June after a January purchase—a year-long wait for a concession pushes their timeline to the following year. In Costa Rica’s fast-moving market, where the first 24 hours are critical, this delay can lead buyers to back out, leaving your property stuck on the market. A prolonged listing signals “problem property” to future buyers, further reducing your chances of a sale.

Water Scarcity and Regions Where Concessions Are Unavailable

Even if you’re willing to wait, some areas in Costa Rica no longer distribute water concessions due to scarcity. Guanacaste, for instance, faces severe dry-season shortages, with rationing common in tourist-heavy spots like Tamarindo, Nosara, and Playa Flamingo. In metro San José, from Desamparados to Alajuela, water rationing affects hundreds of thousands annually. Other reasons for limited concessions include:

- Overuse: Agriculture, which consumes 53% of Costa Rica’s water, often strains local supplies.

- Population Growth: Tourism and urban expansion have spiked demand, especially in coastal areas.

- Climate Variability: El Niño events reduce water availability, as seen in hydropower drops in 2024.

- Regulatory Restrictions: Since July 2018, AyA has halted new concessions for developments not tied to a local ASADA, leaving many property owners in limbo.

In the Costa Ballena region (Dominical, Uvita), new concessions are often denied unless properties connect to an ASADA system—a process that can require costly infrastructure upgrades. In parts of Guanacaste, authorities outright refuse alternative sources like rivers or wells due to scarcity, making concessions nearly impossible to obtain.

Workarounds: Non-Permanent Structures and Other Solutions**

If a water concession isn’t feasible, there are ways to make your property more appealing to buyers:

- Non-Permanent Structures: These are structures that don’t require a traditional building permit, like tiny homes on wheels, yurts, or modular cabins. They’re classified as “temporary” and often bypass municipal water requirements. However, there are caveats:

- You may still need a D-1 or D-2 environmental evaluation from SETENA, especially near water bodies or protected zones.

- Local enforcement varies—some municipalities might challenge long-term use of “temporary” structures.

- In the 200-meter maritime zone, zoning laws still apply, and illegal builds risk demolition.

- Rainwater Harvesting: While not accepted for building permits, Costa Rica’s abundant rainfall—enough to supply every person on the planet with 15 gallons daily—makes this a viable off-grid option. Buyers can use it as a supplementary source while pursuing a concession.

- Artesian Wells: Hand-dug wells (up to 21 meters deep) don’t always require a concession for domestic use, though they must be registered with MINAE. They take about six months to approve and cost around $6,000.

- Concession in Progress: Some municipalities accept a *concession en trámite* (in progress) for a permit, requiring an approved environmental permit and a “Received” notice from the DA. This can be done in 2-3 months, speeding things up.

Additional Insights on Water in Costa Rica

- Hydropower Connection: Water concessions tie into Costa Rica’s energy grid—68% of the country’s electricity comes from hydropower, with Lake Arenal producing 70% of the nation’s power. Water scarcity can thus affect both building and energy stability, adding another layer of complexity for buyers.

- Historical Context: Water laws date back to 1942, but enforcement was lax until the 2010s. Many rural properties historically used “rogue” water sources without permits—a practice now under scrutiny as Costa Rica modernizes its resource management.

- Environmental Protections: MINAE’s strict rules, like setback requirements and soil studies, aim to protect aquifers from contamination and ensure long-term sustainability—a priority in a country where 25% of land is protected.

Final Thoughts

In Costa Rica, a water concession isn’t just a legal requirement—it’s a selling point. Without one, your property risks sitting on the market forever, as buyers will balk at the uncertainty and delays. If you’re selling, secure a concession or at least a *carta de agua* before listing to avoid scaring off prospects. If you’re in a water-scarce area like Guanacaste or Costa Ballena, explore workarounds like non-permanent structures to make your property more buildable. Work with a local attorney and real estate agent to navigate the process, and be upfront with buyers about the water status. In a market where water is the first question, having the right answer can mean the difference between a quick sale and a stalled dream. Don’t let your *pura vida* property become a cautionary tale—make water your priority!

Arcadia Team