Costa Rica – Lease Agreements

What is the typical lease term for renting property in Costa Rica?

Costa Rican law establishes a minimum residential lease duration of three years. Regardless of what a contract specifies, this provision is a matter of public policy and overrides any shorter term that may appear on the page. This stands in marked contrast to systems found in countries like Germany or the Netherlands, where one-year fixed terms and rolling monthly arrangements are commonplace under residential tenancy law.

The three-year minimum means that a tenant who meets all their obligations has the legal right to remain in the property for the full period, irrespective of what the written agreement may state. Where a contract stipulates a term exceeding three years, the longer duration prevails.

Once a lease expires, it renews automatically for a further three years unless the landlord notifies the tenant in writing at least three months before the end of the current term of their intention not to continue. If neither party takes action, the tenancy carries on — a consequence that can catch landlords off guard more readily than tenants.

In practice, it is common for lease agreements to state a one-year term, with provision for renewal over the following two years and automatic extension absent a cancellation notice. This format is widely used in the market even though the statutory three-year minimum applies regardless of the term written into the contract.

Short-term arrangements — those running anywhere from 24 hours to one year — are governed by a separate legal regime. Costa Rica’s “Framework Law for Non-Traditional Lodging” covers these rentals and requires property owners listing through platforms such as Airbnb or VRBO to register with the Costa Rican Institute of Tourism (ICT) and meet requirements spanning sanitary standards, electronic invoicing, and tax compliance. Many expats use short-term rentals to get settled before committing to a long-term arrangement.

What is the difference between furnished and unfurnished rental properties in Costa Rica?

Furnished rentals are readily available in areas popular with the expat community. Within the furnished market, offerings generally fall into three broad categories: fully furnished short-term vacation rentals with all utilities and amenities included; medium-term rentals spanning three to twelve months, typically fully furnished with some utilities covered; and longer-term furnished properties that include basic furnishings but fewer bundled services.

Furnished properties generally command a premium of 20–40% over unfurnished equivalents, though the savings on shipping costs or local purchases can offset this. Quality varies considerably from property to property, making it essential to inventory every included item carefully during the inspection. Unlike some European markets where “furnished” reliably implies a fully equipped kitchen, white goods, and soft furnishings, the term is applied loosely in Costa Rica and can describe anything from minimal sticks of furniture to a complete setup with linens and crockery — always confirm exactly what is included before you sign anything.

Unfurnished properties dominate the long-term end of the rental market and tend to be the preferred choice for those making a permanent move, as they give tenants the freedom to create a home on their own terms. A common approach is to begin in a furnished rental while awaiting the arrival of shipped household goods or purchasing items locally, before transitioning to an unfurnished property for longer-term affordability.

Utility costs are ordinarily the tenant’s responsibility. The landlord bears the obligation for local property taxes and, where applicable, the Luxury Home Tax. In condominium settings, it is important to establish upfront who is responsible for homeowners’ association (HOA) fees and whether these are folded into the rent. Always confirm this arrangement in writing, as HOA charges in gated communities and coastal developments can be substantial.

What are the standard clauses typically found in a lease agreement in Costa Rica?

A legally binding rental contract in Costa Rica must contain certain key elements. Thorough, clearly worded agreements reduce the likelihood of disputes between landlords and tenants. The following clauses appear in virtually every residential lease.

• Identification of parties and property: The contract must clearly name both the landlord and the tenant. It is important to verify that the landlord has the legal authority to lease the property. The agreement should include the Public Registry’s registration number, a general description and survey of the property, and its precise location.
• Lease term: The contract must specify the lease duration, which for residential properties generally cannot fall below three years except where short-term rental legislation applies.
• Rent payment terms: Law 7527 allows both parties to negotiate freely on rental amount, currency, and payment frequency. Monthly payments are the norm. Tenants benefit from a statutory grace period of seven days beyond the due date to make payment without being in default.
• Rent increases: The applicable rules depend on the currency specified in the lease. For foreign-currency leases — most commonly US dollars — the rent must remain constant for the full contract duration, with no increases of any kind permitted. For colón-denominated leases, landlords may apply an annual increase tied to the accumulated inflation figure for the preceding 12 months, using data published by the National Institute of Statistics and Census (INEC).
• Security deposit: The deposit is ordinarily equivalent to one month’s rent and serves as security against damages, unpaid bills, or in certain circumstances outstanding rent.
• Maintenance responsibilities: Day-to-day upkeep and minor repairs fall to the tenant, while structural matters, plumbing, and electrical systems are the landlord’s domain. If the tenant promptly reports an urgent repair and the landlord fails to act within ten business days, the tenant is legally entitled to carry out the work and deduct the cost from the rent.
• Subletting restrictions: Tenants are not permitted to sublet the property or transfer their contractual rights to a third party, with the sole exception being the transfer of an operating business.
• Early termination and notice periods: A tenant wishing to exit before the three-year term has elapsed must provide the landlord with three months’ written notice unless the parties have agreed otherwise. The contract may also specify a financial penalty for early departure by the tenant.
• Permitted use: The contract must state whether the property is to be used for residential, commercial, or agricultural purposes and set out any relevant restrictions. Where the property serves as the tenant’s primary home, this should be stated explicitly.
• Notices and communications: The agreement should include contact details for both parties to ensure that official notifications reach the correct recipients.

