Subscribe via E-Mail

Get all of our news delivered fresh to your inbox every morning! Just tell us your name and where to send it using the form below.

PS – We hate spam too. We don’t sell or share our list with anyone, and we never send commercial email.




luxe
Friday, January 29th, 2016  |  USD: Buy 531.29 / Sell 543.92
20 years

Bill would reduce legal rent increases to the rate of inflation

Email this page

(Archive)

(Archive)

December 18th, 2014 (InsideCostaRica.com) A bill that is receiving “strong support” in the Legislative Assembly and could become law in as little as six months, according to Rep. Oscar Lopez (Pase), would limit the legal amount that a landlord can increase tenants’ rent per year to the rate of inflation, up to a maximum 10%.

 

Currently, property owners are allowed to increase rents by a maximum of 15% per year.

 

Lopez told CRHoy.com that the bill has the support of the majority of lawmakers, and is aimed at reducing the “abuse” of renters.

 

Should the bill become law, property owners would only be allowed to increase rents by the rate of inflation, or a maximum of 10%, whichever is lower.  Costa Rica recorded annual inflation of 5.2% in 2013.

 

Editor’s note: By existing law, all residential rental contracts are valid for a period of three years, and if the rent is priced in dollars, the rent cannot be raised for the term of the contract.  

costa rica news

ATTENTION: If you are seeing this message,


Advertisement


Get our news delivered fresh to your inbox every morning.

Click here to subscribe to our email list. We hate spam too and never send commercial email.

Like us on Facebook and receive our news in your timeline

  • roberto

    The article should have also mentioned that residential rental contracts are valid for 3 years and if the rent is paid in dollars, it cannot be raised during the term of the contract.

    • http://insidecostarica.com/ Timothy Williams

      Correct. We will add an editor’s note.

  • Ken Morris

    Although I hate to see the state having to legislate common sense business practices, this is an area where I’m afraid it is necessary.

    Landlords in CR do routinely slap tenants with annual rent increases in the 10-15 percent range, a practice that makes no sense to me. It just results in tenants having to move every year or two. Although tenants expect the rent increases and therefore don’t plan to stay more than a year or two, it seems to me that residential stability is a social good. Sure, lots of tenants will move anyway, and landlords understandably want some bad tenants to move, but good tenants who are happy where they are shouldn’t I think be driven off by inflated rent increases.

    As a landlord myself, I also don’t understand why landlords in CR do this. Once you get good tenants, heck, you want them to stay, and tenant transitions usually cost you more than you’d get via an inflated rent increase anyway (as well as risk replacing a good tenant with a bad one). Yet for some strange reason many landlords in CR drive off their good tenants with inflated rent increases.

    Is a law really required to force CR landlords to do what is in their best interest anyway? In this case, I’m afraid so.

  • mhogan

    There is so much wrong with this concept of increasing rents to “recorded annual inflation” or capping any increase, I don’t know where to begin. Why should we believe any figures put out by this government–they are experts at manipulation; Even if 5.2% were true, it is a generality, like saying a man ate 6 meals on the first day and none the next–it does not mean he eats 3 meals a day. Similarly, Landlording can not use the generalities of inflation (rice and beans may have gone up a mere 0.1% but has little to do with the exponentially increased property taxes or electricity charges or labor cost increases to repair a roof — all for which the landlord may be responsible.) Whilst most security deposits adequately cover for repairs, what of the loses when a destructive tenant trashes the place? What of the laws that favor the tenant when trying to get delinquent tenants out of your property (happening more and more as the economy slumps) — even if it’s 3 months, that’s 3 months of loss … does the government compensate for that? And should the inflation rate exceed 10% (in reality, not manipulation by government), who eats that loss? IMO, if “some” landlords (and not as a generality like figures on inflation) substantially increase rents, pass the word around about that landlord and he’ll feel the brunt of his greed; but government should stay out of private business. It’s not a matter of “let the market dictate” but let the landlord have a reasonable return on his investment, like any other business. This is price fixing, by any other name.

    • expatin paradise

      In most places, if one has a rental agreement, the agreement states the amount of rent, and that remains the amount for the term of the lease. Here, your lease states amount, but the law allows the landlord to increase the rent at his caprice up to 15% per year. This makes no sense to anyone familiar with landlord-tenant rights, as it creates a unilateral contract in favor of the landlord.

      Capping increases at the rate of inflation still gives the landlord the right to change the contract terms unilaterally, but caps the amount of the rent increase by the official inflation rate. This still gives the landlord an advantage not enjoyed by most landlords in the developed world. In most places, if the contract states one amount and the economy tanks or the inflation rate skyrockets, both parties are still obligated to the rent amount and other terms of the contract. Here, many landlords are predatory and increase rent unreasonably, especially in poorer areas, because they know that their tenants are trapped because they don’t have the funds needed to move their possessions and start elsewhere. This law will limit the landlord’s predatory practices, but landlords still maintain an upper hand.

      My preference is that a rent amount is good for the term of a contract, but I have suggested that increases should never exceed the rate of inflation. This change is one I have advocated here before, so I am very glad to see it.

  • Karen Mata

    True inflation is probably 12%. COL doubling each 6 years.

    • expatin paradise

      What is “true inflation?” Is this based on some international scale or a cosmic definition?

      • Karen Mata

        Moving to CR in the mid 90s the exchange rate was in the 125 range. 12 years later it is 500. Doubling each 6 years.

        I know you’re probably not an MIT grad pally

        • expatin paradise

          You’re no statistician, yourself. Mid 90s to now is not 12 years. If you’re cherry picking years, you can make about any point. Likewise if you cherry pick your currency for comparison. If we stick to the USD and the past ten years, inflation has been about 25%.

          My real question was re your standard of measurement, Your response reflects that it is the USD over a twelve-year period from the mid 90s until about 7-11 years ago. Hardly scientific.

          • Karen Mata

            You can’t read.
            Try rereading my statement. And over those 12 years when the dollar doubled twice in exchange value it averaged 12% compounded growth, of course inflation must of been much more than that.

          • expatin paradise

            I read just fine. You are logically challenged. Your statements don’t add up. Also, why is inflation measured against the USD?

            As for flippancy, you take the cake. Actually, you have transcended into outright hostility. There was nothing flippant about my question. You can’t make such wild statements about inflation rates (which turn out not to be accurate) without stating your basis for measurement.

          • Karen Mata

            You posed a flippant question sir, reread it.

            I answered in a manner that even you could understand, which seemed to provoke you.

            Now I suggest that you return to reading the ICR comments from 2 months past. As my son would add, haha. Get a life, you pathetic thing. I love it.

            Sir you’d be better off keeping your mouth shut, as to not confirm what we already know.

            And I’m certain that your mother was wrong. You WILL someday amount to something (Maybe even this year)

            Carry on sir, and with your impressive deeds, an expat to behold.

            Happy New Year…and you know the little guitar player in downtown San Jose has passed on….I believe you’d fit that bill.

          • Karen Mata

            Not at all pally. Your flippant response was if my figures were based on some international scale, or cosmic definition..haha
            My response was on point… reread it.

Popular Content