The Truth About Evicting Bad Tenants in Costa Rica

So you bought your dream home in Costa Rica. Perhaps you have been dreaming of the Pura Vida Costa Rica promises. Suppose you are like so many people and you want to rent your property out when you are not there or you are just interested in having a home as an investment for your retirement future. In that case, it’s essential to understand the ins and outs of being a landlord here.

Renting your property can be a rewarding experience, but it also comes with its share of responsibilities. First, ensure you are aware of the local laws regarding rental properties. Familiarize yourself with tenant rights, eviction processes, and any needed licenses or permits. Building a solid rental contract can help establish clear terms for both you and your tenants.

When it comes to finding tenants, advertising your property in both local and online platforms can attract a variety of potential renters. It is essential to screen applicants carefully to ensure they’ll treat your home with respect and abide by the agreed-upon terms.

In the unfortunate event that you may need to evict a tenant, it’s crucial to follow the legal procedures properly. Keep records of all communications, payments, and incidents to support your case if it goes to court.

With careful planning and a bit of patience, renting your dream home can be a wonderful aspect of your Costa Rican adventure!

Different Types of Evictions

Squatters

Key Points on Squatters' Rights

  1. One-Year Rule for Acquiring Rights:

    • If a property owner allows someone to use or possess their property for over a year, that person may acquire certain rights to the property.

    • These rights can only be revoked in exceptional cases, such as eminent domain, and require proper compensation.

    • Make sure you study the title of your property as it is registered in the Registro Publico prior to purchasing and have your lawyer maintain this annually. This is called "alerta registral" that you can monitor real estate holdings and CR LLC.

  2. Ten-Year Rule for Full Ownership:

    • A person who has possessed a property for at least ten years can claim full ownership through the courts and register it in the public registry.

  3. Eviction Timeline:

    • Action must be taken within the first three months of squatter invasion to ensure eviction is possible.

    • If no action is taken within a year, squatters may demand compensation for improvements made to the land.

  4. Legal Actions to Take:

    • File an Interdicto (civil procedure) or criminal charges for Usurpación (usurpation) promptly if squatters encroach on your property.

    • Document all evidence of ownership and encroachment, including videos and notary-public filings.

Breach of Contract

In Costa Rica, eviction processes, including those based on administrative violations, are governed by the General Law of Urban and Suburban Leasing (Ley General de Arrendamientos Urbanos y Suburbanos, No. 7527). Here's a detailed outline of administrative eviction due to lease violations and community disturbance:

Administrative Eviction in Costa Rica

1. Grounds for Eviction
Eviction can occur when tenants breach the terms of the lease agreement or engage in behavior disruptive to the community. Examples include:

  • Unauthorized Property Alterations: Making changes to the property without the landlord's consent. This includes subleasing if specified in the lease.

  • Unauthorized Pets: Keeping animals on the property contrary to the terms of the lease.

  • Illegal Activities: Using the premises for criminal acts such as drug trafficking or other unlawful endeavors.

  • Disruptive Behavior: Actions that disturb the peace of neighbors or the community, such as hosting loud parties or engaging in threatening conduct.

2. Documentation Requirements
To proceed with eviction, landlords must:

  • Maintain clear evidence of the tenant's violations. This may include photos, videos, written warnings, police reports, or witness statements.

  • Issue a formal written warning to the tenant about the violation, giving them a chance to address or rectify the issue (if applicable).

3. Legal and Administrative Steps
Administrative eviction involves several steps:

  • Notification to the Tenant:
    The landlord must send a written notice, typically via a certified letter or legal notification service, detailing the violation and specifying a deadline for compliance (usually 30 days).

  • Mediation:
    In Costa Rica, mediation is often required to resolve disputes before escalating to formal eviction. Mediation is conducted through a public or private conciliation center. This is more cost effective.

  • Filing for Eviction:
    If the tenant fails to address the issue, the landlord can file an eviction case with the local Juzgado de Arrendamientos (Rental Court).

