Costa Rica Landlord-Tenant Law for Nosara Owners (2026)

If you plan to rent your Nosara property to a long-term tenant, you are about to sign a contract governed by one of the most tenant-friendly rental laws in the Americas. Costa Rica landlord-tenant law is set out in Law 7527, the Ley General de Arrendamientos Urbanos y Suburbanos, and it overrides almost anything you write into your own lease. A one-year contract is legally a three-year contract. A rent increase clause in a dollar lease is void. And the only way to remove a tenant who stops paying is through a judge.

None of this makes long-term renting in Nosara a bad strategy. Many owners in Playa Pelada, the K Section, and Garza run profitable, low-stress annual leases to teachers at the international schools, remote workers, and families on a one-year trial before they buy. But it does mean the rules are different from what a Canadian or American landlord is used to, and the owners who get burned are almost always the ones who assumed their home-country instincts applied here.

📊 Under Law 7527, every residential lease in Costa Rica has a minimum term of three years, regardless of what the contract says. A lease priced in US dollars cannot be increased at all during that term.

This guide covers what the law actually says, how it plays out in Nosara specifically, and how to structure a lease that protects you while staying enforceable.

The Law That Governs Every Long-Term Lease in Nosara

Law 7527 has been in force since August 1995 and applies to every lease of a house, apartment, or building in Costa Rica, whether written or verbal, in Spanish or English. It covers residential and commercial tenancies, though the strictest protections apply to housing.

What the law does not cover matters just as much for a Nosara owner:

Hotels, hostels, and vacation accommodation (stays of one day to 30 days)
Tourist rentals in zones designated by the ICT (Costa Rican Tourism Institute), which are excluded under Article 7
Non-traditional accommodation registered under Law 9742, the 2019 Airbnb law, which applies to stays of 24 hours up to one year
Parking spaces, advertising space, and employer-provided housing

That split is the single most important concept in this article. A furnished vacation rental booked through Airbnb for six weeks is not a lease under Law 7527. An unfurnished house rented to a family for a year with a signed contract is, and that family now has rights you cannot contract away.

For the vacation rental side of the coin, see our guide to short-term rental regulations in Nosara. This article is about the other side.

💡 Key insight: The moment you sign a residential lease with a tenant who lives in the property as their home, Law 7527 applies in full. Calling it a "12-month furnished rental" in the contract does not change that.

The 3-Year Minimum Term, Explained

Article 70 of Law 7527 sets a minimum term of three years for residential leases. This is a public policy provision, which in Costa Rican legal terms means the parties cannot waive it. If your contract says one year, a judge reads it as three.

Here is how that plays out in practice:

Situation	What actually happens under Law 7527
Lease written for 12 months	Tenant has the right to stay 3 years if they keep paying and follow the lease
Lease written for 3 years, term ends	Automatically renews for another 3 years unless the landlord gave written notice
Landlord wants to end the lease at year 3	Must notify the tenant in writing at least 3 months before the expiry date
Tenant wants to leave early	Must give the landlord 3 months' written notice (Article 72), unless the contract says otherwise
Landlord sells the property mid-lease	The lease survives the sale; the new owner steps into the landlord's shoes
Contract with no end date	Not allowed; indefinite leases are void and default to the 3-year term

The asymmetry is deliberate. The tenant can leave with three months' notice at almost any point. The landlord cannot end the lease before year three without a legal cause, and even at year three the exit requires notice sent well in advance.

For a Nosara owner, the most common way this bites is the "I'll rent it for a year while I decide" plan. You lease your Guiones house to a family in January intending to move in yourself the following January. If they want to stay, they can, for another two years. Your only tools are the tenant's goodwill, a negotiated buyout, or the eviction grounds listed later in this article.

