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Lease question - colones or US $$

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dustymar
  4/1/2014 17:03 EST

We just received a new lease from our landlord. Six months ago when we signed our lease it specified the rent in colones with US dollars in parentheses. When the exchange rate was 500:1, this made sense, but now it doesn't. Our landlord has asked for this month's rent in dollars, which comes out to a lot more than if we paid him in colones. What are we legally obligated to do? Thanks! Have to sign a new lease and I want to be clear on our responsibilities.

valentinaduran
  4/1/2014 17:16 EST

This is very normal in Costa Rica but usually only foreigners(developed nations only) pay rent in dollars. Basically you have to pay the amount in colones to buy those dollars to pay that specified amount. I suggest you have a bank account in dollars with income or deposits if you can made from US sources every month so you won't feel that difference as much. Not sure if you understand me. For example if your rent is 500.00 USD$ and you have a account in the US where you can make a withdrawal and pay this rent it is easier and than if you had a colones account in CR and had to come up with more colones every month to pay the rent. Every year when you renew lease make sure to get copy of it first and read well before you sign, it should be in English or provide english translation if landlord expects you to pay in USD. Good luck!!

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dustymar
  4/1/2014 19:09 EST

Thank you. I think. Maybe I'm more confused than ever. The lease states (for example) "250000 colones ($500)" -- so when we signed it last year, those were both the same amounts. Now 250000 colones (well, today anyway) is equal to $460. So if I pay in colones, I keep $40 in my pocket, but if I pay in dollars, my landlord gets 273000 colones instead of 250000. He usually wants colones, but this month he's asked for dollars. I was right -- I'm still confused!!!

shermanwc
  4/1/2014 19:30 EST

I think that you have the right to argue that the lease states colones as the primary currency and the dollars amount is an "estimate", since it is in parentheses. Sure, the landlord would "prefer" to have dollars but you could pay in colones and say that you met the lease. Of course, they likely will raise the rent the next chance they get.

puravida944
  4/2/2014 13:14 EST

He just wants to rip off his stupid gringo renter. I never have gotten a deposit back even though I have always left them worth a whole lot more. If Your contract is in Calones your rent is in Calones and he can not change his mind now, the contract is for him and you. Just pay him in Calones and if he continues he will have to get an attorney, it will cost him more than the he is trying to steal.
I learned how to debate in Spanish, there is need for it in Costa Rica.

Kohl
  4/2/2014 14:02 EST

"Basically, you can sign a rental contract with the owner (landlord) for any period of time you like. What is interesting as that even if it is for six months, the landlord cannot cancel or make changes (see below) for three years."

Taken in part from:

http://www.therealcostarica.com/realestatecostarica/renting_costa_rica.html with a further link in Spanish.

But the landlord could make things difficult for you .....

Good luck!

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dustymar
  4/2/2014 16:27 EST

To Puravida944, Just FYI, landlord is Canadian. I don't think he's trying to rip me off. When his family has gone to Canada on vacation, they've asked for the rent in US $$ -- and when things were equal, we were fine -- I LOVE my house and the landlord and his family are great, so I don't want to make waves -- on the other hand, I want him to know I am aware of the current differences in colones and $$s -- we're taking lease to him tonite. Wish I weren't such a whimp.

dustymar
  4/2/2014 16:32 EST

Thank you Kohl. I think he's just using a boilerplate lease because it says all kinds of official-looking things like if we go month-to-month after our lease is up, he can increase the rent by 50% -- don't see that ANYWHERE in the Costa Rican tenant/landlord laws!

PuraVida
  4/14/2014 09:07 EST

Does the lease have the amount in colones written out or just with the numerical figure? Residential lease contracts are valid for 3 years. If your lease states payment in colones, it can be subject to a 1% -15% increase per year, but this should be written in the contract. If the agreement is for payment in dollars, there is no annual increase. IMO, if you have been paying in colones and have receipts, continue paying in colones.

fjankilevich
  4/15/2014 15:24 EST

If the contract has the amount in colones and the amount in USD in parenthesis, then the valid value is the one in colones. Technically, he should only charge you the value in colones because the contract is in colones and he should only charge you the value in colones because the contract is in colones, unless it is specified in the contract that you will pay in US dollars. From what you describe, the clause sounds ambiguous and the contract should be rendered ineffective by a Costa-Rican Court of Law. However, legal fees are going to be much more expensive and it would take a very long time to go to court or to pay for a lawyer. It seems the most practical thing to do is to give the required ninety day notice by law that you are cancelling the contract and use the ninety days grace period to find a new place.

Kohl
  5/22/2014 09:18 EST

I read this article today, and thought it important for renters to be aware of their rights, regarding a new lease.

http://www.qcostarica.com/2014/05/22/blog-the-costa-rica-landlord-game/

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dustymar
  5/22/2014 10:32 EST

Thanks Kohl. Very interesting article. I hope the folks (and their kitties) get a positive resolution. We ended up signing a new 3-year lease but changing the terms that said the rent (in colones) COULD be increased, to something about a mutual negotiation. Probably not worth its salt here, but our landlord was okay with it (we picked colones because right now, it's much better for us with the exchange rate -- saving about $100/mo. -- we couldn't get the landlord to understand that his apples-to-apples comparison of colones to USD didn't work any more). So. We love our house and the OTHER house that we're getting to use as a studio. We love our Tica landlady and her Gringo spouse (he's the one who didn't get the "no longer apples-to-apples" comparison). When next spring comes around, we'll see if they try to negotiate a rate increase or leave it be.

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