American Partners With Large Finca

Description of Property

400 hectare cattle farm, ¾ flat or gently sloping pastures, and ¼ jungle patches; no mammalian wildlife to speak of; domestic animals include 650 cows and 20 horses. Two families who work the land live there. Number of crops are grown seasonally: corn, beans, etc.

Location and Ease of Access

Off of Pan American Highway, So. of San Isidro del General about 30 k, approx. 3 hrs. 45 minutes from San Jose by car, decent roads all the way to turn-off from highway (pot-holed pavement from San Jose to turn-off); 4 wheel drive required on access road during the rainy season; must cross a large river (via local boat service) to reach the farm.

Borders and Fence-line

Entire farm is well-fenced and maintained by the workers who live there.

Past, Current or Potential Problems Identified by Owners

None, except for the payroll and management snafus described below. With 14 people living there, including the two large families of the farm hands, there have been no reported squatter or theft-type problems. Moreover, the general area is not known to have systematic or frequent squatter cases.

Land Assurance Services Selected

• Employee Management
• Local Liaison

Reasons for Selection

The owners had been paying a law firm $250 per month to manage the employees, which basically consisted of nothing more than sending one of the lawyers' messenger down to the farm every two weeks to pay all the workers, as well as deliver whatever needed supplies and tools the farm manager had requested on the previous visit.

The firm was also supposed to pay the monthly Social Security for all the employees, the 13th month "aguinaldo," or legally required annual bonus, and advise the owners as to when real estate taxes were due.

However, the owners were extremely dissatisfied with the overall service. Often (and invariably during intense rainy periods) the messenger would show up a few days or even up to a week late, hugely inconveniencing the people who depended on their wages. Part of the problem was that the law firm was not geared to perform this kind of service, and was only doing it as a favor to their very good clients.

Compounding the irritation between employees and owners, the law firm would often 1) fail to inform the owners of new situations needing to be dealt with, as well as 2) delay responses to faxes from the US for weeks at a time (phone calls tended to be equally unproductive), which often left the owners in the dark as to what was going on currently.

Before hiring Mr. Barrantes, the farm's owners even tried switching tactics by having one of the workers go to the lawyer's office every two weeks. The idea was for him to collect the money from the law firm on behalf of all the workers, and purchase the necessary farm supplies.

But even this seemingly simple solution failed for various reasons: 1) sometimes the cash was not there, nor was the lawyer who handled the account, thus forcing the farmhand to waste a trip, plus at least half a day's (otherwise productive) work; and 2) certain accounting "discrepancies" kept cropping up regarding the fair market value of certain supplies vs. what the hand-written receipts were indicating.

What the owners wanted was simple: for the employees to be accountable to someone local, for them to be paid on time, and for associated details like Social Security and taxes to be handled efficiently and reliably.

Results

On the first visit to pay the employees, it was discovered that no written contract existed between the two farm families and the owners! This was an unbelievable lapse on the part of the law firm. In our experience, the failure to have an agreement in writing is one of the most common causes of squatter claims. Time and again the employee or caretaker who lives on the land with no piece of paper to prove his legal status winds up claiming squatter's rights and trying to take over the whole property-especially when the owners are absentee "gringos!"

Mr. Barrantes promptly took care of that, and, after consulting with the owners, began paying the employees once a month, rather than twice, to save money (each monthly payment covers the preceding two weeks, and the upcoming two weeks, so that funds advanced are never more than two weeks at risk). He also began to pay the Social Security, and to act as the liaison between the law firm and the owners. In addition, on his visits he began bringing the agreed-upon supplies and tools, such as salt and ear-mite medicine for the horses. He also took several soils samples, which, as stated in the Assessment, indicated that unused parts of the farm were an excellent candidate for conversion to a tree farm.

Coverage and Costs (Monthly Employee Management)

Each month Mr. Barrantes billed these clients $160.00 to cover the visit to the farm. This includes management of the employees, inspection of their work, investigation of any problems, the purchase and delivery of the requested supplies, and all communication with the owners.

Coverage and Costs (Local Liaison)

This service costs clients an additional $75.00 per month (or $26 an hour, whichever is greater). It includes acting as the owners' go-between with the lawyers, and other professionals with whom they have occasional need to communicate, such as accountants and government employees.