A very important topic recurring question in many of the queries I receive is what should or should not/can or cannot be in a lease: The contract: The first thing to keep in mind, after visiting the property and agreeing to take it and accepting its price, is "the contract.” This is a consensual contract and not an adhesion contract. This means that it is the will of both parties which gives rise to the convention that is technically called "Lease Agreement." The conditions expressed in said agreement must be consented to and agreed upon by both parties, both landlord and tenant.
In turn, this type of contract is not in any way a contract of adhesion as occurs with contracts for the provision of telephone services, where the client who hires only adheres and accepts what is offered by the provider. In the lease contract each clause must be looked at and agreed upon so that it is fair and just for both parties, landlord and tenant. As is well known, biased contracts abound, with clauses contrary to the law, with manifest inequities and abusive and capricious clauses that only benefit one party, that party being the landlord and the realtor or administrator. A few examples of biased contract clauses include trash collection (derechos de aseo), territorial tax (contribuciones), judicial and extra judicial payment collection fees, agreement termination (término del contrato), among others.
Rental contracts should always be reviewed as far beforehand as possible, to make corrections, amendments, adjustments and leave time for a thorough review that results in a fair and balanced contract that corresponds to what is being leased.
Always read and review the contract in its entirety, ideally with someone who understands all the words used in the contract.
If you have read through the contract and questions or concerns arise, ask the landlord or realtor to clarify them. Unfortunately, more often than not, the answers and clarifications provided by the landlord or realtor will not be impartial and may still leave you with concerns. If you are unsure about the document you are signing and the clauses contained in that document, it is best to consult someone who can give you impartial advice and at Legal Access Chile we specialize in helping with this and we are here to provide that advice for you and also suggest any changes to the agreement that would be in your best interest.
Important Tips and Recommendations When Leasing in Chile:
Always pay the security deposit (mes de garantía) and the rent by electronic bank transfer or by check. Never in cash. (Payments made in cash cannot be traced and there is no way to prove they were ever made.) As a last resort, if you do not have a bank account in Chile you can still request that the landlord or realtor give you a bank account where you can deposit the money and you can then take the cash to their bank and request it be deposited into their account, keeping the receipt as proof of deposit. You then send the receipt of deposit to the landlord or realtor by email and ask them to respond to the email in writing confirming the receipt of the funds into their account.
Always take photographs of the property both at the time you receive the property and the time you return the property. Send these photographs to the landlord or realtor by email and ask in that email that the landlord or realtor reply to the email confirming the state of the property as shown in the photos upon receiving and returning the property.
Do not accept for any reason a handwritten or amended property inventory list. The list must always be typed and must contain everything that exists inside the property upon receiving the property from the landlord or realtor.
The first clause of the contract must always indicate how the owner acquired the property, the role number of the same, the date on which he or she acquired the property. It is very important to verify the landlords position as owner of the property. There have been repeated cases of people who rent out properties not being the real owners of the property and that can be both complex and problematic for renters.
Rent Collection Expenses: Some landlords use premade contracts provided by the notaries and these lease contracts often contain a clause that establishes that the lessee must pay for all the collection expenses of the amounts owed for non-payment of rent (when renters do not pay for several months realtors often hire collections agencies and lawyers to collect the money from the renter and they place a clause in the contract that it is the responsibility of the renter to pay those expenses). This type of clauses is totally abusive and must always be eliminated for the benefit of the renter.
Rent Increase: To facilitate transparency, a clause must always be included in the contract in which the landlord agrees to send the source from which he obtains the information used to arrive at the calculation of the rent increase. Where possible, it should be indicated that such information must be shared with the lessee, as well as including the formula used to arrive at the amount of the increase.
If a property is leased in a community or building: a clause must always be included stating that the landlord will not pay under any circumstances the expenses imposed by the administration of the building for the improvement of common areas, since they must always be paid by the owner, because they are his responsibility and cede to the benefit of the property, so passing that burden on to the tenant is unfair and abusive.
Property Taxes: A clause must be included that always indicates that the tenant is excluded under any circumstances from paying property taxes (territorial tax). I have seen numerous lease contracts with an abusive clause that requires the tenant to give notice of the arrival of the collection of property taxes within 3 days, also indicating that failure to notice such circumstance, will oblige the tenant to take charge of contributions, paying said amounts out of their own pockets. Such a declaration in the lease is absolutely illegal.
Maintenance: Regarding the maintenance of the property, it is undoubtedly the responsibility of the tenant, however it is always wise to include the phrase “El arrendatario deberá restituir la propiedad en el estado en que le fue entregada, tomándose en consideración el deterioro ocasionado por el uso y goce legítimos. habida consideración del desgaste por el uso natural de la propiedad misma” (“The tenant must return the property in the state in which it was delivered, taking into consideration the deterioration caused by the use and enjoy legitimate. Considering wear and tear due to the natural use of the property itself ").
Repairs: The tenant is obliged to certain simple repairs. Simple repairs are understood to be the responsibility of the tenants and in general are produced by deterioration that is caused by the tenant or his dependents, such as holes in walls, doors, windows, and minor incidents of ordinary occurrence such as faucet adjustments, maintenance of the same, paints, furniture, veneers, glass breakage, etc. If the repair is due to a larger issue, requiring heavy labor, like fractures in the concrete resulting in flooding, gas leaks, permanent short circuit, defective heating, etc. It will always be the responsibility of the owner or lessor.
Safety Deposit (Depósito en Garantía): a topic that worries tenants a lot and that sometimes transforms into unwanted problems and even into a lost cause for many is the safety deposit. One strategy that has proven quite reliable is the following: the lessee or the guarantor or co-debtor, either of the two, but not jointly, grant as collateral a check for the amount required for such deposit, stipulating in the contract that said document is kept in custody by the lessor, which cannot be deposited unless the following hypotheses are verified: a) one or more missed rental payments after the time the rental contract was signed, b) missed payments of basic expenses and building or community fees in one or more periods if applicable, and c) repairs that must be made, as agreed upon by tenant and landlord after the state of the property upon return has been verified (a detailed list of what must be repaired will be drawn up and will include the signatures and prints of both parties).
What Now: What happens if you go back and read over your rental agreement that you have already signed and find out that it contains biased or abusive clauses? The first thing you can do is ask the landlord for amendments, signed at the notary in the form of an annex (un anexo al contrato). The landlord may tell you, “No, the lease agreement cannot be modified,” which is false. In the same way that the lease was created and agreed upon, the notary allows the parties to create an annex and incorporate it as part of the original lease. However, you may find some resistance here that could lead to the landlord putting an end to the contract. If this happens to you, you should contact us at Legal Access Chile for assistance in the matter.
Finally, it is necessary to say that although often the communications between both parties at the end of the contract period may be distant, as relationships can wear out in time, it is still the responsibility of the tenant to comply with the contract and the agreements made therein.
Legal Access Chile is here to help you each step of the way. We are here to review contracts with you before you sign to ensure that there are no abusive clauses in your contracts. We are also here to review contracts once you have signed and contact landlords and realtors on your behalf to request an annex to the contract. If you experience any problems with your landlord or realtor, if you have unresolved disputes, if you feel you are being taken advantage of, or if you plan to rent or are currently renting a property and need assistance in creating the contract and/or dealing with renters, contact us at Legal Access Chile and we can help.