An unavoidable hazard in the past has been governmental expropriation of land, predominantly for the purposes of establishing or enlarging national parks or indigenous reserves. While this is perhaps not the greatest hazard associated with land ownership in Costa Rica, it has been a very well-publicized and expensive danger due to the fact that the government does not have a history of fair and quick reparations for the expropriated lands.

Prior to 1995, no single law governed expropriation matters in Costa Rica. The dispersed nature of the law, along with general judicial and executive branch inefficiency, has contributed to the protracted nature of many expropriation disputes, some of which have gone on for more than a decade without resolution.

The prospects for future expropriation cases may be more favourable, for on 8 June 1995, the Nueva Ley de Expropriation (New Expropriation Law, hereafter referred to as NLE) No. 7495, was signed into law. The stated purpose of the legislation is to replace with a single law the several laws that allow the expropriation of private property by any state institution. The new law seems aimed primarily at ensuring that expropriations take place only after full and adequate payment is made, regardless of the nationality of the holder of such property. Also, while an earlier bill was aimed at making expropriation easier, the new law imposes obligations and restraints on the state and its institutions (Quiros, 1995). A few of the more important provisions of the new law are: (1) the return of the property within ten years if it is not used for the purpose for which it was intended (NLE Art. 16); (2) only one month is granted to the tax office to do an appraisal of the property to be expropriated (NLE Art. 21); (3) payment in cash is required unless otherwise agreed upon (NLE Art. 47); (4) only six months are allowed to fully complete registration of the property (NLE Art. 20); and (5) local and international arbitration are contemplated (NLE Art. 27). The possibility of international arbitration could permit cases to be brought before the International Center for the Settlement of Investment Disputes (ICSID). (Quiros, 1995).

In sum, it appears that if expropriation of land is to occur in the future, the owner may be in a better position than in the past to receive a prompt and equitable settlement. It must be stressed, however, that the new law has yet to be tested and it remains to be seen whether it will prove to be a dramatic improvement over the prior laws.

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Squatters
Expropriation