Humanitarian law changes put renters in control and most evictions on hold

Published on August 18, 2020

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According to the latest population census carried out by the Ecuadorian Institute of Statistics and Censuses (INEC), approximately 2.7 million people live in rental properties throughout Ecuador. And like in any other country, the relationship between owners and tenants becomes tense when there are defaults in payments or damage to infrastructure. That is why it is important to know what the rights and obligations of those who rent homes or commercial premises are. In Ecuador, the Tenancy Law establishes the regulations to be followed. However, the COVID-19 pandemic has changed much of what where the “bedrocks” of that landlord-tenant relationship. And now, renters have the power that they often felt landlords held. The changes this past June to the Organic Law of Humanitarian Support, have essentially removed the majority of rights that had been granted to landlords and left renters with very little restrictions on their activities.

The Tenancy Law

Before getting into the changes brought in with the revision to the Organic Law of Humanitarian Support, it’s important to review exactly what the law said prior to the COVID-19 pandemic. Landlord responsibilities First off, there are certain rights that the landlord must provide. For example,

  • The premise that is rented must have “complete and permanent toilet services, even one for each floor of the house, according to the modalities of the place.” In other words, if there are two or more independent apartments, each one must have at least one bathroom.
  • Drinking water and electricity services must be permanent and the facilities must be disinfected.

All this must be offered by the landlord.In the event that the property owner does not do so, a judge can force them to do so under a deadline for completion. After this period, if the requirements have not been met, the tenant may assume them and then deduct the value of the rent, with a 10% surcharge. If due to this situation, the renter is forced to leave the premises, the lessor must compensate with the equivalent of three months of rent. Tenant obligations Among the main tenant obligations established by the Tenancy Law is to cover the cost for any damages for which it was responsible, including drinking water and electricity installations. If not, the owner can make the repairs and demand—via judicial authorization—a repayment of the expenses with a 10% surcharge. Rental rate The Tenancy Law also establishes that the monthly rental value will not exceed one twelfth of 10% of the commercial appraisal of the property, a price that is found in the Municipal Cadastre. For example, if a condominium is valued at $50,000, a landlord can ask for ten percent of that ($5,000) divided by twelve (the months of the year), which is about $ 417. That would be the maximum amount the landlord could charge for rent per month. The actual language in the Tenancy Law is: “To determine the total price, all the apartments, parts or premises of the property will be taken into account, including those occupied by the landlord. When only part of the property is rented, the pension will be set proportionally to said part”, establishes article 17 of the regulations. The Lease Contrary to popular belief, leases can be done verbally or in writing, as mentioned in article 27 of the law. The term will be established by both parties, but the lessor will have the right to stay at least two years, except in the accommodation of hotels, boarding houses or inns; and when it comes to “individuals or families who, having their habitual residence in one place, go to others temporarily.” Breaking the Lease There are eight clauses in the Tenancy Law that allow the landlord to evict a tenant (prior to the suspension of all but two of them by the Organic Law of Humanitarian Support). Those eight reasons were:

  1. If there is non-payment of rent for two consecutive months, which is then followed by a tenancy summons to appear in court.
  2. If there is danger of destruction or ruin of the building that requires repair.
  3. If the tenant causes fights or riots.
  4. If the tenant uses the property for a different reason than for what was rented, including illegal activities.
  5. If the tenant causes damages to the property and/or its facilities in accordance with the provisions of Art. 7 of the Tenancy Law.
    • – Responsibilities of the tenant: If the tenant is responsible for the damages caused in the leased premises, or in the drinking water, electricity and toilet facilities, he will be obliged to immediately repair it, at his own expense. Failure to do so within the term set by a Judge give the landlord the option to carry out said repairs and require the tenant to pay the amount invested, with a surcharge of ten percent, or to demand the termination of the contract.
  6. If the tenant subleases or transfers their rights to use the property without having written
  7. If the tenant does work on the leased premises that has not been authorized by the lessor.
  8. If the lessor plans to demolish the premises for new construction. In this case, the tenant must be legally summoned with the eviction request, at least three months in advance.

Once a tenant receives a legal eviction notice they have 30 days to vacate, as long as they pay all outstanding amounts. In addition, the lessor who does not wish to renew the contract must notify the tenant 90 days in advance of the expiration date of the agreement. Otherwise, it will be considered to be renewed for one year (and only once). Finally, if a tenant occupies a property continuously for 15 years or more, they will have the first option to buy in the event that the owner decides to sell it of his own free will.

What changed with the revised Humanitarian Law?

All of the above guidelines are what were in force prior to the current country-wide health emergency was declared. Things have changed significantly since then. With the approval of the Organic Law of Humanitarian Support to combat the health crisis derived from COVID-19, tenants are now protected from eviction for the duration of the current state of exception, and up to sixty days after its conclusion. With Executive Decree 1074 in June, tenants became protected from eviction until October 16, 2020. Since then, the state of emergency decreed by President Lenin Moreno was extended again on August 14, 2020; the protection measure against eviction that was under that Decree has now been extended until the 15th of November. The Decree starts: Temporary suspension of eviction in the matter of tenancy.- During the period of validity of the state of emergency, and up to sixty days after its conclusion, evictions of tenants of real estate cannot be executed, for any of the causes established in the Law of Tenancy,Article 4 – Organic Law of Humanitarian Support Two exclusions to the Decree While the Decree states that no renter can be evicted during the state of emergency (and for 60 days afterward), there are in fact two exclusions to that. There are also some requirements that renters must fulfill to be protected by the Decree. The only two grounds for termination of the lease established in Article 30 of the Tenancy Law that remain in force—even during the state of emergency—are sections “b.” an “d.”

  1. If there is danger of destruction or ruin of the building that requires repair.
  2. If the tenant uses the property for a different reason than for what was rented, including illegal activities.

For either of these two reasons, a landlord can still move forward with eviction proceedings. Minimum payment and agreements The Humanitarian Law also specifies that in order for tenants to be eligible for this temporary suspension of grounds for eviction, they must pay at least 20% of the value of any pending fees. In the case of commercial premises, the lessee must also demonstrate that their income has been affected by at least 30%, compared to February 2020. The temporary suspension of eviction may be extended in the event that the tenant and the lessor agree in writing on a payment plan on the amounts owed. Also, the suspension established by law does not imply cancellation of any type of obligations, unless the tenant and the landlord reach an agreement. Priority groups In cases where the landlord belongs to a priority care group, and the rental fee is their means of subsistence, the temporary suspension of the payment of rental fees will not apply, unless the tenant also belongs to a priority care group; in this case the parties will be required to reach an agreement amongst themselves before bringing any cause before a judge.

Mediation for rentals

The Public Defender’s Office of Ecuador offers a free mediation service in the event of evictions, return of guarantees, breach of contracts and termination of contracts. To start the process, you must come with copies of an identity card, the rental contract, receipts, direction of the property and any other document that proves the existence of a formal agreement between a lessor and a lessee. In addition, counseling is offered to people who, due to their economic, social or cultural condition, cannot access a lawyer. You can go to mediation for the following topics:

  • Non-payment of fees by tenants
  • Suspension of basic water and electricity services by the landlord
  • Failure to return the guarantee from the landlord to the tenant
  • Overcharging of fees by the lessor
  • Having vacated the leased premises but said space has been padlocked
  • For destruction of the leased premises by the tenant
  • When the lessor does not want to receive the lease values ​​from the lessee
  • By eviction (notification made by the landlord or tenant with their decision not to continue occupying the leased premises).

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