Frequently Asked Questions Before Leasing

If for any reason you have no choice but to rent a house or apartment, you must first inform yourself about how to proceed wisely. Although it’s not a complicated process, it’s necessary to be clear about several fundamental aspects related to your obligations and those of the owner.

Now, what are the requirements to lease a property?

For both Chilean nationals and foreigners with legal status, the documents required do not vary much and depend on the conditions of the lessor. Usually, they are as follows:  

• Identity Card (both sides), passport or RUT
• Work contract
• Last 3 salary settlements
• AFP quotes (the most recent 12)
• Any guarantee that justifies the above or a co-debtor

How much should the rental fee be?

According to Law 18.101, the value of the annual income should not exceed 11% of the total assessment tax of the property. As for its change, this condition must be stipulated in the contract; both parties agree to the increase every 6 or 12 months.  

What payment methods can I use?

Depending on the mutual agreement, you can pay in several ways. By cheque, transfer and cash are among the most common. There are also instances in which you can pay in advance for the duration of the contract.

What is the warranty and how to recover it?

The warranty is a type of deposit established by the owner in the contract. This is to ensure that the property is leased in the correct conditions. It can range from 1 to 3 months of rent but cannot be used to pay the monthly payment; it’s renewed once the lease is finished. Both parties set the return date according to the conditions that were set.  

Is there any kind of commission for processing?

Depending on the circumstances, there is usually a 50% commission for the first month of a lease (plus VAT), to process the documentation.

What happens when a fault or damage occurs?

In the case of damage inside the home, the owner must take care of the corresponding repairs. This also involves damage related to dampness, seepages, pipes and more.

What are the types of contract that exist?

At the time of leasing an apartment, a house or land, the agreements consider these 2 factors to stipulate the lease term, which are:

• Fixed Term Contract (1 year)
  It is renewable and is the most used)
• Indefinite or month by month contracts 

Can I terminate the contract in advance?

Depending on the type of contract established by the lessor and lessee, there are several instances to terminate the agreement early. In case it is not stated in the lease agreement, you will have to resort to the provisions of the law. We can summarize the usual conditions as follows:  

• The owner may not dispose of the property for family reasons until the agreed deadline is met.
• For indefinite agreements, a notary notification is required. From the same, the tenant has 2 months notice for each year of lease to return the property. This cannot exceed 6 months and you must pay until you return the property.
• The request for restitution for one-year terms also requires a notification with 2 months to comply.
• Contracts usually prohibit sublease.

What can cause the termination of the contract? 

There are several situations that may terminate the lease. The most common are: compliance with the deadline, early termination for eviction (court ruling), violation of the clauses established in the agreement, non-payment of income or even the destruction of property due to a major cause. It is important to clarify that in the case of a natural catastrophe, the lessee is free from compensation to the owner. The most advisable thing would be to sign an agreed settlement terminating the contract and any pending obligations.

Although there can be many doubts when leasing a property, we hope that these frequently asked questions can help you the next time go through this process.

Disclaimer:
Translated from ‘Preguntas frecuentes antes de arrendar‘