  • Court Review:
    The court examines the evidence provided by the landlord and the tenant's defense (if any). If the court finds sufficient grounds, it will issue an eviction order.

  • Execution of the Eviction Order:
    If the tenant refuses to vacate, the court can authorize law enforcement to enforce the eviction.

4. Timelines and Costs

  • Timelines: Administrative eviction cases can take anywhere from a few months to over a year, depending on court backlogs and the complexity of the case.

  • Costs: The landlord may incur legal fees, mediation costs, and court filing charges. Legal fees for eviction in Costa Rica can be from $3,500 to $20,000 depending on the situation. These costs may be recoverable if the eviction is successful and included in the claim.

5. Tenant Protections
Costa Rica’s tenancy laws prioritize protecting tenants’ rights. Therefore:

  • The eviction process must follow legal protocols strictly.

  • Landlords cannot forcibly evict tenants without a court order.

  • Tenants have the right to defend themselves and present evidence in their favor.

Eviction for Non Payment 0f Condo Fees, Rent, or Utilities

What Does the Tenant Monitory Law Entail?

This new law is referred to as "arrendaticio monitorio" because it utilizes a special order-for-payment procedure. This process aims to expedite the resolution of legal disputes where there is little room for contradiction or controversy, specifically in cases related to lease agreements.

Grounds for Application

This law applies under two specific circumstances:

  1. Expiration of the Lease Term: When the property owner has expressed in writing their intention not to renew the lease.

  2. Tenant Breach: Specifically for non-payment of rent, condominium fees, or public utility bills.

Legal Process Overview

  • Filing a Lawsuit: The landlord initiates the process by filing a claim with an Eviction Court, a judicial body established by this law.

  • Initial Resolution: The Judge may issue an eviction order at the outset, functioning as a preliminary ruling. The defendant is then given 15 days to comply or present objections, supported by evidence or relevant exceptions.

  • Ongoing Payment Requirement: From the time of the initial resolution, the Judge orders the tenant to continue paying monthly rent throughout the legal proceedings.

  • Asset Inventory and Retention Rights: The landlord can request an inventory of the tenant’s assets within the leased property and may exercise retention rights over these assets to secure payment.

Final Judgment and Eviction

If the final judgment is issued in favor of the landlord, confirming the eviction order, the owner can regain possession of the property with the assistance of administrative authorities.

By streamlining the eviction process and providing landlords with interim remedies, the Tenant Monitory Law seeks to resolve the challenges associated with non-payment, ensuring a more efficient resolution for property owners.

What to Expect

Be prepared. While the high rental rates in Guanacaste, Costa Rica, may seem like an enticing reason to enter the market, it’s important to understand the potential risks involved. Who wouldn’t be tempted by a booming rental market where the average home rents for $4,500 USD per month or more, with high-season rates often doubling that amount?

However, before diving in, it's crucial to be aware of the common scams and fraudulent schemes that can occur in Costa Rica. Surprisingly, a significant portion of luxury rental fraud is committed by expats themselves. Staying informed and exercising caution can help you navigate this lucrative yet potentially challenging market successfully.

Many investors come across horror stories online about Costa Ricans squatting on unattended or abandoned land. However, the reality for most investors purchasing real estate in beach communities is quite different—your potential renters are more likely to be expats and transplants to Costa Rica.

While a prospective tenant may present well on paper or impress you with talk of their investment portfolio, it's essential not to be dazzled. Conduct thorough due diligence, just as you would back home—if not more so—given the unique dynamics of living in paradise. These idyllic locations tend to attract a wide range of individuals, including opportunists looking to take advantage of foreign property owners and inexperienced landlords.

Keep in mind that eviction proceedings in Costa Rica can be lengthy and costly, ranging anywhere from $3,500 to $20,000, depending on the complexity of the case. Taking the time to carefully vet tenants upfront can help you avoid costly legal battles down the line.