Tenancy Law in Costa Rica

Some time ago I wrote some comments about the new law approved to accelerate the eviction processes in court. Since then, I have gone to court a few times and figured out how is it working in the day-to-day basis.

I have to say it is working good even though the specialized courts that are to be implemented to carry on the oral trials are not yet working, thus the regular judges are doing the best they can with what they have.

The system calls for cases to be resolved –basically– in a one shot hearing, to which the parties have to go only if there is an opposition on part of the defendant.

If there is no opposition or if the reasons to oppose are not included in the short list of the law, the judge immediately orders the eviction by the police forces.

One important improvement is that the tenant must deposit the monthly rent in the court, and the lack of any deposit implies an automatic termination of the case and the eviction is ordered right away. Before this law, the tenants could not pay a dime of rent and drag the case for as much as 4 years.

However, I have just tried a case past week, which has proven to me that arbitration is still a good option when the stakes are high. In this case the monthly rent is $12,000 for an industrial warehouse.

The tenant had not paid for the last four months previous to the lawsuit, and the case has been in court now for five months, you can do the math. And the court has not acted fast enough to give the plaintiff the five months of rent the tenant has deposited in the court’s account, so he is really suffering by now.

Also, the tenant, who has other businesses, a good house and likes to go fishing on his yacht, is using a lame excuse trying to use documents to prove a payment he knows he has not done, just to extend his stay. Arguing within the narrow path the law allows he has succeeded in producing the oral hearing, held past week.

The judge dismissed his arguments and in the same hearing ruled in favor of the plaintiff confirming the eviction order, but, they appealed the resolution, thus the case has to be moved up to the superior court, that surely will dismiss the appeal, but will take three or four months to do so, then the case has to come back to the original court to execute the eviction resolution

Then, by the time this eviction is finally executed, my client would have suffered nine to ten months of delays.

That seems to be the fastest the system can work.

On the other hand in arbitration, a case if there is an opposition, can be adjudicated within four to five months without appeal. Of course the plaintiff would have to cover the costs of the arbitration, but in cases with an amount of rent such as the case I just mentioned, the expenses are more than justified when one considers the cost of the opportunity to regain control of the premises and rent them right away.

An arbitration clause well drafted, calling for just one arbitrator instead of three, and appointing an efficient arbitration center could reduce costs and make the arbitration even faster. But in my experience as a litigator and as a teacher of arbitration law, I know very well that this simple step is quite often the cause of more problems instead of a solution to them.

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Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.