Hard Times

ISSUE #771: July 28 - Aug. 3, 2019


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

Web: https://www.residenciaslosjardines.com
Emails: info@residenciaslosjardines.com

rentals & sales

Paradisus Condos / Rohrmoser
Visit our website

Paradisus Condos - click to visit

Each of the units consists of two bedrooms / two bathrooms, and a large living/dining/kitchen area. The floor plan of each of these units has eliminated the optional "den / office" divider. The result is a larger area offering more flexible furniture arrangements while still maintaining the option of including an office area. At 105m2 plus two parking spots each and storage locker, they offer a great opportunity for someone seeking views, security, central location, and first class, all round living...

Semi furnished unit: For sale: $235,000
Fully furnished unit: For sale: $245,000
Floor 12 -west view

Market activity
sales & rentals

Sales: Los Jardines: Units #114, #116 and #124


Paradisus: Nothing available

Los Jardines: Units #106C, #106D and #113

Residencias Los Jardines
property management, rentals & re-sales

Unit #114: $ 199,000 / See Unit
Unit #116: $ 195,000 $ 189,995 / See Unit
Unit #124: $ 125,000 / See Unit

Unit #106C: $ 950 mo. / Available immediately / See Unit
Unit #106D: $ 1050 mo. / Available immediately / See Unit
Unit #113: $ 1,200 mo. $ 1,150 / Available immediately / See Unit

For sale

UNIT #114
$ 199,000

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

This 2 bedroom/2bathroom,1,290 sf single floor end unit home includes a 150 sf front terrace plus parking for one car. This house is fully air conditioned and has recently been professionally decorated by international decorator Alcides Graffe and has undergone a complete renovation—new modern furniture, finishings, window coverings, and art work by Carlos Gambino. It is arguably the nicest furnished unit at Residencias Los Jardines and only steps from the pool

UNIT #116
$ 195,000 $ 189,995

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.

UNIT #124
$135,000 $ 125,000

Total Area (Sq Ft): 662
Total area (Sq M): 61
Bedrooms: 1
Bathrooms: 1
Floor(s): 2nd Floor
Type: Semi-Detached
Furnished: Yes

This 662 sf, + covered parking for one car, is a one bedroom home on the 2nd floor overlooking the large pool. It is ideal for a single person or couple.

For rent

UNIT #106C
$ 950 mo.
Available immediately

Total Area (Sq Ft): 1250
Total area (Sq M): 120
Bedrooms: 2
Bathrooms: 2
Floor(s): 1
Type: 4-plex
Furnished: Yes

This is a fully furnished 2-bedroom unit situated in a 2-story building, which has two units on the ground floor and two units on the 2nd. floor. Each unit is the same size (1,250sf) divided into 800 sf of interior space and 450 sf of covered front and back terraces. Units 106A and B are on the ground floor; Units 106 C and D are on the 2nd. Floor. The solid masonry demising wall (common wall) as well as the 5” concrete slab prevent sound transference.

UNIT #106D
$ 1050 mo.
Available immediately

Total Area (Sq Ft): 1227 + parking
Total area (Sq M): 113 + parking
Bedrooms: 1 + den (bedroom possible)
Bathrooms: 2
Floor(s): 2nd. floor
Type: 4-plex
Furnished: Yes

This 2nd story, 1,227 sf (113 m2 + one parking space) is a georgous home with one of the best views at Los Jardines. The very large front covered terrace faces east and is suitable for entertaining; the off-bedroom covered terrace faces west for sun sets. This very tastefully furnished and fully equipped home offers a lifestyle envied by many.

UNIT #113
$ 1,150 mo. price reduction
Available immediately

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. It is attached on one side by a 6 inch cement demising (common) wall, which prevents sound transfer. The three other sides allow light, ventilation and garden views.

Our Lives

Rainy Season... Actually, this is another very dry "rainy" season. We have been watering for the past several weeks. Yesterday we had a slight rainfall... but this is the first in several weeks in our area. I have not heard any national statistics but on the other hand, I have not read anything about flooding and road blockages due to slides and / or washed out bridges so I feel that so far, this is another dry rainy season.

