Increase rent of housing units in Costa Rica must not exceed the Consumer Price Index

    It should be taken into account that by law the lease contracts for housing units are for a minimum of three years

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    With the arrival of the new year, it is common for those who rent a house or an apartment to see the monthly payment go up a little, because every year the landlords adjust the price of the rents. However, Tico lawyer Benjamín Gutiérrez, explained that according to Law 7527, General Law of Urban and Suburban Leases, this increase cannot be whimsical.

    “To calculate this annual adjustment, it must be taken into account that by Law the lease contracts for housing units are for a minimum of three years, therefore the increase in the monthly payment after the first year of the contract must be equal to or less than the rate of inflation of the 12 months prior to the expiration of the contract,” Gutiérrez explained.

    In other words, the annual increase in the monthly payment corresponding to the rent of a room house cannot be greater than the Consumer Price Index (CPI), published by the National Institute of Statistics and Censuses (INEC) in mid-December 2020 or early January 2021.

    After the term of the contract, the monthly payment can be negotiated between the owner of the house and the person who rents. “For example, let’s use the adjustment that is in force for this 2020. According to the IPC, anyone who is renting a house in those first three years of the contract will have a maximum increase of 1.52%, since the IPC – as of December 2019 – corresponds to this percentage”, mentioned the specialist.

    Gutiérrez added that those who charge their rent in US dollars or any other foreign currency, cannot increase the monthly payment in any case, since “the Law recognizes that the appreciation of the currency is sufficient.”

    When the rent goes up more than what the Law stipulates

    The expert advised taking into account that any increase in the monthly payment greater than what is allowed by law is illegal; In case the landlord does so, users have two options to prevent abuse:

    1. Notify the landlord in writing. “Continuing with the example of the 2020 adjustment, through a written means, be it a letter or an email, you can inform your landlord that you have deposited the monthly payment agreed in the contract plus the IPC adjustment authorized by the INEC (1.52% at this time) ”, recommended Gutiérrez.

    2. Go to the civil court. Depending on the place of residence, people can go to the nearest civil court and manage a rental consignment. This option is recommended when the landlord does not accept the monthly payment according to what is stipulated by law, because “the landlord may tell you that he does not accept the payment unless it includes a major adjustment and if the tenant does not pay because the landlord did not accept the money, the tenant would be incurring in a breach of contract that could eventually mean an eviction, “the lawyer explained.

    Verbal contracts have the same validity

    The specialist indicated that verbal contracts have the same validity as a written agreement, therefore, for the purposes of increasing the monthly payment, they must respect all the conditions that the Law regulates, such as the minimum rental period of three years.

    “It is recommended that there is a written contract, but if there is not, what must be proven is the start date of the rental agreement and the easiest way to prove this is by saving the receipts for the monthly payment”, Gutiérrez said.

    Finally, he stressed that the increase in the monthly rent is optional, that is, if the parties agreed not to raise the annual monthly payment then there will be no increase. But if they agreed to raise the monthly payment, the increase cannot be greater than the CPI regardless of what the landlord and the tenant have signed.

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