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Costa Rica Leases and Rental of Property

Great care must be taken when leasing to others in Costa Rica, as it may not be legal to increase rents or to remove tenants from the property. A rental agreement can be either verbal or written. The property management division of Casa Canada Group can help you here.

Regardless of the term specified in residential or commercial lease agreements, the terms and conditions apply for a minimum of three years provided the tenant keeps to the terms of the agreement. If a rental agreement is for more than three years, the longer term applies. If you wish to legally lease for less than three years, contact Casa Canada management for options that can make this possible.

If rent is in a currency other than colones, it will not be possible to raise rents without the prior agreement of the tenant. No rent increases are permitted over the first three years. If rent is in colones it is possible to contract for an increase of 15% per year for residential property only.

Where there is no rental agreement, the landlord cannot evict the tenant from the property for three years and the rent cannot be increased for this period. The tenant is required to give three months notice to terminate the rental. A clause can be included in the contract that the deposit is forfeit if notice is not give. The tenant is obliged to leave the property in the same condition as when it was rented, normal wear and tear excepted.

If the landlord wants the rental property back it is necessary to notify the tenant in writing three months or more before the end of the term, otherwise the term is automatically renewed for another three years, or for the length of the original agreement if longer than three years. This law does not apply where the landlord resides in the same building with up to two rental units. In this case the tenant can be given thirty days notice to leave the premises.

The law allows the tenant to be late up to seven days with rent payments. After that the landlord has the right to apply to the court for an eviction order. If rent payments are continually accepted late, the tenant may have the right to continue to pay late. Once it is decided to seek the eviction of a tenant, rent payments should not be accepted as it could make them current and cancel the right to evict them.

If a tenant does not pay bills that are the tenant’s responsibility it is possible to evict them. If the landlord pays such bills the cost of them can be deducted from a damage deposit at the end of the rental period. The tenant can be sued for any additional amounts outstanding. The tenant is responsible for all public services and utilities except for property taxes, which are the responsibility of the landlord.

Where a property is sold or transferred it does not change the tenant’s rights. The new landlord must respect the existing contract.

Any improvements made to the property by a tenant automatically become the property of the landlord.

A tenant cannot change the original agreed upon use of a property, other than to put a small business into a residence. The primary purpose of the property must remain residential. A shop cannot become a bar for example. Tenants cannot sub-rent or lease a property unless the right to do so is specified in the lease.

The landlord has the right to inspect the property once a month.

When negotiating a rental contract, a landlord can request any guarantee deposit felt necessary. 

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