What you can legally put in the lease

The law leaves plenty of room for negotiation on everything it does not fix:

A penalty for early termination by the tenant. Commonly one to three months' rent, and often structured so the deposit is forfeited if the tenant leaves in year one.
Currency of the rent. Dollars or colones, your choice, but the choice has consequences (next section).
Deposit amount. No legal cap. One month is customary; two is common for furnished homes with pools.
Who pays which utilities, pool and garden maintenance, and internet.
Pet clauses and pet deposits.
Landlord inspection rights. Monthly inspections with reasonable notice are permitted.
Use restrictions, for example no subletting and no short-term re-letting on Airbnb.

That last one deserves its own line item. A tenant paying $2,500 a month for a walk-to-beach Guiones home can list it on Airbnb for $400 a night in January. Your lease should prohibit it explicitly, and your property manager should be checking listings during high season.

💡 Key insight: You cannot shorten the three-year term, but you can make leaving early expensive for the tenant and make staying conditional on behaviour. Put the penalty, the no-sublet clause, and the inspection right in writing, in Spanish, reviewed by a Costa Rican lawyer.

Rent Increases: Dollars vs. Colones

This is where Nosara owners most often write an unenforceable lease. Almost every rental in Guiones and Pelada is priced in US dollars. That is fine. But Law 7527 treats the two currencies completely differently.

Lease currency	Annual increase allowed?	How it is calculated
US dollars (or any foreign currency)	No. Rent is frozen for the full 3-year term	The law assumes exchange-rate movement already compensates the landlord
Colones	Yes, once per contract year	Capped at the previous 12 months' inflation (IPC) when inflation is 10% or below; MIVAH sets the cap above 10%

A "3% annual escalation" clause in a dollar lease is not a negotiating point. It is void, and judges enforce that strictly. The only way to raise the rent on a dollar lease is to wait until the three-year term ends, give the non-renewal notice, and sign a new contract at a new price.

Even a colones lease does not help much right now. Costa Rica's consumer price index has been negative for most of 2025 and 2026, with INEC reporting a 12-month change of -0.17% in August 2026. The permitted increase on a colones lease this year is effectively zero. A colones lease also exposes you to currency risk, since the colón has strengthened against the dollar in recent years, and every colón increase must be documented with an INEC or CPA certification and take effect the month after written notification (Article 67).

For most foreign owners in Nosara, the sensible approach is:

Price the lease in dollars at a rate you are content to hold for three years.
Build the expected value of the first three years into the starting rent rather than into an escalator.
Diary the non-renewal notice date (three months before expiry) the day you sign.

💡 Key insight: In a dollar lease, the rent you sign today is the rent you get in year three. Set it accordingly and treat the three-year mark as your only repricing window.

What Long-Term Rent Actually Looks Like in Nosara

Long-term rates in Nosara sit well below vacation rates, but they are still high by Costa Rican standards because the tenant pool is largely foreign. Published monthly asking rates from Nosara management companies in 2026, exclusive of 13% IVA where it applies:

Property type	Location	Monthly asking rent (USD)
Studio	Playa Pelada, walk to beach	$875 to $1,300
1 bedroom	Pelada / Guiones, shared pool	$950 to $1,500
2 bedroom condo or casita	Guiones, walk to beach	$900 to $2,600
3 bedroom house with pool	Guiones / Pelada, walk to beach	$3,000 to $5,500
4 bedroom house with pool	Guiones, walk to beach	$3,800 to $6,000
5 to 6 bedroom villa	Guiones / Garza	$6,500 to $9,300

Seasonal furnished rentals (three to six months in high season) run far higher, often $5,000 to $20,000 a month for premium homes, but those typically fall under the tourist accommodation rules rather than Law 7527 and are covered in our long-term vs. short-term rental strategy comparison.

Who is renting annually in Nosara?

Families trialling a year before buying, often timed to the school calendar at Del Mar Academy or Nosara Pacific Academy
Teachers and staff at the international schools and wellness centres
Remote workers and semi-retired couples who want a base without the purchase
Buyers waiting on construction of their own lot in Playa Guiones or Garza

That tenant profile is a real advantage. Most annual tenants in Nosara are solvent, foreign, and reachable. Screening still matters, and a property manager who verifies income and references is worth the fee. See our guide to choosing a Nosara property management company.

