Rent: Can tenant and landlord agree freely to rent in El Salvador?

Property owner and tenant may negotiate and decide the rent freely by mutual agreement.

Houses with colonial interior in El Salvador

The adjustment or rental increase mechanism may also be agreed between the parties. It is common practice to establish a fixed rate of annual increases or to stipulate, as published by the Central Reserve Bank, that annually, rents are increased proportionally to the inflation rate of the previous year. It is strongly recommended that this type of clause be included in the text of the agreement.  apartment for sale

However, if a rent adjustment agreement is not signed by the parties or if the property is used for housing or public offices or authorized professionals, law allows for an increase by a Rent Court for the following occurrences:

Where the landlord has implemented improvements whose value represents at least 20% of the property's value with the tenant's approval or the Court's approval. The rent may be increased annually, if authorized, by 10% in relation to the value of the improvements. The value of the increase is usually estimated by an expert at the request of the judge.

Where the tenant submits all or part of the property and the payment by the tenants to the aggregate of what is collected from the sub-tenant becomes obviously disproportionate (although, unless the parties have otherwise agreed to, the tenant may not submit the entire property or part of it without prior written consent of the landlord).

The above rules do not apply if the property is rented to a company company.

Deposits for Security

By common consent, the parties may determine the amount of the security deposit and the conditions. The security deposit is usually the monthly rental fee.

Rental deposits in housing contracts are not customary.

What are the rights of landlords and tenants in El Salvador, in particular as regards contract duration and expulsion?

The parties may determine the duration of the lease if the property is leased for housing. The duration, however, has no effect, unless the tenant has otherwise agreed to pay the rent for the whole period.

The term determination does not allow the landlord to insist that the tenant is evicted to maturity. The tenant may continue to live in the property under the agreed terms and conditions as long as the rent agreed and no "cause of termination" has occurred.

El Salvador for sale properties

In spite of the provisions of law above - which do not apply to business rentals - it is common practice of the parties to determine the duration and agree to terminate the contract at maturity. In fact, civil and mercantile law stipulate that whenever the period is not determined for fulfilling an obligation, the obliged party may ask the judge to set the term for fulfillment.

In the event that a termination cause has been identified either by law or by the agreement, or where both parties consent, the agreement may be terminated before the end of the contract period. If the agreement is terminated at the initiative of the tenant, the landlord usually receives the rent for the rest of the period.

Furthermore, Salvadoran law permits the establishment of a "diplomatic clause" entitling tenants to terminate the lease without liability at any time.

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