What additional or optional clauses might appear in a lease agreement in Costa Rica?

Beyond what Law 7527 mandates, landlords in Costa Rica routinely include supplementary clauses that shape the practical experience of tenancy. None of these is legally required, but all can significantly affect a tenant’s obligations and day-to-day costs. Expats should review them carefully before signing.

• Pet policy and pet deposit: Tenants with animals are frequently asked to pay an additional pet security deposit, intended to cover any damage attributable to the pet and to incentivise completion of the full lease term. Pet clauses differ widely — some landlords prohibit animals outright, while others restrict them by size or breed. If you have or plan to acquire a pet, examine this clause with particular care.
• Property alterations: Many leases prohibit tenants from making structural changes, repainting walls, or installing fixtures without prior written approval from the landlord. Enhancements considered aesthetic rather than maintenance-related require landlord consent and, unless separately agreed, remain with the property at no cost to the landlord when the tenancy ends. Clarify what becomes of any approved alterations before you commit.
• HOA and condominium rules: In condominium developments, the contract should clearly state who bears responsibility for HOA fees and whether these are included in the rent. Tenants in such developments may attend and contribute to homeowners’ association meetings but do not hold voting rights — only property owners may vote.
• Landlord inspection rights: The contract should define the conditions under which the landlord may inspect the property, including any required notice period. Be cautious of clauses permitting unannounced access and negotiate for a reasonable notice window — 24 to 48 hours is a standard worth requesting in writing.
• Utility arrangements: Some leases bundle specific services such as internet, water, or a shared electricity meter into the rent, while others require tenants to manage all utilities independently. Clarify this before signing to avoid unexpected bills and end-of-tenancy disputes over outstanding arrears.
• Dispute resolution: Well-drafted leases include a clear procedure for resolving disagreements. Many landlords favour mediation clauses before either party pursues legal action, as this approach tends to save both time and money. A carefully worded mediation clause can spare considerable stress if a conflict arises during the tenancy.

What should expats be especially aware of when signing a lease in Costa Rica?

Language of the contract: Lease agreements in Costa Rica are legally conducted in Spanish, the country’s official language. To ensure you understand what you are committing to, ask your real estate agent for a copy in a language you can read, or engage a lawyer to review the contract on your behalf. Never sign a document you have not fully understood. While Costa Rican law does not require residential leases to be notarised as a condition of validity — verbal agreements are technically enforceable — a written Spanish-language contract is the established standard and is strongly recommended.

Currency choice carries lasting consequences: Many landlords prefer to quote rent in US dollars, but tenants have the legal right to pay in colones at the prevailing exchange rate. The currency you select, however, has a direct bearing on how rent may change in the future. Colón-denominated leases allow for annual increases tied to the inflation rate, whereas leases in foreign currencies prohibit any mid-contract rent rise. Opting for a dollar-denominated lease therefore provides greater price certainty across the three-year term.

The three-year minimum protects you — but also binds you: A tenant may exit a lease at any time, provided they give three months’ notice in advance. A widespread misconception is that only one month’s notice is required — the law is explicit that three months is the standard. Failing to give adequate notice leaves the landlord entitled to collect rent for the shortfall period.

A property sale does not end your lease: Tenants who honour their obligations are protected against eviction for the full lease duration. Should the property change hands during the tenancy, the incoming owner takes on the existing lease and tenants retain their right to occupy the property until the agreed term concludes. This is a robust protection that differs from certain other legal systems where a sale can trigger early termination.

