Security deposit laws costa rica | Landager

Security deposits in Costa Rica act as a guarantee for the fulfillment of the lease obligations, governed by the General Law of Urban and Suburban Tenancies (Law No. 7527), which came into effect on 17 August 1995. Under Article 92 of this law, the security deposit is strictly capped at one month's rent; any contractual clause requiring a higher amount is null and void. While market practice for commercial properties may occasionally suggest higher amounts, landlords must remain aware that such demands lack statutory backing and are legally unenforceable. The return process is where most disputes occur. To avoid legal trouble, landlords should provide the tenant with a detailed liquidation sheet. This document should list any deductions, such as unpaid electricity, water, or cable bills, and specific repair costs supported by receipts, as permitted under Article 59. If a landlord refuses to return a deposit without valid justification, the tenant can file a claim in the small claims courts (Juzgados de Menor Cuantía). To stay compliant, always keep the deposit funds separate and ready for return within the timeframe specified in the lease agreement.

Mastering Security Deposit Management

The security deposit acts as a shield for the landlord against property damage and unpaid utility bills. In Costa Rica, Article 92 of Law No. 7527 establishes a hard limit of one month's rent for both residential and commercial units governed by this statute. Market forces often standardize the deposit at this maximum limit.

The Role of the Handover Protocol (Acta de Entrega)

Without a signed "Acta de Entrega" (Handover Protocol) at the start of the lease, the security deposit is nearly impossible to defend in court. This document must detail the state of walls, floors, appliances, and even the functionality of light switches. At the end of the lease term, use this original document to compare with the move-out condition.

Handling Exchange Rate Risks

Since many deposits are taken in US Dollars but repairs are often paid in Colones, specify in the lease how the exchange rate will be handled upon return. The standard is to return the same currency as received.

Common Deductions: Utility Bills

In Costa Rica, utility bills (water and electricity) are often issued with a one-month lag. Landlords should retain a portion of the deposit or a separate "utility bond" to cover the final invoices that arrive after the tenant has vacated. Never release the full deposit until you have seen the final "zero balance" certificates from the AyA (water) and ICE/CNFL (electricity).

How Landager Helps

Landager tracks lease terms, automated rent reminders, and document expiration - making it easy to stay compliant with Costa Rica regulations.

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