Renting Property in Costa Rica
Renting a property in Costa Rica is a significant step, and it can be challenging in a new country where you may not understand the language or the laws. This article aims to provide essential tips and advice for those renting in Costa Rica, so you can be well-informed before making any decisions.
Costa Rican Law and Tenancy Agreements
The good news for tenants in Costa Rica is that the law favors them over the landlords. The General Law of Urban and Suburban Renting (Ley General de Arrendamientos Urbanos y Suburbanos), also known as Law 7527, regulates all lease or rental agreements related to houses and apartments. This law provides greater protection to tenants than in many other countries, and it is crucial to understand your rights as a tenant.
Translated Rental Agreements
If you do not speak Spanish or are not confident enough to understand a lengthy and complex rental agreement, you must ask for a translated copy of the contract from the landlord. The translated version should be identical to the original document in Spanish. Suppose you have any doubts or concerns about the translated copy. In that case, asking a bilingual lawyer to assess both documents is advisable to ensure you fully understand your rights and obligations under the rental agreement.
Negotiating Rent
Although there are fixed rental rates in Costa Rica, there is often room for negotiation with private landlords. Suppose the advertised rate is c200,000 per month, with utilities separate. In that case, it is worth asking the landlord if any of the utilities, or all, can be included in the asking price. Alternatively, you may be able to negotiate a reduction in the monthly rent price by an equivalent amount if the utilities are not included. Many landlords in Costa Rica are willing to negotiate, as they are keen to occupy their property and generate income. It is worth noting that the longer your stay, the better position you will be in to negotiate, especially in the rainy season when many tenancies are vacant, and landlords may be more willing to offer significant reductions.
Rent Increases
If the rental agreement is in colones, the rent increase in any one year cannot exceed 15% by law. However, a revision instituted in 2016 lowered this percentage, creating a complicated formula to calculate the annual increase based on inflation indexes published monthly by the Ministry of Housing. It is worth noting that if the rent is paid in a foreign currency, such as US dollars, the landlord may not increase your rent.
The rent is always due within seven days of the first day of the month. If you pay late, the landlord can begin eviction proceedings. However, this is extremely unlikely, and eviction can take up to three months to complete and costs the landlord. Suppose the landlord has not notified you after the first late payment and allows the situation to continue. In that case, it is deemed by law to be an acceptable renegotiation of the contract, and the landlord may not evict.
Homeowner’s Association (HOA) Fee
Suppose you intend to rent an apartment in a condominium. In that case, it is crucial to establish who is responsible for paying the Homeowner’s Association (HOA) Fee, which is used to maintain the upkeep of the property. If it is the tenant, find out whether the rent includes the fee or whether this is an additional payment. Failing to do so can result in unexpected expenses and affect your budget.
The Deposit
As with renting in most other countries, you must pay a deposit in Costa Rica. This deposit is usually equivalent to one month’s rent and is negotiable. The deposit covers any outstanding rent payments or other debts of the tenant and can be freely agreed upon between the parties. Some landlords may require tenants to pay a security deposit, typically a sum of money paid upfront to cover any damages or unpaid rent that may occur during the lease term. Landlords may also require tenants to have renters insurance to protect their belongings and liability in case of any accidents or damages.
In addition, landlords have certain responsibilities to maintain the property and ensure it is habitable for tenants. This includes providing necessary repairs, maintaining common areas, ensuring the property meets health and safety codes, and respecting tenants’ privacy rights. Tenants also have certain rights, such as the right to quiet enjoyment of their rental unit and to live in a safe and habitable environment.
Conclusion
Renting a place in Costa Rica can be a great way to enjoy the country without paying for a home. You can have a smooth and enjoyable tenancy if you know the rules and laws, negotiate with your landlord, and talk to them clearly. Remember to read your lease agreement thoroughly, including any translations, before signing, and if in doubt, seek legal advice.
-Written by Glenn Tellier (Founder of CRIE and Grupo Gap).
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Frequently Asked Questions
Does the law regulate rental agreements in Costa Rica?