What Happened This Week

Vacancies: Another week and not one inquiry...

Hard Times: We continue not to see any clients. Our vacancies continue. Last Sunday we had a long term tenant who held a birthday party at the pool for their child -the music level was beyond, way beyond, reasonable. He became upset when told to turn it down... he is leaving... an owner insists her dog is not responsible for dog poop... well, the piles are right next door to their house, we have two eyewitnesses, and there are only two other dogs which are both accounted for... so who do I believe???? big fight coming... A long time agent who, over the years, has given me lots of business... but nothing over the past several years is looking for a very low rent home in exchange for preferential clients and no commission charges... his explanation is that it is too difficult to do business in this country and people / companies are just closing and leaving (he noted GAP (clothing chain) closed down and left // The would-be-buyer for La Trinidad, disappeared when it came time to sign.. // Cost of gas (already the highest in Central America -is increasing substantially / reporting requirements and new taxes are chaotic // I am thinking of closing down my little business and going underground into a shoe box like 42% of the work force // The municipalities in our area have bought millions of gallons of yellow paint which they are busy slapping over large swaths of curbs which will be policed for parking fines (from nothing to substantial fines) and white paint designating parking spaces for which you have to buy a parking ticket (if you can find where to buy them)...this is a new source of revenue for cities (they have just figured this out)...Santa Ana is building a big new, fancy municipal headquarters and has just taken a slightly used soccer field in the center of town and turned it into an extensive public park // The apartment-hotel in the middle of Santa Ana occupying a full block and which had few clients over the past 20 years has been replaced by a huge new MaxiPali (Walmart owned chain) // I know of three ticos who have no jobs / no income / and are wondering how they will survive... unemployment is up substantially in the country (see article below) // The colon keeps rising against the US dollar -everywhere else in the world the US dollar is appreciating -we have now had a 40 colon drop about an 8% increase in our cost of living... // for the first time ever that I can remember, we now have several owners who are having to funnel money back into their units...they withdrew too much and are running vacant... with no clients in sight...

A friend says this country is in for a "reset" like the US in 2008-9. While we read a few things which could imply this could happen (see articles below and in previous letters) we also see things living here... while interpretation is not an exact certitude, enough observations and experiences begin to raise concerns...

Property Management: The client who flew home to deal with a pregnancy returned because her insurance was not accepted... She and husband have moved back in temporarily...

"La Trinidad" Foreclosure: When it came time to close, the would be purchaser disappeared. Guess I will have to close on it this week and get serious about marketing it. I say "close" because it seems cost / time effective to buy out the idiot debtor... and move on... if he wants to be difficult, o.k., I can foreclose and cause him problems for a long time... I really don't care...

Hotel Friends: We have friends in Jaco. They came to CR about the same time as us...we were neighbors in Toronto but didn't know each other at the time but ended up having a mutual friend. They built and ran a hotel... got tired and wanted to sell.. After several years and continued price reductions, they accepted an offer from an American woman... she has become the purchaser from hell. She has lied to them, defaulted on them many times and has now defaulted on a major payment and gone silent. They will proceed to foreclose -it will be expensive. time consuming and energy draining... Their future is tied up in the balance owing...

Nitty-Gritty Shi...ty - Shi..ty: We are still trying to figure this out. We are fairly sure no money is missing but also very aware that expenses were not pick up and our current system of account administration / organization is definitely screwed up...

News Items of the Week


1. CC payment defaults: They are increasing in amount and duration.

2. New Investment: Only 5% of companies plan new investment this ..construction, mfg and service sectors being the least inclined to invest.

3. Exchange Rate: Colon continues to strengthen against the dollar. Ever where else in the world, the dollar is rising...and the exchange rate is predicted to get stronger when the Eurobond float hits the local economy.

4. Gas Prices: Going up..we are already the highest in Central Am.

5 / 6. Unemployment: Officially at 11+% / Informal employment at 46%--seems like a very high percentage.

7. Battle at the Border: Each country trying to get a buck from the workers...in likely contravention of international agreements. Seeing the lengthy delays that truckers face crossing the borders in each direction makes one want to scream...

