The Grind Continues!

ISSUE #980: Feb. 11-24, 2024


Brian Timmons, Newsletter Author
Brian Timmons

Dear friends,

When I started Residencias Los Jardines, I started writing a weekly newsletter -determined to tell all the good, bad, and the ugly. I knew some readers would be interested in the construction process. I expected others might be interested in the lifestyle of two people who had decided to live outside the box. For others, the adventures of Lita, the parrot and the cat took on an entertainment saga all its own.

Residencias Los Jardines is finished. We periodically have re-sales and rental availability. Some readers may be interested in this information.

Brian Timmons
Developer / Property manager
Residencias Los Jardines


Market activity
sales & rentals

Sales: Los Jardines: a 3 mo. availability of unit #105

Los Jardines: Nothing available
Paradisus: Nothing available

Residencias Los Jardines
property management, rentals & re-sales

Unit #116: $ 169,000 / See Unit

Unit #105: $ 1,350 mo. / 3 mo. beginning March 15 / Two bedroom, one bathroom, detached, single level, furnished / See Unit

For sale

Total Area (Sq Ft): 1290
Total area (Sq M): 120
Bedrooms: 2
Bathrooms: 2
Floor(s): 1
Type: Semi-Attached
Furnished: Yes

This 1,290 sf single floor home includes a 300 sf front terrace plus parking for one car and a separate, secure storage locker. It is and end unit and therefore attached on only one side by a 6 inch cement demising (common) wall, which prevents sound transfer.

For rent
Our Lives

What Happened This Past Two Weeks

Weather: Our summer weather contiues as normal -the past two weeks have seen a lot of wind... it will probably begin to abate... We did have an unusualy and violent thunder / electrical storm one afternoon... it wild for a while but really great for the garden...


1. Repairs: Infrastructure needs constant repairs. This time our mainetance people noticed water in the access pipes to the leech lines were unusually high -something had gone wrong. We spent this past week dealing with it. I am not going into detail about this but I believe it is solved... we'll see.

The center rancho thathed roof needs repairs. All the other rancho roofs are ok... why only one? Not sure but possible because it does not get as much sun (surroinded by large trees) and possibly because palm branches drop on it and damage the thatch... We are patching it but currently, we are out of fan palm leaves we need to finish it. We have another 6 weeks or so to gather more and finish the repairs.

2. Shareholder Meeting: Wednesday is our annual meeting. All info has been sent as well as the agenda. I expect it to be a non-event since there has been no discussion re. the agenda items. The main agenda is approval of the budget... this is a barebones budget as explained and we may not be able to achieve it... it does not allow for "surprises" like the $3,500 theft / repair of the circuit breakers or the recent septic repair... and this is only February... Regardless, all shareholders have been notified and that there will not be any "discretionary" expenses. I have included an article which summarizes the financial difficulties created by the incredible appreciation of the colon...

3. Barrio Escalante Foreclosure: Another person put a mortgage on an office building. After a year or so, the borrowers defaulted. When COVID hit, they had to close down thier trucking business and lay off 88 employees... this took all their operating capital (and our loan) was a blow to them and that blow trickled down to us... We foreclosed on the loan and have been trying to get possession of the asset... the office building... for three years now... The borrowers appealed the first auction and 9 mo later the judge upheld their appeal saying that the court screwed up in 4 significant ways... our lawyer did not catch the errors and we paid the price by having to request another auction... we did so in June of last year... This week we received a notice of auction date... April 11... the notice was again flawed... instead of being listed at $350,000 it was listed at C350,000... a big difference... supposedly, that error has been corrected... how many other errors, I don't know... the people working (?) behind closed doors and behind screens and barriers are largely incompetent... We will ask for immediate possession but I doubt that will happen... in fact, it is not beyond speculation that the borrowers will appeal a decision if it goes against them... why? for what purpose? we cannot figure out their gameplan... and that bothers me. However, in the meantime and hoping that we may get possession, I am urging that we get the info we wil need to market the property so that IF /WHEN we get possession, we can hit the road running...

4. Orchids: I think we can conform that this project was successful. The orchids are blooming beautifully. To protect them from squirrles and from wind whip, we are building wire cages around them...

5. Paradisus: The administration continues to be a mess... Another owners meeting is to happen Wednesday... they got 39% of the owners last time... not enough to make any decisions... now they are trying to change the rules but that change requires 100% so that is not likely to happen. Meanwhile, they are behind payments on elevator mtnc, electricity and water... They have started to crack down on delinquent owners by shutting off their hot water and not announcing deliveries as well as proceeding with legal collection actions. A problem here is, as I see it, the current temporary mgt. has no legal standing so... who knows... a real mess...

News Items of the Week


1 and 2: Exchange Rate: This is a good summary of the Exchange Rate change over the past 18 mo. The effects have been felt by all those living / working here especially if they earn / save / pay in dollars... Since international business operates in dollars and since the year end financial statements are being produced now, I cannot help but believe there are going to be lots of corporate decisions before the government admits that the flood of dollars is due to drug money laundering... In other articles, the governemnt admits they cannot account for 25% of the dollars... they have it listed as "other" in the central bank's accounting system... and since the money is illegal they cannot readily trace the origines. I suggest they look a bogus leases and huge commercial buildins sit empty... I wonder what they are showing as rental income, and where the money came to build a commercial buiilding that can sit empty for years... bogus sales from "high end retailers" in whose shops you never see anyone. So on April 1 the banks are suppose to --and they will-- make anyone with dollars justify their origine... The litle guy is not the source of billions of unaccounted for dollars... but yet that is where the pain will be felt... a number of us believe the next year + is going to be difficult for dollar holders... some believe the current government is intent on cleaning up corruption... we'll see... my cynical believe is that it is part of the culture and part of politics... I am not hopeful... but pain will be inflicted, of that I am sure. As of today, the exchange rate at BAC is 507 / 521 down from 690 in June of 2022...

