Deposits, Guarantors, and Advance Payments in Bolivian Rentals

Renting a property in Bolivia involves financial arrangements beyond monthly rent, such as security deposits, advance payments, and guarantors. This guide, tailored for expats, clarifies these common practices based on Bolivian law and usage, offering insights into tenant rights and landlord expectations.

When renting a property in Bolivia, whether for residential or commercial purposes, you will likely encounter financial requirements beyond the monthly rent. These typically include security deposits, advance rent payments, and sometimes the need for a guarantor. These mechanisms are designed to protect the landlord against potential damages or unpaid rent, while for tenants, they represent an upfront cost of securing a dwelling.

Understanding Bolivian Rental Law

The Ley del Inquilinato (Tenant Law) of 1959, though dated, remains a foundational piece of legislation. It defines a rental agreement as a special contract where a property owner grants possession and use of a property for a certain fee and an indefinite term . This contract can be verbal or written, with rent payment receipts serving as proof for verbal agreements .

The Ley del Inquilinato outlines specific reasons for eviction, known as 'desahucio.' These include non-payment of three months' rent, the landlord's need to occupy the property, the need for major reconstruction, or if the tenant sublets the property or owns another home . Importantly, eviction for non-payment can be avoided by paying the outstanding rent, provided a first-instance court ruling has not yet been issued and there's no history of repeat offenses .

If an eviction ruling is finalized, tenants are granted specific periods to vacate: 30 days for a room or dwelling, 60 days for an apartment, and 90 days for an entire property .

The Civil Procedure Code (Código Procesal Civil), Ley N° 439, addresses eviction for properties under free contract. It distinguishes between non-residential properties, for which a specific process is used, and housing, for which an extraordinary procedure is employed .

Practical Aspects of Deposits and Advance Payments

While Bolivian law does not explicitly detail the amounts or specific regulations for security deposits or advance payments, these are standard components of rental agreements in practice. Landlords commonly request:

Security Deposit (Garantía): This is typically equivalent to one or two months' rent. Its purpose is to cover potential damages to the property beyond normal wear and tear, or unpaid utility bills. The deposit is usually refunded at the end of the lease term, provided the property is returned in good condition and all bills are settled.
Advance Rent Payment: It is common for landlords to ask for one or two months' rent in advance. This payment is applied to the first months of your tenancy.

These terms are usually negotiated directly between the landlord and the tenant and should be clearly stated in the written rental contract.

The Role of a Guarantor (Aval or Fiador)

A guarantor, often referred to as an 'aval' or 'fiador,' may be required by some landlords, especially if the tenant is new to the country or has no established credit history in Bolivia. The guarantor is a third party who legally commits to fulfilling the tenant's obligations under the lease, including paying rent or covering damages, if the tenant fails to do so.

Typically, a guarantor must be a Bolivian resident with stable income. .

Documents and Steps in a Rental Agreement

Property Search and Viewing: Identify properties that meet your needs and budget.
Negotiation: Discuss terms with the landlord, including rent amount, lease duration, deposit, and advance payments.
Contract Drafting: A written rental agreement (contrato de alquiler) should be drafted. This contract should clearly outline:

Names and identification of landlord and tenant.
Property address and description.
Rent amount and payment schedule.
Lease duration.
Amount of security deposit and advance payments.
Conditions for deposit return.
Responsibilities for maintenance and repairs.
Conditions for termination and eviction.
.

Signing the Contract: Both parties sign the agreement. It's advisable to have a witness.
Payment: Make the agreed-upon payments for deposit and advance rent. Ensure you receive official receipts for all transactions.
Property Handover: Conduct a thorough inspection of the property with the landlord before moving in. Document any existing damages or issues in writing, ideally with photographic evidence, and have the landlord acknowledge this list.

Common Mistakes and Risks

Verbal Agreements: While legally possible, verbal agreements lack clear terms and are difficult to enforce, leading to potential disputes . Always aim for a written contract.
Unclear Contract Terms: Ambiguities regarding responsibilities, deposit return, or termination clauses can lead to conflict.
Paying Without Receipts: Always obtain official receipts for all payments made (rent, deposit, advance payments). This is crucial proof of payment .
Ignoring Property Condition: Failing to document the property's condition at the start of the lease can result in unfair deductions from your security deposit.
Illegal Eviction Practices: Landlords cannot resort to 'vías de hecho' (taking the law into their own hands) to evict tenants; they must follow legal procedures .
Deposit Retention: Landlords may unfairly withhold the security deposit. Understand the conditions under which deductions are permissible.

When to Get a Lawyer

While many rental transactions can be straightforward, seeking legal counsel is advisable in several situations:

Complex Contracts: If the rental contract is lengthy, contains unusual clauses, or you don't fully understand its implications.
Disputes: If disagreements arise with the landlord regarding rent, repairs, deposit return, or eviction.
Eviction Proceedings: If you are facing eviction or need to initiate eviction proceedings.
Guarantor Obligations: If you are acting as a guarantor or need to understand the responsibilities involved.
High-Value Rentals: For significant investments, ensuring the contract is robust is essential.

A lawyer specializing in Bolivian property law can help you navigate these complexities, protect your rights, and ensure compliance with local regulations.

Next steps

Always insist on a written rental agreement clearly detailing all financial terms and conditions.
Keep meticulous records of all payments made, obtaining official receipts for rent, deposits, and any other fees.
Thoroughly inspect the property at the start of the lease and document any existing damages with photographic evidence.
Understand the conditions under which your security deposit can be withheld and ensure you meet them for a full refund.
If you are asked to be a guarantor, fully understand the legal implications and your financial responsibilities.
Consult with a local legal professional if you have any doubts or face disputes regarding your rental agreement.

FAQs

How much can a landlord charge for a security deposit in Bolivia?

Bolivian law does not specify a maximum amount for security deposits. However, in practice, it is commonly equivalent to one or two months' rent. This amount should be clearly stated in the written rental contract.

Can a landlord keep my security deposit if I break the lease early?

The conditions for withholding a security deposit are typically outlined in the rental contract. If you break the lease early without a valid reason agreed upon in the contract, the landlord may be entitled to deduct unpaid rent or costs associated with finding a new tenant, depending on the contract's terms.

What is the difference between a deposit and advance rent payment?

A security deposit (garantía) is held by the landlord to cover potential damages or unpaid bills at the end of the lease and is usually refundable. Advance rent payment is applied to your first months of rent and is not refundable as it pays for the occupancy during those periods.

Do I need a Bolivian bank account to pay rent?

While not strictly required by law, having a local bank account can simplify rent payments, especially if the landlord prefers bank transfers. Some landlords may accept cash payments, but this should be agreed upon in advance, and always ensure you get a receipt.

What happens to my rental deposit if the landlord sells the property?

The law guarantees the right to property and succession . If the property is sold, the new owner generally assumes the landlord's obligations, including the return of your security deposit under the terms of the original lease. This should be clarified in the sales agreement between the previous and new owner, and ideally communicated to the tenant.

Sources

inquilinato - https://www.lexivox.org/norms/BO-L-19591211.html
ley439 - https://tsj.bo/wp-content/uploads/2019/11/ley-439-nuevo-codigo-procesal-civil.pdf
tcp_vias_hecho - https://juristeca.com/bo/tcp/sentencias/2021/12/sentencia-constitucional-plurinacional-1049-2021-s4
cpe - http://www.gacetaoficialdebolivia.gob.bo/app/webroot/archivos/CONSTITUCION.pdf

Related guides

This article is general information for educational purposes and is not legal advice. Laws and procedures change; confirm current requirements with a licensed Bolivian lawyer or the responsible public agency before acting.