8. MOPT and design criteria: Over designing without regard to reality...engineering with blinders...these guys and CONEVI seem to be the product of years of interbreeding...

1. Late payment more distress to households with dollar credits

Debt default was less than 2% of bank loans in mid-2016, now exceeding 3.5%, according to Sugef. Balance due is $ 6,000 million, 89% of families have income in colones.osta Rican families have debts in dollars for $ 6,000 million withosta Rican families have debts in dollars for $ 6,000 million with

Costa Rican families have debts in dollars for $ 6,000 million with financial institutions. 89% of that amount is owed by people whose income is colones. Photo: Mayela López.

The non-payment or arrears of loans in dollars of Costa Rican households met, last May, three consecutive years of increase.

The rise of the delinquency indicator to more than 90 days coincides with an increase in the exchange rate and in international interest rates used as a reference for foreign currency loans.

The default of families with financial institutions was less than 2%, in mid-2016; while for the same period this year it is above 3.5%, according to the General Superintendence of Financial Institutions (Sugef).

Meanwhile, the indicator for operations in colones remained, in the same period, below the normal percentage of 3% of the total balance of money provided by financial institutions under the supervision of the Superintendency.

The data of the Sugef only include the credits in dollars given to people by public and private banks, cooperatives, financial, mutual and Caja de Ande.

“There is a proportion of debt in dollars to non-generators really overwhelming, that is, ¢ 3.1 billion, in dollars, are owed by non-generators. This entails additional risks to what could be a debt in colones, in the same that people generate ”. Bernardo Alfaro, head of the Sugef.

Bernardo Alfaro, head of the Superintendency, acknowledged that the growth of household default is worrying, which has coincided with a stagnation of family income during the last eight years, and the increase in unemployment.

"In local currency the arrears of the families are stable, but the arrears of the credits of the families in dollars are firing very rapidly," said the official.

Alfaro explained that the main problems have been detected in higher value home loans, that is, those of more than $ 200,000.

Until last May, the balance of loans in dollars to households was ¢ 3.54 billion, that is, $ 6.187 million at the exchange rate of ¢ 572.61 on Friday, July 26.

Foreign currency credit began, since mid-2016, a slowdown and reports negative variations since last December.

2. Only 5% of entrepreneurs will make new investments this quarter

Only 5% of entrepreneurs will make new investments this quarter, according to a study by the UCR. They will only carry out the necessary investments for the operation of the companies.

On the other hand, the percentage of entrepreneurs who say they will not make new investments increased from 85.5% to 91.7% between the second and third quarters. The most pessimistic sectors for new projects are construction, manufacturing and services.

There is a 2.5% drop in expectations for more investment compared to the previous quarter. The same UCR survey indicates that the percentage of businessmen who expect the exchange rate to remain the same in the period from July to September of 2019, is higher than those who expect increases or decreases.

3. Dollar price has been falling for 20 days in Monex

For the 20th day in a row, this Monday the price of the dollar fell in the Monex wholesale market. It closed the session at ¢571, the lowest price of 2019, which the currency had not seen for 11 months.

During this month, the fall is approximately ¢10 in this market.

On the other hand, in the windows of financial institutions, the price is around ¢578, also one of the lowest of the year.

The market is currently expecting the US Federal Reserve to lower its interest rates for the first time in 10 years and the announcement would be official this week, which, added to the arrival of the Eurobonds, would cause the exchange rate to Keep going down.

In addition, there is less demand for this currency and therefore, the price tends to fall.


4. Fuel prices will rise â‚¡31

The Regulatory Authority of Public Services (Aresep) approved a rate request raised by the Costa Rican Petroleum Refiner (Recope) to increase the price of fuels. According to the press office of the regulator, the increase has already been submitted for publication in the official Gazette.

The petition was filed on July 12th and with the changes, the prices will be as follows:

-Plus 91 gasoline will increase â‚¡26 per liter as it goes from â‚¡638 to â‚¡664.

-Super gasoline will increase â‚¡31 per liter as it goes from â‚¡659 to â‚¡690.

