Landlord-Tenant Laws

Navigating Costa Rica’s rental market requires more than just good communication and organization — it also demands a clear understanding of the country’s landlord-tenant laws. Whether you manage a single property or oversee an entire portfolio, knowing the legal framework helps protect your clients, tenants, and your own professional reputation.

1. The Legal Foundation of Rental Agreements

In Costa Rica, residential leases are primarily governed by the Urban and Suburban Lease Law (Ley General de Arrendamientos Urbanos y Suburbanos).
This law provides a structured framework that defines the rights and obligations of both parties, ensuring fairness and balance in rental relationships.

Key points include:

• Written Contracts Are Essential: Although verbal agreements are legally valid, a written lease is highly recommended to avoid disputes.
• Lease Duration: Typical residential contracts last three years, automatically renewing unless either party gives notice to terminate.
• Currency and Payment: Rent can be set in U.S. dollars or Costa Rican colones, but once defined, it must remain consistent throughout the term unless both parties agree otherwise.

2. Rent Increases and Adjustments

Landlords cannot increase rent arbitrarily.

• For leases in colones, adjustments are based on the Consumer Price Index (CPI) published by the government.
• For contracts in U.S. dollars, rent is generally not subject to increases during the initial three-year term unless expressly stated in the agreement.

Understanding this distinction helps property managers ensure compliance while maintaining transparency with tenants.

3. Security Deposits and Maintenance Responsibilities

The law allows landlords to request one month’s rent as a security deposit. This must be refunded at the end of the lease, provided the tenant leaves the property in good condition.

Maintenance obligations are divided as follows:

• Tenants are responsible for day-to-day upkeep and minor repairs.
• Landlords must address structural issues, plumbing, and electrical systems.

Property managers play a vital role in inspecting properties before and after tenancy to document any damages and ensure fair resolutions.

4. Termination and Eviction Procedures

Ending a lease early requires valid justification. Common grounds include:

• Failure to pay rent
• Significant property damage
• Illegal activities conducted on the premises

Eviction processes must go through judicial procedures, which can take several months. Clear documentation and legal guidance are crucial to avoid complications or delays.

5. Why Legal Knowledge Matters for Property Managers

A strong grasp of Costa Rican rental laws empowers property managers to:

• Draft fair and compliant contracts
• Prevent conflicts through proactive communication
• Protect both landlord and tenant interests
• Build trust and credibility within the market

Ultimately, legal awareness is not just about compliance — it’s about professionalism, transparency, and long-term success in property management.

Final Thoughts

Property management in Costa Rica is most effective when supported by legal understanding, empathy, and consistency. Knowing how to interpret and apply the country’s rental laws helps you maintain positive relationships, prevent disputes, and deliver a higher standard of service to clients and tenants alike.

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