Lawmakers approve rental law with a limit of three deposits

The Chamber of Deputies approved the bill on real estate rentals on Friday in its second reading. The bill was amended by legislators following comments from various social sectors rejecting some of the proposal's articles.

When it was approved in its first reading on June 25, the rental bill was criticized for imposing strict rules on landlords and restricting rental contracts .

Before approving it on second reading, the deputies amended article eight of the bill and added a paragraph to specify that the readjustment of the rental price , for the purpose of increasing the rate, will be subject to agreement between the parties and that, in the case of housing , the amount should not exceed 10% of the rent .

Another change in the bill concerns Article 13, which now requires an amount no greater than three rental deposits . The original bill only required two deposits .

In the same article, a paragraph was added stating that, in the case of commercial real estate , deposits are agreed upon between the parties , without any strings attached.

Another change introduced by the deputies is that at the end of the term established in the rental contracts , owners and tenants will be able to agree on another period for their renewal .

Furthermore, they specified in Article 10 that failure to pay rent is grounds for the rental contract to be terminated and cancelled.

The bill, which was approved on Friday in its second reading, also changes Article 11 of the bill, which originally stated that when a tenant dies , their partner or children will take over the rental contract. However, it now specifies that they may retain the contract "as long as the landlord is guaranteed payment of the rent ."

They also modified article 12, which explains the abandonment of buildings .

In this regard, the congressmen added two paragraphs to clarify that abandonment of rented properties will only be verified by a notary public , and that a justice of the peace or a court of first instance may authorize the owner to possess the property, provided that a notarial act is obtained.

The initiative approved in the first discussion established that deposits would be kept in any commercial bank near the property, but this aspect has now been changed so that the funds will only be kept in the Banco Agrícola and the Banco de Reservas —with prior agreement between the parties—and that, in addition, financial institutions are not required to maintain rental contracts , as stipulated in the original project.

The piece known in the first reading required owners to offer the property first to the tenant who lives there in the event of selling the property , but now that possibility has been eliminated .

In favor of tenants

The deputies also amended paragraph four of Article 24 to specify that tenants will only be obligated to pay for repairs to properties if the damage occurred through the use or enjoyment of the property. This was not specified in the original text.

In this regard, Article 27 of the bill was also eliminated , which established that damage to property should be borne by tenants or lessees.

Evictions

Article 45 of the bill was changed so that court rulings related to rentals are made in accordance with Law 396-19 , on the use of public force .

The original bill stipulated that property owners , lawyers, or bailiffs who carry out evictions without the proper legal process would face jail time of up to five years. However, the change in the bill clarifies that any eviction will be carried out using the law granting public force .

Goes to the Senate

The rental bill, authored by Alfredo Pacheco , now goes to the Senate for the same review process and possible approval in two readings.

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