-The liter of Diesel will go from â‚¡527 to â‚¡ 541, â‚¡14 more.

These requests are submitted every second Friday of each month and the behavior of the international price of each fuel is considered, as well as the variation in the dollar exchange rate, as detailed by the refiner.

5. Costa Rica has the most expensive gasoline in Central America

The firm Picodi conducted a market study in Latin America and found that Costa Rica has the most expensive gasoline in Central America.

In the country, the average price of each liter is $1.04, while in Honduras it is $ 1.02; in El Salvador it costs $ 0.9; in Nicaragua $0.99, in Guatemala $ 0.89; and Panama $0.89.

With these data and taking into account that Costa Rica’s average salary is $768 per month (around ¢456 thousand), 737 liters of fuel could be purchased.

The price of gasoline depends on many factors. For example, the price of oil in the international market, taxes to be paid and the margin set by the owners of the gas stations,” reported the Picodi firm.

6. Unemployment increases: 296 thousand people have no job

This Thursday, the National Institute of Statistics and Census (INEC) announced that unemployment in Costa Rica increased and now 296 thousand people have no job, that is, 11.3%

The increase was 0.6 percentage points compared to the first quarter of 2019 and 3.3 points against the second quarter of 2018.

For the second quarter of 2019, 296 thousand people are unemployed, 90 thousand more people actively sought a job and did not find it compared to the second quarter of 2018. Of the total unemployed, 147 thousand were men and 149 thousand women,” explained INEC.

The year-on-year increase in the unemployed population is a result of the increase in the labor supply by people, both in men and women and in both areas of residence.

For the second quarter of 2019, the percentage of employed persons with informal employment was 46.3%. Thus, the population with this condition was close to one million, of which 593 thousand were men and 419 thousand women.

7. Costa Rican transporters in Nicaragua

The Ministry of Foreign Trade (Comex) initiated the legal process for the improper collection of $ 50 made by the Nicaraguan Customs Directorate to Costa Rican cargo carriers entering that country.

The absence of a satisfactory response from the northern country resulted in the decision to formally request this procedure.

We are sure that the charge is a violation of the international trade commitments that the Central American countries assume in our regional integration process. The decision to raise this case responds to our firm commitment to the defense of the interests of the country and our desire to apply the mechanisms we have designed in the Central American region to elucidate the controversies,” said Diaylá Jimenez, head of Comex.

The situation began last March, when Nicaragua began charging this “toll” in retaliation for an alleged charge made in Costa Rica at the customs office of Peñas Blancas, which was denied by the Customs Directorate.

The first phase in this process is a consultation meeting, in which an attempt will be made to reach an agreement through dialogue.

If an understanding is not reached at this stage of the process, Costa Rica may proceed to request the establishment of an arbitration panel.

8. MOPT suspends transport plan that makes road construction more expensive

Program sets requirements that raise costs that are not justified; Government will review goals to make adjustments

The route between Paquera and Naranjo beach has a cost of $ 1.2 million per km.

The asphalting of the 21.5 kilometers between Paquera and Naranjo Beach, costs the Ministry of Public Works and Transportation (MOPT) $ 27.5 million, that is, just over $ 1.2 million per kilometer of road.

For the Government a route like that should cost a quarter.

This type of cost overruns forced the MOPT to rethink the conditions established by the National Transportation Plan 2011-2035, whose specifications, said the head of that ministry, Rodolfo Méndez, do not conform to the national reality, so he made the decision to suspend the application of said plan until it is reviewed in detail.

The hierarch's announcement was made during his presentation at the infrastructure forum organized by La Nación the previous Tuesday.

“We have made the determination with the Minister of Planning (Pilar Garrido), to suspend the National Transportation Plan in its application until it is reviewed, because it was leading us to the generation of cost-effective works and the impossibility of carrying out works to promote development by the characteristics of that officialized plan.

“It is not possible to pave a road of 200 vehicles a day, because it is indicated by a development plan, it has an investment of $ 1 million per km, because it is not justified, nor does this country have the conditions, nor is it what the country requires to promote its development,” he said.

