In Costa Rica there is a law governing the relationships between the Landlord and Tenant for two specific situations:
1) When renting houses, apartments or condos
2) When renting a property for commercial, industrial or professional purposes. This Rental Law has been in effect since 1995, with only a few amendments since then. It has a number of different rules for similar situations, so knowing the details can be a big help for those expats being on either side of the relationship Landlord or Tenant.
In general terms we can mention that the following rules are applied to the above-mentioned property leasing contracts:
Regarding places to be rented as homes, the law also creates a difference between what is considered Normal Homes or Social Interest Homes. These later are those with a value up to 58.6 million colons -around US $98,000-. Basically for those Tenants renting a social interest home, if Landlord needs to start an Eviction Process for lack of payment, Tenant can stop the eviction by paying all delayed rents and legal expenses to the Landlord.
When renting Condos, it is necessary to take in consideration that Tenant needs to acknowledge they have read and will respect the internal bylaws as well as other dispositions contained on the Condominium Property Act. When the Home Owners Association meetings take place, Tenant has the right to participate and make suggestions but is not allowed to vote. Only homeowners can legally vote.
Some special situations are also ruled by this law. If a landlord decides to build a maximum of two homes or commercial places on the same land where his or her home is located, and such places have a common entrance along with the Landlord’s home, Landlord is entitled to terminate the contract anytime providing 1 month notice to vacate the property. After that term, if the Tenant is reluctant to leave the premises, then Landlord is entitled to request and Administrative Eviction from the Ministry of Security in order to have the Tenant taken out with help of local police.
It is necessary to consider that any eviction process in Court can take time. In fact, some renters like to rent places paying first month rent and security deposit, then stop paying rental until the Tenants know that the eviction order is signed. At the time renter just moves out. One tool that can be used by Landlord is to request the Judge to perform a visit in order to make an inventory of all Tenant’s belongings, to be held as a guaranty for payment. This might motivate the delinquent Tenant to leave earlier.
As mentioned above, the law grants a minimum term of three years. However, there are two other exceptions:
• Trust contract. If the property to be rented is an asset included inside a Trust Contract, the person with legal faculties to rent the property will be the Trustee. In this case it the Trustee is only authorized to rent for a maximum term of 1 year, then that term rules.
• Usufruct right. One property owner can legally transfer the usufruct right of a property into a different person’s name. This is a type of lien against the property, meaning the usufruct beneficiary is the one entitled to rent the property. If such beneficiary right only gets this benefit for less than three years that means the property can’t be rented for any longer time than what remains.
All situations other than renting homes or commercial/industrial places have different regulations. Some situations excluded from the Tenancy Act are as follows:
• Hotels, Bed & Breakfast and Motels.
• Homes and premised rented with the purpose of Tourism.
• Spaces rented for vehicle parking.
• Homes granted to a person to live without paying any rent, or homes granted to employees by the employer.
• Farms and properties rented for agricultural purposes.
For Landlords, it is important to be cautious at the moment of rental. Getting references or performing credit reports on Tenants is highly recommended, considering that a bad Tenant can create very big problems, and any eviction process might be expensive and time-consuming. Tenants also need to understand their rights in order not to suffer any abuse from Landlords. Remember, get it in writing!
About the Author: Allan Garro was incorporated as a lawyer and public notary in 1996. He specializes in Litigation, Corporate, and Real Estate Law. He has also acted as an external legal consultant to Congress. He has been the author of more than 100 published English Language articles and can be reached at firstname.lastname@example.org