Renters Have Rights Too!

by Andy Browne, HMFIC - Legal Review by Roger Peterson, San Jose Attorney

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We have been preaching for over five years that new expats coming to Costa Rica should RENT before BUYING.  In a few rare situations we have even suggested to folks that they should NEVER BUY.  But those cases are very few and far between.

In Costa Rica, renters wield all the power over the landlord.  This article endeavors to scratch the surface as to what rights renters in Costa Rica really have.  By the looks of it... quite a bit.

ATTITUDE & OPINION...

We have known many expats who have moved here and rented in lieu of buying.  For the most part they were very happy with their decision.  One couple we know was extremely happy that they rented because not long after they moved into their rental property, the "neighbors from hell" moved in downstairs.  Due to the Costa Rican justice system's inability to evict the trouble makers, our friends were able to simply pick up and move elsewhere.  No fuss, no muss.  Not a problem under Costa Rican Law.


The biggest problem occurs when landlords want to increase the amount of rent the tenant is paying.  Because (in the U.S.), when a lease has run it's course, the landlord has the power to do pretty much whatever they want.  It is very different here.

First and foremost... for any lease to be binding in a Costa Rican court, it should be written and executed in Spanish.  However, Costa Rican courts have taken lease agreements, authored in English, and then had them translated (by an official translator) into Spanish.  But it is important to understand, English does not translate word for word into Spanish.  Important legal content may not translate properly and therefore leave one or more of the parties in a state of legal uncertainty.

Whether or not, as a renter, you want to legally exercise any of these rights, you will need a lawyer and you will have to go to court to present your case.  The court will be conducted in Spanish, therefore you will need an attorney and or a translator unless you are fluent in Spanish.

What it boils down to is the ball is in your court.  If you love where you are staying, and you feel you are getting screwed... FIGHT IT.  Otherwise, start looking for a new place but don't let the landlord bully you into something that circumvents Costa Rican Law.

UPDATE ON RENTERS RIGHTS!


Here is a scenario many long term renters may one day face...

  • The house you have been renting for the last 4 years has finally sold

  • The owner has decided to lick his wounds and take the fifty cents on the dollar (that was offered) and bid adios to his dream of living the pura vida life in Costa Rica. 

  • The owner now informs you (the tenant) that you have THIRTY DAYS in which to vacate the premises for that's when the new owners are to take possession.  You probably feel screwed over... right?  WRONG! - Costa Rican law is on your side. 

  • The owner of that house CAN NOT kick you out until your lease is up; in other words at the end of your current THREE YEAR lease period.


The botton line is... you are protected.


Below is information that has been compiled from many different sources.  I DID NOT author the document, so please take it for what it is worth. 

I would suggest reviewing the document with a lawyer before committing to any legal course of action.  The compilation also provides a link to the Actual Costa Rican tenant law 7527.  It is in Spanish, but Google Translate does a pretty good job of turning it into English.

 

In Costa Rica the Landlord-Tenant Law (Law 7527, called “Ley General de Arrendamientos Urbanos y Suburbanos”) regulates all aspects of the relationship between a property owner and their rental tenant.

The process of evicting a tenant for not paying his rent seems simple enough: the landlord files an action under the Summary Process provided for by the Code of Civil Procedure (Codigo Procesal Civil), the tenant is served and has five days to respond. After the evidential period, the court will issue a final judgment and writ of possession and the police is called in to evict the tenant.

New eviction procedures for the non-payment of rent are now in effect.  For more information, please read an article published my San Jose Attorney Roger Peterson.  ARTICLE.

 

As with all litigation processes in Costa Rica, the time frame can vary significantly depending on the court and the location, a process than can take as little as several months to a year or more, depending on the circumstances.

Let’s say that the minimum term of a rental agreement in Costa Rica is three years (this applies to both oral and written agreements). If the tenant wants to terminate the lease before this time expires, he/she must send the landlord a three month prior notice, unless the parties agree otherwise. The parties may agree on a penalty for early termination by the tenant.

If the term of the agreement expires, it is automatically renewed for three years more, unless the landlord gives the tenant a three month period prior notice, stating he/she will not renew the agreement. The landlord may give notice if the landlord or their family need the premises for themselves or intends to undertake major construction work.
 

For housing, if the rental is in colones (Costa Rica’s currency), there is an automatic yearly increase but cannot be higher than 15% of the fixed rent. In most cases the landlord will increase the rent by 15% without providing an explanation. For the increase to be more than 15%, the country’s inflation must be higher than 15%, and the rent increase must be based on a certification of the inflation issued by the State.

If the rent for housing is agreed in US dollars or other foreign currency, no yearly increase is allowed unless it is called for in the rental agreement and it will not exceed the agreed to amount.

Law 7527 has been effective and enforceable since August 17, 1995. 

 

Security deposits to cover pending rent payments or any other obligations of the tenant can be freely agreed between the parties with no legal maximum, but in practice, landlords request one month as security deposit. Advance payments of rentals are in contrast limited to just one month’s rent (an exception applies to social housing).

In Costa Rica, the security deposit, typically the amount of the last month’s rent, is not the last month’s rent. The landlord can and will insist on payment for the last month and then uses the security deposit to make repairs to the property after the tenant leaves. In a perfect world, the landlord will refund the deposit after inspecting the property, in full if there are no damages or in part, deducting expenses for the repairs. In the real word, however, the tenant can kiss the security deposit goodbye.

In conclusion, Costa Rica’s tenant law was designed to protect the tenant, which makes it almost impossible for a landlord to evict even the worst tenant.

Here's another description. The lease is always good for 3 years minimum no matter what the contracts says as long as paid in dollars:

The minimum term of a lease agreement in Costa Rica is three years. If the tenant wants to terminate the lease before this time expires, he must send the landlord a three month prior notice, unless the parties agree otherwise. The Parties may agree on a penalty for early termination by the tenant.

If the term of the agreement expires, it is automatically renewed for three years more, unless the landlord gives the tenant a three month period prior notice, stating he will not renew the agreement.


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