Before You Sign Anything in Costa Rica: What Every Senior Expat Should Know

A friend of mine — a retired teacher from Oregon who moved to Guanacaste a few years back — once told me she had signed a lease without reading it because the landlord seemed like such a nice person and the house was exactly what she wanted.

Three months later, she discovered the lease had a clause allowing the landlord to enter the property without notice for "inspections." She also discovered that her security deposit covered only damages and not the last month of rent — the opposite of what she had assumed. And she had agreed to pay HOA fees on top of the rent, a detail buried in a paragraph she had skimmed past.

None of this made her landlord a criminal. But it made her first year harder than it needed to be.

This is the story behind most contract problems in Costa Rica. Not fraud, not bad faith — just assumptions that turned out to be wrong because nobody sat down and read the document carefully before signing it.

Why Contracts Work Differently Here

Costa Rica has a well-developed legal system and strong consumer protections in many areas. But contracts operate within a legal culture that is different from what most North Americans and Europeans are used to, and those differences matter.

The first thing to understand: Costa Rica recognizes both verbal and written agreements. According to attorneys who practice rental and contract law here, verbal contracts are legally valid but extremely difficult to enforce because proving what was agreed requires witnesses, documentation, or other evidence. Written contracts are always better. Always.

The second thing: Costa Rica's contract law tends to favor the party with less power in the relationship — which in rental agreements is the tenant, and in service contracts is the client. This is good news for you as an expat consumer. But it only helps you if you know what rights you have and how to document that they were respected.

The third thing: many disputes in Costa Rica — including contract disputes — go to mediation before the courts, and Costa Rica encourages this approach. The process can be faster and less expensive than litigation, but it still requires documentation of what was agreed and what was not honored.

Before You Sign a Lease

Residential lease law in Costa Rica is governed by Law 7527, the General Law of Urban and Suburban Leases, in effect since 1995. A few things in this law will surprise you if you are not expecting them.

• The minimum lease term is three years. This is a provision of public policy — which means it applies even if the contract says otherwise. If a landlord offers you a one-year lease and you want to stay longer, the law gives you the right to remain for up to three years as long as you fulfill your obligations. This protects tenants, but it also means you need to think carefully before signing: you are likely committing to a three-year relationship, even if the contract reads otherwise.

• Rent denominated in dollars cannot be increased during the contract term. This is significant. If you negotiate your rent in USD, your landlord cannot raise it until the contract renews. If rent is in colones, it can be adjusted annually based on accumulated inflation as measured by the National Institute of Statistics and Census (INEC), with a cap at 10% unless the Ministry of Housing authorizes more.

• You have a seven-day grace period for rent payments by law. If your rent is due on the first, you can legally pay any time before the eighth without being in breach. This is set by law and cannot be removed by a contract clause.

• The security deposit — typically one month's rent — covers damages, not the last month of rent. This is where many tenants make a costly mistake. Do not plan to skip your last month's payment expecting the deposit to cover it. The contract should specify exactly what the deposit covers and under what conditions it is returned, and how long the landlord has to return it after you vacate.

• If you want to leave before the three years are up, you must give three months' notice. Not one month — three. This is set by law. If you leave without proper notice, the landlord can collect rent for those months.

• Before signing, make sure the contract specifies: who pays HOA fees if the property is in a condominium, who pays utilities (by default the tenant pays most utilities; the landlord pays the base water rate unless the contract states otherwise), what constitutes authorized modifications, and whether pets are permitted and on what terms.

Before You Sign a Service Agreement

Service contracts in Costa Rica — for maintenance, cleaning, home care, healthcare, transportation, or any ongoing service — are less regulated than residential leases but no less important to read carefully.

A few things that should always be in writing before any service begins:

• Scope of work. What exactly is included? What is explicitly excluded? A contract that says "housekeeping services" without specifying frequency, tasks, and hours is a contract waiting to become a disagreement.

• Payment terms. How much, when, and how. If you are paying by bank transfer, the account details should be in the contract. If there are late payment terms or early termination fees, they need to be written, not assumed.

• What happens when something goes wrong. If a contractor damages something in your home, what is the correction process? If a caregiver misses a scheduled visit, what is the protocol? A service provider who resists putting this in writing is telling you something important.

• Termination notice. How much notice does either party need to give to end the relationship? Without this, you may find yourself in a dispute about whether you owe payment for services after you stopped requesting them.

• Labor law implications. This one surprises many expats. In Costa Rica, if you hire someone on a consistent schedule — even informally — they may acquire labor rights, including social security contributions, vacation pay, and a mandatory year-end bonus called aguinaldo. This applies to housekeepers, caregivers, drivers, and gardeners. The arrangement does not need to be called an employment contract for labor law to apply. It is always worth consulting a local attorney before establishing any ongoing domestic service relationship.

Before You Sign Anything Medical

Healthcare contracts in Costa Rica are less common than in North America — private care is typically fee-for-service rather than subscription — but you will still encounter agreements when you enroll in a health insurance plan, join a health discount program, or engage with a private clinic for ongoing care.

Key things to verify before committing:

• What is the network? Private insurance plans in Costa Rica vary significantly in which hospitals and specialists they cover. A plan that covers Hospital CIMA in San José may not cover the clinic in Liberia. If you are based in Guanacaste, verify that your plan covers providers in your region, not just in the Central Valley.

• What is the claims process? Some plans require pre-authorization for specialist visits or procedures. Understanding this before you need emergency care matters more than understanding it after.

• Does coverage extend outside Costa Rica? Local plans typically do not. International plans from providers like Cigna Global or Allianz do. If you travel regularly or want coverage in your home country, that distinction is critical.

The Documents You Should Always Have Before Signing

Regardless of the type of contract, there are a few documents you should request and verify before putting your signature anywhere:

• The cedula or cedula jurídica (national ID or corporate ID) of the person or company you are contracting with.

• Proof of professional registration if the service requires it — attorneys, doctors, engineers, notaries.

• A written quote or scope of work that matches what the contract says.

• Contact information for at least two references you can verify.

If any of these are unavailable or difficult to produce, that is your signal to slow down.

One More Thing About Language

Costa Rica's official language is Spanish, and contracts written in Spanish are the legal standard. An English translation is a courtesy — it is not the governing document. If a contract is written in Spanish and you do not read Spanish fluently, you need either a bilingual attorney to review it or a certified translation before you sign.

This is not a formality. It is protection. The clause that creates problems is almost always the one nobody translated.

This is one of the most practical reasons senior expats in Guanacaste benefit from having a bilingual local contact — not just for day-to-day logistics, but for moments like these, when a document in front of you determines the next three years of your life.

If you are navigating this kind of process and want support, our Senior Living in Costa Rica page explains how we help. You can also explore the specifics of our Healthcare Navigation service or reach us directly through our contact page.

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Teresita Alfaro — Founder, Expat Senior Concierge

Teresita is a bilingual life manager and personal advocate for expat seniors in Costa Rica. For over a decade she has been "the person in the room" — navigating healthcare and the CCSS, coordinating trusted local providers, handling paperwork, and caring for private homes — so seniors can live here safely and independently, and their families abroad can finally stop worrying.

📅 Book a free 30-minute consultation · 📱 WhatsApp: +506 7075-5307