Foreigners and deposit requests: Some landlords — particularly those renting to foreign nationals or letting high-value properties — may request a deposit exceeding one month’s rent. In such cases, insist that the deposit amount and the conditions for its return are set out precisely in the written agreement, and always obtain a written receipt for any money paid. As of 2025, confirm deposit norms with a local attorney, as the regulatory landscape may have evolved.

Electronic invoicing: Landlords are obliged to register with the Ministry of Finance (Hacienda) and to issue electronic invoices to their tenants. Non-compliance exposes landlords to tax penalties. Requesting your electronic rent receipt (factura electrónica) each month is sound practice and may be relevant for your own residency applications or tax filings.

Are security deposits required in Costa Rica, and what rules govern them?

Article 59 of the Tenancy Law (Law 7527) establishes that a security deposit accompanying a contract functions as a guarantee for rent payments and other contractual and legal obligations, unless the parties expressly agree otherwise.

A landlord may request a refundable security deposit to cover potential damage or unpaid bills. For residential rentals, the deposit is typically equivalent to one month’s rent; commercial leases carry no statutory cap. Some landlords seek two months’ deposit, which creates a grey area — understanding your rights before agreeing to any sum above the residential norm is advisable.

The law requires deposits to serve as a genuine guarantee against damage or non-payment rather than a supplementary income stream for landlords. Landlords are legally required to issue written receipts detailing the deposit amount and the conditions under which it will be returned.

Returning the deposit: At the end of the lease, the deposit must be returned provided the property has sustained no damage beyond ordinary wear and tear and all financial obligations have been fulfilled. The landlord is generally required to return the deposit within 15 business days of the lease ending, unless the contract provides otherwise.

Where deductions are made — for example, to cover repairs or unpaid bills — the landlord should supply an itemised breakdown of all costs claimed. In practice, deposits are often returned 30 days after the tenant vacates, once utility bills and any inventory can be checked and reconciled.

Deposit disputes are among the most common sources of conflict in the Costa Rican rental market, with many tenants reporting that landlords withhold funds without adequate justification. A clearly written lease setting out precise return terms and conditions is the best safeguard. Unlike countries such as the UK, where deposits must be lodged in a government-approved protection scheme, Costa Rica has no centralised third-party escrow requirement — the obligation rests directly with the landlord, making a detailed written agreement all the more important. For current guidance, consult the Ministry of Housing and Urban Settlements (MIVAH).

Are condition reports or property inspection reports used in Costa Rica before signing a lease?

Law 7527 imposes no statutory obligation to complete a formal condition report or property inventory before a tenant takes possession. Nevertheless, documenting the state of the property at the outset of the tenancy is strongly recommended and is regarded as best practice among professional property managers.

Some lease agreements include a clause requiring the property’s condition to be recorded at move-in, covering any fixtures or appliances provided. Property managers who operate professionally will typically inspect a property before and after each tenancy to record any damage and support fair resolutions between the parties.

In practice, the absence of a pre-tenancy condition record is one of the most frequent triggers for deposit disputes in Costa Rica. Given that the quality of furnished properties varies so widely, a careful inventory of all included items at the inspection stage is essential. Tenants should take time-stamped photographs or video of every room, fixture, appliance, and piece of furniture as soon as they move in, share copies with the landlord by email to create a dated record, and retain that evidence until well after the deposit has been returned.

If the landlord does not produce a condition report, draw up your own and ask the landlord to countersign it. While this step is not universal in informal or private rental arrangements, it can save considerable time, money, and frustration if a disagreement emerges at the end of the tenancy.

What qualifications or licences should letting agents hold in Costa Rica?

Real estate and letting agency in Costa Rica is not subject to compulsory government licensing in the manner that it is in many other countries. In contrast to jurisdictions such as France or the UK, where agents must hold recognised professional qualifications and be registered with a regulatory authority before they can operate legally, no equivalent mandatory licensing system exists in Costa Rica — making it all the more important for renters to exercise their own due diligence.

This open market means that almost anyone can set themselves up as a letting agent or property manager. That reality places the burden firmly on renters to investigate any agent they are considering working with.

CRGAR REALTORS® are required to complete an application process, undertake a mandatory 12-month programme of professional education, and operate in accordance with defined ethical and professional standards. Membership of one of the two principal voluntary associations — CRGAR or CCCBR — is currently the most reliable indicator of professionalism available in the Costa Rican market.

