Ecuador’s real estate laws should be part of the information that you will research before moving to this country. It is important that you understand the specific laws that apply to real estate in Ecuador and that you will comply with once you live in a new country. Regardless of where you plan to retire or relocate, you must be a law-abiding resident to avoid any unfortunate incidents with the local government.

Generally, foreigners have to understand the rental laws in their host country because most of them like the flexibility that this type of living arrangement brings. It is important to be aware of this so that you can avoid any adverse incidents with your future owner or landlord or perhaps even the purchase of a real estate property in Ecuador. You want to avoid violating any of the local laws and, at the same time, you want to know your rights as a tenant and as a real estate owner in Ecuador.

4 clauses of the Ecuador rental law that you should know and how it affects real estate in Ecuador

You should be happy to know as a tenant that Ecuador’s real estate laws on rental homes are tenant-friendly.

To give you a brief understanding of your rental rights in Ecuador, here are the 4 important details to know.

In the lease period.

Most rental contracts, according to the Real Estate laws of Ecuador, are valid for one year. However, the tenant has the right to request a two-year lease. During this time, the landlord cannot increase the rent. Therefore, if you know that you can stay in a house for at least 2 years, you can request a two-year contract from the owner. If they agree, but your rent was still raised in your second year, then you can file a complaint with the rental court (Tenancy Judge). If the court rules against the landlord, he will be fined for violating the Real Estate law in Ecuador.

We contract termination.

In the event of an early termination, notice is expected from the party that initiated the termination of the real estate contract. If initiated by the landlord or owner, the tenant should receive at least 3 months’ notice to give them enough time to find another home to move into. If started by the tenant or tenant, they must notify the landlord at least one month in advance of the date they will move in. There may be some landlords who force tenants to pay for the remaining months of the lease, but the latter is not required to comply.

About the rental price.

The laws of Ecuador on the rental of houses and real estate in Ecuador, the owner or the owner can only collect the rent based on the value and current condition of the house. The law cites a formula that determines the percentage of the rent. That means if you are renting a great home and in a thriving neighborhood, expect to pay more in rent compared to homes in more modest communities. In case the landlord wants to increase his rate more than what is allowed, he must file a petition in a rental court. You should also know that current law does not allow landlords to make automatic annual rent increases.

About the legality of the rental contract.

It is also specified in the law that the rental contract is only valid if it is duly notarized. If the contract you signed is not, the landlord or landlady cannot take legal action against you. But if they have a copy of a notarized rental agreement, then that can be presented as a valid document in court.

Important modifications to the leasing law in 2012 for Real Estate in Ecuador

There have been amendments to this law and you may want to keep abreast of all of them. In 2012, the president of Ecuador vetoed the Reforms to the Tenancy Law and sent them to the National Assembly for a second debate. In February 2013, the approved text of the amended law (Modifying Law of the Codified Leasing Law) was sent to the President for approval, veto or disapproval.

The main modifications are the following:

• Municipalities are mandated to have a Real Estate Leasing Registry Office in Ecuador that has tenants and that helps keep records of rental contracts. The landlord must obtain a record within 30 days from the date of the rental agreement. Must present proof of security deposit and rental certificate. Non-compliance by the owner and late registrations will be fined up to 10% of the rental price. This office is also responsible for determining the highest rental price for a property and taking care of the tenant’s deposit.
• The rental price of any property must not exceed 1/12 of 10% of its commercial appraisal. The owner or landlady will be fined for any violation of this clause. They also cannot ask the tenant to pay for any expenses that involve condo regimes (or areas shared and used by other people). They are also not allowed to suspend the tenant’s utilities even if the rent was not paid.
• Security deposits are allowed, but should not exceed the value of two monthly rentals. The owner of the home will not keep this amount, but it must be deposited with the Leasing Registration Office.
• The landlord or landlord can terminate a rental agreement if the tenant did not make two full monthly rent payments. This is true even if the payment is simply incomplete. Failure to pay for utilities for more than three months is also a valid reason for termination of the rental agreement.
• In the event of a dispute, the amendment indicates that it can be done before a leasing judge through a verbal process.

Ecuador’s Real Estate laws change over time, so you should be aware of what is going on around you in case you start living in this country.