Since April 2024, the real estate sector in Costa Rica has faced significant regulatory challenges related to the provision of potable water and sewerage services in residential projects operating under condominium regimes.
These challenges stem from reforms introduced by the Public Services Regulatory Authority (ARESEP), which have significantly altered the billing methodologies and tariff structures applicable to aqueduct services, particularly affecting condominiums with master meters.
On April 17, 2024, ARESEP published the Technical Regulation for the Provision of Aqueduct, Sanitary Sewer, and Hydrant Services (Regulation No. 21), which reformed the billing methodology by eliminating the division of consumption by individual units. Instead, charges are now calculated based on the condominium's total consumption as a single, indivisible entity. This change led to an immediate and sharp increase in billing. In some cases, increases of up to 300% were reported, prompting multiple legal and administrative actions from affected users. As a result, ARESEP suspended the application of key articles of the Regulation through Resolution No. RE-0078-JD-2024, establishing a 12-month review period that extends until July 17, 2025.
Subsequently, ARESEP has issued additional resolutions modifying tariffs, consumption categories, and billing methodologies applicable to the Costa Rican Water and Sewer Institute (AyA), the Public Utilities Company of Heredia (ESPH), and ASADAS (community-based water administrators). Among the most relevant changes are: the creation of new tariff categories — including the Large Residential Consumers (T-GCR) category specifically for residential units in condominiums —, the restructuring of consumption blocks with tiered tariffs, and the overall restructuring and increase in applicable rates.
In the case of mixed-use condominiums or projects where it is technically unfeasible to install individual meters for each unit, service providers apply the tariff corresponding to the highest-cost category among the applicable uses. This has contributed to further increases in billing for these developments.
It is important to note that ARESEP is expected to issue additional resolutions and is currently working on a proposed regulation to amend the articles suspended under Resolution No. RE-0078-JD-2024.
For condominium developers and administrators, this situation has created significant legal and financial uncertainty, requiring a review of internal procedures regarding how potable water charges are prorated and passed on to individual residents. In this regard, it is important to emphasize that the distribution or potential individualization of water charges within a master-metered condominium falls strictly within the realm of private law, and must be defined by each condominium association. This matter does not fall under ARESEP’s jurisdiction or authority.
Additionally, there have been cases in which mixed-use condominiums have been reclassified under the highest-cost tariff category — typically the industrial category — without such classification accurately reflecting the nature of the actual consumption. This has led to substantial increases in billing and has forced administrators to file complaints and undertake additional efforts before the respective service providers.
These ongoing regulatory reforms are impacting cost management structure and the financial planning of condominium administrators. In this context, it is essential that stakeholders in the real estate sector understand the legal and financial implications of these changes and maintain active monitoring of future ARESEP resolutions.
By Lucía Pineda
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