When assessing a letting agent, consider asking the following questions:

• Are they a member of CRGAR (Costa Rica Global Association of Realtors) or CCCBR (Cámara Costarricense de Corredores de Bienes Raíces)?
• Can they provide references from current or former clients?
• Do they use written contracts and issue formal receipts for all payments received?
• Are they registered with the tax authority (Hacienda)?

Always verify current licensing requirements directly with the relevant association, as the regulatory environment may change. Formal licensing has been under discussion in the Costa Rican legislature — check with CCCBR for the latest developments.

Is there a professional association or regulatory body that reputable letting agents in Costa Rica should belong to?

There are two principal voluntary professional associations that set the standard for reputable real estate and letting agents operating in Costa Rica.

These are the Costa Rica Global Association of Realtors (CRGAR) and the Cámara Costarricense de Corredores de Bienes Raíces (CCCBR). As a broad generalisation, CRGAR members tend to be bilingual, licensed Realtors® affiliated with NAR Global, and are most commonly found along the coasts and in areas with a high concentration of expats, while CCCBR members are predominantly Costa Rican agents operating primarily within the Central Valley.

Although CRGAR was the driving force behind establishing and launching the Costa Rica MLS, the CCCBR has since adopted the same platform, meaning that brokers and agents belonging to either organisation now share the same listings system. Access to this combined MLS is restricted to association members, which represents one tangible advantage of engaging a member agent.

Work only with agents who hold certification from either the CCCBR or CRGAR. Membership can be verified by requesting an agent’s CCCBR ID or consulting the official registry. The CCCBR can be found at cccbr.cr. Always confirm that contact details and registry information are current via the official website, as these details are subject to change.

The CCCBR is described by member agencies as the de facto regulatory body for the real estate industry in Costa Rica. While membership remains voluntary rather than a legal requirement, choosing a member agent provides a meaningful degree of accountability and a defined avenue for recourse should something go wrong.

What are a tenant’s rights and legal protections under rental law in Costa Rica?

Law 7527, the General Law of Urban and Suburban Leases, forms the backbone of the landlord-tenant relationship in Costa Rica, addressing everything from lease terms to the respective rights and responsibilities of each party. Costa Rican tenancy law is widely regarded as favouring tenants. While landlords retain freedom to negotiate initial rental terms, once a lease is executed the law tilts decidedly toward ensuring tenants enjoy stable, fair housing conditions.

Key tenant protections include:

• Protection against arbitrary eviction: Law 7527 shields tenants from arbitrary removal. A tenant who complies with their lease obligations is generally protected against eviction for the entire lease duration. If the property is sold, the new owner inherits the existing lease and the tenant retains the right to remain until the agreed term has run its course.
• Right to habitable premises: Landlords are required to guarantee the peaceful use and enjoyment of the property, keep it in good repair, and refrain from any interference with the tenant’s occupation. Where urgent repairs are not attended to within ten business days of being reported, tenants may undertake the work themselves and deduct the reasonable cost from their rent.
• Regulated rent increases: Landlords may not raise rent arbitrarily. For colón-denominated leases, adjustments are pegged to the Consumer Price Index (CPI) published by the government. For contracts in US dollars, rent is not subject to increases during the initial three-year term unless the agreement expressly provides otherwise.
• Automatic lease renewal protection: If a landlord fails to give the tenant at least three months’ notice before the lease expires that they do not intend to renew, the tenancy is automatically extended for a further three years.
• Dispute resolution: Costa Rica actively promotes mediation as a first recourse for rental disputes, with a neutral third party facilitating dialogue between landlord and tenant. Mediation is typically faster and less costly than court proceedings, and many local municipalities — including the Municipality of San José — offer these services at little or no cost. For cases that cannot be resolved through mediation, Costa Rica maintains specialised housing courts known as Juzgados de Vivienda, which process rental matters more swiftly than general civil courts, though proceedings can still take several months.
• No distinction for foreign nationals: Law 7527 applies uniformly to all tenants, regardless of nationality. Foreigners renting in Costa Rica are entitled to exactly the same legal protections as citizens and permanent residents under the tenancy legislation.

For authoritative and up-to-date guidance on tenant rights, consult the Ministry of Housing and Urban Settlements (MIVAH) or seek advice from a qualified Costa Rican attorney. The Poder Judicial (Judicial Branch) website also provides information on accessing the specialised housing courts.

How do I sign a lease agreement in Costa Rica step by step?