1. Costa Rica “is world champion” in local currency appreciation

Sectors such as tourism, free zones and exporters lose competitiveness and employment; Business sector asks the government to stop the fall of the dollar.

QCOSTARICA — The sharp drop in the dollar exchange rate in the last year and a half has made Costa Rica the world champion in appreciation of the local currency, the Colon’ according to Gerardo Corrales, economist at Economía Hoy.

Screen capture of the drop in the dollar exchange in the past year. Datawrapper

This means that no other country has appreciated its currency so much in relation to the U.S. dollar.

Between June 2022 and December 2023, the U.S. dollar lost 24% of its value against the Costa Rica Colon, placing Costa Rica in first place in this ranking, ahead of Mexico and Switzerland, by far, given that their respective currencies only appreciated by 13% and 12%, respectively.

As of this Friday, the official dollar exchange reference rate set by the Central Bank (Banco Central de Costa Rica) is ¢512.61 for the buy and ¢517.48 for the sell.

Dollar exchange in December 2022. Screen capture from Central Bank

On June 23, 2022, the reference rate was ¢691.20 for the buy and ¢698.44 for the sell; at the end of December 2023, the rate was ¢519.74 and ¢526.18, respectively.

Dollar exchange in December 2023. Screen capture from Central Bank

Far from being good news, this means that sectors dependent on the global market are rapidly losing competitiveness and money, which translates into a contraction in investment and fewer jobs.

The positive side is that by December of last year, Costa Rica was the country in the Organization for Economic Cooperation and Development (OECD) that reported the lowest inflation, which was even negative at -1.8%.

“Negative inflation is achieved but with a great loss of competitiveness that is destroying the productive sector and will increase unemployment in the medium term. There is no balance,” Corrales said.

“Complications” regarding the dollar exchange rate have been a source of discussion in recent months.

The productive sectors are calling on the government of Rodrigo Chaves and the Central Bank to intervene in the exchange market and control the appreciation of the colon.

“The diversity of our associates forces us to express concern about the impact that the exchange rate is having on a large part of the country’s productive sectors. We believe that a consensual position should be established on the fundamentals on which the relationship between the dollar and the Costa Rican colon should be based, and that it should not affect the stability and economic and social development of the country. A stable and competitive exchange rate that reflects the real value of the national currency can be beneficial, as it helps maintain the competitiveness of exports and imports, attract foreign investment and maintain the economic stability of the country,” said Antonio López, director executive of Fedecámaras – Costa Rica.

The call for attention from the productive sector occurs in the same week in which legislators, economists and businessmen ask the Central Bank to account for the behavior of the dollar exchange.

2. Money laundering in the dollar exchange system is massive and evident

Former minister of the interios and police says that an investigation must start now to stop the entry of more illegal money into the country.

QCOSTARICA — Money laundering from illicit activities such as drug trafficking is not only massive, but also evident in the exchange system, according to Álvaro Ramos Rechnitz, former Minister of the Interior and Police (Gobernación y Policía) during the first government of Oscar Arias (1986-1990).

That is why it is urgent that the authorities investigate the issue appropriately and not ignore it, said Ramos.

The opportunity cost is that more illicit money enters Costa Rica and with it, the dollar exchange rate is impacted even more.

“Without having a diamond mine, oil wells, or five gold mines, suddenly the (U.S.) dollar in Costa Rica is worth nothing. That is completely anomalous. Illicit money laundering not only exists in the country, but it is massive and evident,” said Ramos.

The possibility that drug trafficking has penetrated the dollar exchange system cannot be ruled out.

The alert comes after the Central Bank reported strong growth in the currencies of the account called “Others”, which registered movements of US$5.57 billion in 2023, which meant an increase of 46% compared to US$3.93 billion in 2022.

In that sense, the Central Bank is already investigating the inexplicable origin of dollars.

Currently, almost half (48%) of the dollars exchanged at bank counters have an unknown origin.

“The authorities are not stupid. They know that the country is flooded with drug trafficking, what is strange is that they do not want to get into the problem. I hope that after this an investigation will begin at the legislative and judicial level and that they will then help us at the international level to stop the large launderers of illicit money,” Ramos said.

Ramos pointed out that behind the criminal gangs that kill each other for drugs, there are always professionals in accounting and law who provide their services to hide emerging capital and therefore, this game of cat against mouse becomes very complicated.

“I hope it doesn’t happen in Costa Rica, but in Colombia in 2004, they had the anomaly that the (U.S.) dollar in the black market was cheaper than in the official market, due to the excess of dollars due to illegal activities. At the moment, it doesn’t seem like they are investigating or doing anything significant to stop them,” Ramos said.

Since the end of last week, the issue gained notoriety due to the demands of the productive sectors to know the origin of this increase.

Costa Rica is experiencing a gang war for territory without parallel in the country’s history, which has not only increased the number of murders to record numbers but has also revealed the penetration of drug trafficking in various structures.

In recent days, Sylvia Saborío, a member of the National Council for Supervision of the Financial System (Conassif), expressed the possibility of the entry of illicit activities.

“I think there could be other (financial) transfers that include illicit transactions that are difficult to detect, that could not be estimated, but that could be large. We cannot evade it because we have the dead to prove it,” said the official.

The business sector is among the groups that requested the BCCR for greater detail of the “Others” account.

For business owners, it is vital to know what is happening, since the movement of money in dollars affects their operations.

Previous reports