💡 Key insight: A 3-bedroom pool home in Guiones leased at $4,000 a month for three years produces $144,000 of predictable income with one tenant, one turnover, and no platform fees. That is the case for long-term renting, and it only works if the lease is drafted to Costa Rican law.

Deposits, Advance Rent, and the Tenant's Rights

Article 59 of Law 7527 treats the security deposit as a guarantee for rent and other obligations under the lease. A few practical points:

No statutory cap on the deposit. One month is customary, two is defensible for a furnished home.
Advance rent is limited to one month. You can collect first month plus deposit, but not six months up front as "prepaid rent" and call it a deposit.
Return timing should be written into the lease. Thirty days after handover, once utilities and inventory are reconciled, is standard practice.
Deductions must be documented. Deposit disputes are the most common landlord-tenant conflict in Costa Rica, and a signed move-in inventory with photographs is your evidence.

The tenant's core rights under the law include quiet enjoyment of the property, the right to demand necessary repairs (and to make them and deduct the cost from rent if the landlord refuses), the right to a receipt for every payment, and the right to deposit rent with the court if the landlord refuses to accept it. That last one matters: a landlord who stops accepting rent hoping to manufacture a non-payment eviction will lose, because the tenant can pay the court instead.

Landlord obligations are mostly about maintenance. You must keep the structure, plumbing, electrical, and essential services in working order. In Nosara that means the well pump, the septic system, the pool equipment, and the roof during green season. A lease that pushes all maintenance onto the tenant will not hold up for structural or essential-service failures.

Eviction in Costa Rica: What It Takes to Remove a Tenant

There is no self-help eviction in Costa Rica. Changing the locks, cutting the water, or removing the tenant's belongings exposes you to criminal liability, and it will not get your house back. Eviction of a tenant under Law 7527 is a judicial process.

The recognised grounds for terminating a residential lease before the three-year term include:

Non-payment of rent
Expiry of the term where proper three-month notice was given
Breach of the lease (unauthorised subletting, prohibited use, damage)
Serious damage or illegal activity on the property
Assignment or subletting without the landlord's written consent

Two court routes exist:

Route	Used for	Typical timeline	Tenant defences
Proceso Monitorio Arrendaticio (Arts. 110 to 112, Civil Procedure Code)	Non-payment; expiry of term with documented notice	Fastest option; commonly 3 to 6 months in practice	Limited to proof of payment, proof the term has not expired, or that no lease exists
Proceso Sumario de Desahucio (Art. 104, Civil Procedure Code)	Lease violations, landlord tolerance ending, other causes	Longer; depends heavily on the court's caseload	Broader; tenant can raise any contractual defence

For a non-payment case the monitorio route is the one to use. You file the lease, proof the rent is unpaid, and (for an expired term) the written non-renewal notice. If the tenant cannot show they paid, the court orders eviction and can seize tenant assets on the property to cover the debt.

Realistic expectations for a Nosara owner:

The competent court is in Nicoya, and your lawyer will file there.
Budget $1,500 to $4,000 in legal fees for an uncontested monitorio case, more if the tenant fights.
Rent is usually unrecoverable in practice even when the judgment awards it, so a strong deposit and fast action on the first missed payment matter more than the judgment.
A lease that was never signed, or exists only in English, or does not state the rent and term clearly, will slow everything down.

💡 Key insight: Your protection against a bad tenant is not the eviction process. It is tenant screening, a lawyer-drafted Spanish lease, a proper deposit, and filing the monitorio on the first missed month rather than the third.

Taxes on Long-Term Rental Income

The good news for annual-lease owners is that long-term residential income is taxed more simply than vacation rental income.

