What Happens to Your Security Deposit if you Vacate Early?

Many, if not most, rental agreements or leases include a clause relating to the security deposit, which is usually equivalent to one month’s rent.  This applies to residential, commercial, or office buildings.  This clause usually states that the tenant will forfeit their security deposit if they vacate the premises before the end of the lease period, and the landlord may retain the deposit as compensation for the early departure.

But in Costa Rica, the law does stipulate that you can withdraw from the lease before the expiry date if you give the landlord 3 months prior notice.  If agreed upon between the landlord and the tenant, that notice period can be shortened.  But it must be agreed upon beforehand.

But there is a distinct difference regarding the return of the security deposit if the tenant unexpectedly vacates, or simply stops paying the monthly rent.  This is considered a failure to meet the lease agreement as the landlord expects to receive this monthly income, and its loss is considered a hardship.  That is why the law and jurisprudence have linked the right to early termination to the condition whereby the tenant must give a suitable period of notice.

So the tenant may terminate their lease prior to the expiry date only when they have given accurate and unambiguous notice at least 3 months prior to vacating the premises.  The Court has determined that this deadline is reasonable, and allows for sufficient time so the landlord may find a new tenant.  If this is done in accordance with the 3 month time frame, then the tenant is released from their contractual obligations and should not pay any additional compensation.

But if the tenant fails to provide the required notice 3 months prior to vacating the premises, in that case, the tenant would lose their security deposit as compensation to the landlord for income lost.

So if you do decide to change your plans, you will need to give your landlord a minimum of 3 months notice to be legally entitled to the return of your security deposit.

Contact us if you need more advice on your situation.