Yes, rental agreements in Costa Rica are regulated by Law 7527, also known as the Ley General de Arrendamientos Urbanos y Suburbanos. This law covers all lease or renting agreements related to houses and apartments.
Should I get a translated rental agreement if I don’t speak Spanish?
Yes, asking for a translated copy of the rental agreement is highly recommended if you don’t speak Spanish or are not proficient enough to understand a lengthy and complex document. The translated document should be identical to the original Spanish version.
Can I negotiate rent with private landlords in Costa Rica?
Yes, there is often room for negotiation with private landlords in Costa Rica. You can ask if utilities can be included in the asking price or if the rent can be reduced without utilities. Some landlords may be willing to negotiate to keep their property occupied and earn money.
Is there a limit to rent increases in Costa Rica?
Yes, by law, the rent increase in any one year cannot exceed 15% if the rent is in colones. However, a revision instituted in 2016 lowered this percentage, creating a complicated formula to calculate the annual increase based on inflation indexes published monthly by the Ministry of Housing.
Can landlords increase rent if paid in a foreign currency like US dollars?
No, the landlord may not increase the rent if the rent is paid in a foreign currency like US dollars.
What is the due date for rent payment in Costa Rica?
The rent is always due within seven days of the first day of the month.
What happens if I miss a rent payment?
After one day of late rent payment in Costa Rica, the landlord may start eviction procedures. Landlords are unlikely to do this unless there are more substantial reasons to evict a tenant.
Who is responsible for paying the Homeowner’s (HOA) Fee in a condominium rental?
Let’s say you are a renter in a condo. In that case, it’s essential to determine who pays the Homeowner’s Association (HOA) Fee, which keeps the property in good shape. Find out if they are part of the rent or if there is an extra charge.
What is the average rent in Costa Rica?
The average rent in Costa Rica varies depending on location and property type. In San Jose, the capital city, the average monthly rent for a one-bedroom apartment is around $500. However, rent can be significantly cheaper in other areas of the country, such as the coast or smaller towns.
Is rent cheap in Costa Rica?
Rent in Costa Rica can be affordable compared to other countries, but it also depends on location and property type. Generally, rent is cheaper in smaller towns and less touristy areas, while coastal areas and popular tourist destinations are more expensive.
Can foreigners rent property in Costa Rica?
Yes, foreigners can rent property in Costa Rica. There are no restrictions on renting property as a foreigner, and many expats choose to rent long-term rather than buy property.
How much money do you need to live comfortably in Costa Rica?
The amount of money needed to live comfortably in Costa Rica varies depending on lifestyle and location. However, a general estimate is that a single person can live comfortably on a budget of $1,500 to $2,000 per month, while a couple can live on around $2,000 to $2,500 per month.
What is the average salary in Costa Rica in dollars?
The average salary in Costa Rica is around $500 to $600 monthly, but this varies by profession and industry. Many professionals, such as doctors and lawyers, earn much higher salaries, while service industry workers may earn less.
Where do most expats live in Costa Rica?
Many expats choose to live in popular tourist destinations such as Tamarindo, Jaco, and Quepos. Others prefer smaller towns like Atenas, Grecia, or San Ramon. The Central Valley region, which includes San Jose and surrounding towns, is also popular among expats.
Where is the safest place to live in Costa Rica?
Costa Rica is generally considered a safe country, but as with any location, some areas may be safer than others. Some of the safest places to live in Costa Rica include Escazu, Santa Ana, and Ciudad Colon in the Central Valley region.
Where is the best place to rent a house in Costa Rica?
The best place to rent a house in Costa Rica depends on personal preferences and lifestyle. Coastal areas such as Tamarindo, Jaco, and Manuel Antonio offer beautiful beaches and a vibrant expat community. At the same time, smaller towns in the Central Valley region provide a more peaceful and traditional lifestyle. It is recommended to visit different areas before deciding on a place to rent.
What should I do if I have a problem with my landlord?
If you have a problem with your landlord, such as a maintenance issue or a dispute over the lease agreement, you should first try to resolve the issue directly with the landlord. If that does not work, you may need legal assistance or file a complaint with a local housing authority.
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