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Rental laws are pro-tenant in Honduras

July 12, 2007

The Tenancy Law in Honduras is VERY PRO-LESSEE.

Honduras oceanview houses

However, the Global Property Guide thinks that the Honduran Tenancy Law is not very pro-lessee. It appears to be neutral, or at least pro-tenant. One of the reasons is, in relation to other countries, it takes less time for the landlord to evict the tenant in the property.

The relation between the Lessor and the Lessee are considered under Honduran Law relations of public policy. Under Honduran Law, Lessor and Lessee can freely determine the terms and conditions of their "Leasing Agreement", provided however, that the there are some terms and conditions which cannot be modified by agreement of parties, for example, a Lessee under Honduran Law has the right to terminate any lease agreement with prior written notice of eviction or Termination of Leasing Agreement of sixty (60) days and the rights of the Lessee under the Law cannot be renounce, unlike the rights of the Lessor which can be renounce. We must say the eviction procedure and collection of unpaid rent can take long in our legal system.

According to the Law, all Leasing Agreements must be executed in writing and when the Agreement is not done in public deed (which is registered in the Registry of Property), then it must be executed in three (3) identical copies, one for the Lessor, one for the Lessee and one has to be registered in the Administrative Department of Lessee Issues.

Rents: Can landlord and tenant freely agree rents in Honduras?

According to Tenancy Law, all terms and conditions of an Agreement are set freely by the parties as long they are not contrary to the Law and Order. The initial rents, as well as the increases, are set freely by the parties as long as the Value of the Property exceeds an amount of US$2,000. If the Value of the leased property is below such amount, we have a Rent Tribunal that is the Administrative Department of Lease Issues and they have certain rules and procedures for the regulation of rents for such properties.

Deposits

The deposits are determined by the will of the parties. Neither the Tenancy Law, nor the Civil Code, requires a deposit in a Leasing Agreement, however, it is a custom to establish a deposit equal to one or two months of Rent.

Honduras luxury apartmentsWhat rights do landlords and tenants have in Honduras, especially as to duration of contract, and eviction?

All Leasing Agreements can be set for a time-delimited term or an indefinite term. The main difference between these two types of Agreements is the fact that in the Agreements with a time-delimited term, eviction is not necessary because when the term comes to an end so does the Agreement.

In the indefinite term Agreements, eviction is necessary, and it is determined by the way payments of rents are done. For example, if rents are paid weekly, then the eviction should be done with one week in advance, or if rents are paid monthly, then the eviction should be done with one month in advance.

As previously stated, the Tenancy Law states that every Lessee is entitled to terminate the Leasing Agreement by providing a written notice to the Lessor with prior written notice of eviction or Termination of Leasing Agreement of sixty (60) days.

How effective is the Honduran legal system?

In Honduras we have two legal institutions in charge of enforcing the Tenancy Law and the Civil Code:

  1. Tenancy Tribunal: All the lawsuits of termination of Agreements (eviction lawsuits) are submitted to this tribunal.
  2. Administrative Department of Lessee Issues: All the issues that are not known by the Tenancy Tribunal are resolved in this department.

When we submit a lawsuit of eviction to the tribunal in the case of unpaid rent or failure to comply with any of the terms and conditions in the Leasing Agreement, the Lessee can at any time (before the eviction sentence) put an end to the procedure initiated by the Lessor by paying the amount owed at that particular time plus the cost of the trial. The foregoing right is only granted to the Lessee that has been sued for payment default for the first time with respect to the same Leasing Agreement.

After the sentence of eviction has been pronounce, the Lessee must be notified of the resolution and is given fifteen (15) to thirty (30) days to leave the property.

The time period to resolve a lawsuit of eviction in the Tenancy Tribunal is unpredictable due to the poor effectiveness of our legal system and all the legal resources that are available to the other party in order to delay the trial.

The issues between Lessor's and Lessee's are regulated by the following laws:

  1. Tenancy Law: Decree number 50-1966, September 6th 1966
  2. Civil Code: 1906

Legislation

Honduras hillside real estate for saleAs mentioned, the rights of the Lessee's under the Tenancy Law cannot be renounced, and any term or condition stated in a Leasing Agreement which restricts, diminishes or suppresses such rights, are null, unlike the rights of the Lessor which can be renounced, diminished, or suppressed.

The Tenancy Law covers all leases related to the occupancy of urban or suburban housing and establishments destine to private, industrial, professional or commercial purposes. The Leasing Agreements related to other land or establishments (other than the ones mentioned before) are regulated by our Civil Code which at the same times acts as secondary law for all those situations that are not contemplated under the Tenancy Law.

The Civil Code establishes general obligations and rights of both the Lessor and the Lessee which come as an addition to those established in the Tenancy Law. Among the obligations of the Lessees established in our Civil Code, we found the following:

  1. To pay the agreed price in the forms convened.
  2. To use the leased property for the specific purposes agreed in the terms of the Agreement.
  3. To take care of the leased property as a good parent will care of his children.
  4. To assume the cost and carry out all local repairs to the leased property including walls, roofs, windows, doors, locks for the purpose of maintaining them in good use.
  5. To return the leased property in the same condition as it was given. According to our Civil Code, it is understood that the property was received in good condition.
  6. Not to sub-lease the Leased property without the prior written consent of the Lessor.

Among the obligations of the Lessor's established in our Civil Code, we found the following:

  1. To give the leased property to the Lessee and maintain it in the necessary condition for the purpose that it was leased.

A Leasing Agreements terminate for the same reasons as the other Agreements permitted by the Law terminate, but, especially for the following reasons:

  1. Due to total destruction of the property leased.
  2. Due to the expiration of the period for which it was leased.
  3. Due to the loss of the Lessor's right over the leased property.
  4. Due to a resolution by judge in the cases our Law determines.

Brief History: Recent changes in Honduran landlord and tenant law

Since 1906, our Civil Code enforce the aspect of tenancy in general terms and it wasn't until 1966 that our Congress enacted the Tenancy Law under which Honduras encouraged and recognized private property and declared of public interest all leasing of property located in urban or sub urban areas.

Market Practice

Since foreign ownership is limited in Honduras, rentals of properties such as condominiums have become common practice. Condominium and home owners association have extensive guidelines to bring to clients peace of mind ownership derived from the membership from the association. Normally, fees such as maintenance, security, and insurance for fire, lightning, earthquake, hurricane, explosion, malicious damage and riot are individually charged by the association. Utilities such as telephone, metered electricity, television services and cable installation are part of individual's additional costs.

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