1. Find a property and verify the landlord: Confirm the landlord’s identity and that they are the registered legal owner of the property by checking the National Public Registry (Registro Nacional). If using an agent, verify their CCCBR or CRGAR membership.
2. Negotiate terms: Agree on rent, currency, any included utilities or furnishings, and whether pets are permitted. Understand that rental price and currency choice will affect your rights to future increases.
3. Review the lease in full — in a language you understand: Have the Spanish-language contract reviewed by a bilingual attorney before signing. Do not rely solely on informal translations.
4. Conduct and document a property inspection: Walk through the entire property with the landlord or agent. Note and photograph any existing damage, missing items, or maintenance issues. Ask for a signed inventory if the property is furnished.
5. Pay the deposit and first month’s rent: Pay only against a written receipt (recibo). The deposit is typically one month’s rent for residential properties (as of 2025). Verify current rules with a local lawyer.
6. Ensure the landlord registers with Hacienda: Confirm that the landlord is registered with the tax authority and will issue you electronic invoices (facturas electrónicas) each month.
7. Sign the contract: Both parties sign the written lease. Keep a signed copy in a safe place for the entire duration of the tenancy and for at least 12 months afterwards.
8. Set up utilities in your name: Transfer or set up electricity, water, and internet accounts as applicable and keep payment records to avoid deductions from your deposit at the end of the tenancy.

Frequently Asked Questions

Does a lease agreement in Costa Rica have to be written in Spanish?

Spanish is the official language of Costa Rica and the legally operative language of any lease agreement. A bilingual version may be provided for the tenant’s personal reference, but if a dispute arises it is the Spanish text that will govern. Always have a qualified professional examine the Spanish-language version before you sign.

Can foreigners rent property in Costa Rica without restriction?

Yes. Costa Rican law places no restrictions on foreigners renting residential property. The country also permits foreigners to own property outright, with no cap on the amount of land or property that may be held. All protections afforded by Law 7527 apply equally to tenants regardless of their nationality or immigration status.

What happens if I need to break my lease early?

A tenant may terminate the lease at any point by providing the landlord with three months’ written notice. Many tenants incorrectly assume that one month’s notice is sufficient — the law clearly requires three months. If the tenant fails to give adequate advance notice, the landlord is entitled to collect rent for the outstanding notice period. The contract may also include a separately agreed financial penalty for early departure by the tenant.

How are rent increases regulated in Costa Rica?

For leases denominated in a foreign currency such as US dollars, the rent is fixed for the entire contract term and no increases of any kind are permitted. For leases in Costa Rican colones, landlords may apply an annual increase based on accumulated inflation, using figures published by INEC. Where inflation remains at or below 10%, the permitted increase matches the inflation rate. If inflation exceeds 10%, the Ministry of Housing and Urban Settlements (MIVAH) determines the allowable adjustment.

How are disputes between landlords and tenants resolved?

Mediation is the preferred first step for resolving rental disputes in Costa Rica, involving a neutral third party who helps both sides reach an agreement. It is generally faster and less costly than litigation, and many municipal governments offer mediation services at minimal or no charge. When mediation does not produce a resolution, parties may bring their case before the specialised housing courts — the Juzgados de Vivienda — which are designed to handle rental matters more efficiently than the general civil court system.

What is the eviction process in Costa Rica, and how long does it take?

The standard eviction mechanism in Costa Rica is the Proceso Sumario de Desahucio (Summary Eviction Process). Grounds for eviction include expiry of the lease, documented breaches of lease terms, or the termination of a landlord’s tolerance of a tenant’s occupation. The landlord must state the basis for eviction clearly, provide the current rent amount, specify the property address, and produce evidence of ownership and the existence of a lease. The process can be protracted, and in some cases takes up to a year to conclude.

Is a lease agreement in Costa Rica legally valid without a notary?

A rental contract may be either verbal or written, though a written agreement is always preferable for clarity on both parties’ obligations. Unlike property purchase contracts, residential lease agreements in Costa Rica do not require notarisation to be legally enforceable. However, involving a notary or attorney when significant sums or complex terms are involved adds a valuable layer of protection for both sides.

What should I do if a landlord refuses to return my security deposit?

Begin by sending a formal written demand via email or registered letter, keeping a copy for your records. Costa Rican tenancy law strongly favours tenant rights, and landlords who withhold deposits without proper justification or documentation may face legal consequences. If the landlord does not respond satisfactorily, lodge a complaint with your local municipality’s mediation service or file a claim before the Juzgado de Vivienda (specialised housing court). Ensure you have preserved all receipts, photographs, and correspondence as supporting evidence.