By Wendy Anders

A reform of the Costa Rican rental laws proposed in 2013 went into effect earlier this year, bringing relief to the country’s estimated 1/4 of a million renters who previously were charged up to 15 percent annual rent increases, reported ElMundo.Cr today.

So, if your lease is up for renewal this month and your landlord plans to raise your rent, the increase under the new law can be no greater than that rate of inflation during the 12-month period priori to your rental contract’s expiration.

In what is good news for renters, and not so good news for landlords hoping to rake in some extra dough, the applicable inflation rate is 0.39 per cent for October.

This inflation rate is calculated by the National Institute of Statistics and Census (INEC).

Recently approved reforms to the rental law also state that if inflation exceeds 10 percent, the annual rental increase may not exceed that amount, and the increase will be decided upon by the Housing Ministry.

Note that this law only applies to leases paid in Costa Rican colones, and that rental contracts in Costa Rica are valid for three years initially even if your contract stipulates a shorter period.

By way of example, under the inflation-tied increase if your monthly rent is currently 350,000 colones per month, and your lease is up for renewal, the applicable 0.39 percent increase would raise your rent to 351,365 colones.

When the proposal was introduced by Frente Amplio party legislators in 2013, Representative Gerardo Vargas Varela said in support of the changes, “Inflation in Costa Rica is low on average and wages also don’t increase in large proportions; then how is it possible that rents for housing can climb up to 15 percent?,” reported Costa Rica’s Spanish language daily La Nación.