The National Transportation Plan classifies the national road network into two types of roads, according to its functions: strategic road network, which is defined according to that document on the routes through which most of the national and international traffic circulates and the complementary road network , whose function is to guarantee the final connection.

These routes are further subdivided into other types such as basic access networks, high capacity network and territorial integration connectors.

The specifications criticized by the minister for these types of roads, are that for example the plan establishes that the roads that are located within the high capacity network must have speeds of 120 kilometers per hour, which in turn imply a series of Complementary works, which end up raising their costs.



One of the cases whose cost would be out of all budgets is the so-called “route of the sun” for which Guanacastecs have waited years.

It is more than 230 kilometers of road that border the Nicoya peninsula and ends in Santa Cruz.

“That is considered a medium capacity road and according to the established requirements, if one is going to build, it has to be designed for 120 km per hour, it establishes rules that are very expensive and that in practice are not justified for cost that is established, ”said Méndez.

Another aspect that affects the development of projects complying with the standards mentioned in the plan, has to do with expropriations. Well, in some cases, such as the San José-San Ramón road corridor, it would involve very large land acquisitions, which would make it financially unfeasible.

The Minister of National Planning and Economic Policy (Mideplán), Pilar Garrido, mentioned that the suspension of the plan is temporary and only affects what refers to construction and asphalting of roads, that is, proposals related to public transport, ports and airports are maintained.

“What is going to be done is to analyze with experts and internally carry out a technical study with our support, to identify practical improvements and how much without compromising on quality, these standards can be rethought. The rest of the planning remains intact,” Garrido explained.

The head said that it is possible that if some costs are reduced, new works not included in the plan can be included and some projects managed with greater agility.

“It is not to dismiss the study, it is simply to cancel the application as long as a revision of these norms is not made to adjust them to the national reality, it is not possible to start off roads in low traffic ballast and believe that spending $ 1 million or more per km implies that one is going to have a greater development, ”added the MOPT minister.

The minister said that one should also take advantage to review the plan integrally, because in these 10 years the progress has been "relatively low."

The announcement of the suspension of the plan was made by the MOPT chief during the infrastructure forum, in which former tourism minister Mauricio Ventura, CFIA director Olman Vargas and Infrastructure expert Olman Vargas also participated. The conversation was moderated by the director of La Nación Armando González.

The specifications of the National Transportation Plan, also represented an obstacle for the National Road Council, as it established requirements such as feasibility studies on low traffic roads, many of them necessary to promote tourism or agricultural activity.

The director of that council, Mario Rodríguez, explained that the norm is made for the future, but in the meantime work must be done with existing resources.

"Improving the pavement to improve the mobility of vehicles and people on that pavement, as the standard is made for the future does not allow that, meanwhile we have to go step by step," said Rodriguez.

The main objective, said the director of Conavi, should be that light vehicles can be used 12 months of the year.

For his part, Rodolfo Méndez added that while the plan is being analyzed, Conavi will be able to meet the needs of many sites, making better use of resources.

“In many places there are contracts to provide maintenance by adding stone material (ballast) that for saying something is worth ¢ 700 million and paving it possibly costs $ 1.3 million (¢ 780 million), but it has been interpreted that there is an impossibility by the rules of to be able to do that type of management because it requires the approval of the Mideplan and how much, that is fine but that are norms and with feasibility studies that take into account criteria of a social nature, ”he said.

The minister said they are currently working on three test projects that had to be executed through the MOPT, given the impossibility of the plan.

It is about 10 kilometers from the so-called “milk route” in Guanacaste, which was awarded for ¢ 1,450 million, that is, around $ 250,000 per kilometer.

"And it is going to build a paved road that for the traffic it has is more than adequate," he said.

In addition, he said, studies are being done to tender 10 kilometers of Route 239 in Puriscal and another in the Coto Brus area.


Brian C. Timmons
Property Manager RLJ and Newsletter Author

Costa Rica:
Cell: (+506) 8-455-59-35
Land line: (+506) 2282-4142 Ext. 101

VOIP: (+416) 461-2203

Web: https://www.residenciaslosjardines.com
Emails: info@residenciaslosjardines.com

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