Tax	Long-term residential lease	Short-term vacation rental (under 30 days)
Income tax	Capital income regime: 15% on 85% of gross rent, an effective 12.75% with no expense deductions, filed monthly	Same 12.75% capital income regime for most foreign owners from 2026, or the general regime if the owner is registered as a business
IVA (13%)	Exempt when monthly rent is at or below 1.5 base salaries (roughly ₡700,000, about $1,350 a month in 2026). Above that, 13% IVA applies to the full rent and the landlord must register and collect it	13% IVA applies to every booking
Platform withholding	None	Airbnb and similar platforms withhold and remit

Since almost every Nosara long-term lease exceeds the IVA threshold, assume you will be registering with Hacienda, adding 13% on top of the rent, and filing monthly. The listing rates in the table above are quoted "plus IVA" for exactly this reason. Full detail is in our guide to Nosara rental income tax in 2026, and US owners should also read the US tax implications post.

Buying a Nosara Property With a Tenant in Place

Law 7527 also affects buyers. When a tenanted property sells, the lease transfers with it. The new owner inherits the tenant, the rent, the remaining term, and the deposit obligation. You cannot close on a house in the K Section and give the tenant 30 days to leave.

Before writing an offer on a tenanted property, get:

The signed lease, in Spanish, with the start date, term, rent, and currency
Proof of rent payments for the last six months
The deposit amount and confirmation it will be credited to you at closing
Any notices already served, especially a non-renewal notice, with proof of delivery
The tenant's IVA and utility arrangements

If the lease has 26 months to run at $2,800 a month in dollars and you wanted the house for yourself this winter, that is a negotiation with the tenant, not a legal right. Price it in. Our post on what transfers with a turnkey rental sale covers the paperwork side, and your Nosara real estate lawyer should review the lease as part of due diligence.

💡 Key insight: A tenant in place is either an asset (income from day one, no vacancy) or a liability (no possession for two years). Which one depends entirely on what the lease says, so read it before you offer.

A Lease Checklist for Nosara Owners

Before you hand over the keys to an annual tenant, your contract should contain:

Full legal names, ID or passport numbers, and the property's folio real number
Rent amount, currency, due date, and payment method
A term of three years (or a shorter stated term with the understanding that three years applies)
Deposit amount, purpose, and return procedure with a 30-day reconciliation window
Early-termination penalty for the tenant
No subletting and no short-term re-letting clause
Utilities, internet, pool, garden, and pest control responsibilities
Landlord inspection right with notice period
Pet terms
IVA treatment stated explicitly (rent plus 13% where applicable)
Signed move-in inventory with dated photographs, attached as an annex
Spanish as the governing language, with an English courtesy translation

Have a Costa Rican attorney draft it. A template from a home-country landlord association will contain at least three clauses a Nicoya judge will ignore.

Is Long-Term Renting Right for Your Nosara Property?

Long-term leasing suits owners who want predictable income without the turnover, platform fees, and 12-month management intensity of vacation rentals, and who are genuinely willing to give up the property for three years. It suits properties slightly off the prime vacation strip, unfurnished or lightly furnished homes, and owners who live abroad and want one reliable tenant rather than forty guests a year.

It does not suit owners who want the house for themselves in high season, who are counting on annual rent escalation, or who expect to be able to end a lease on short notice. For those owners, a registered seasonal or vacation rental, with its own rules, is the better fit.

If you are still deciding what to buy, the Nosara buyer's guide walks through property types and neighbourhoods with rental strategy in mind, and you can browse current Nosara listings to see what is available in each price band. And if you already own here and want a second opinion on a lease before you sign it, get in touch. We have seen enough three-year surprises to know which clauses matter.

This article is general information about Costa Rican law as of September 2026, not legal advice. Law 7527 and the Civil Procedure Code are applied by courts case by case. Consult a licensed Costa Rican attorney before signing or terminating any lease.

Costa Rica Landlord-Tenant Law for Nosara Owners: The 3-Year Lease Rule, Rent Increases, and Evictions (2026)