Investing in residential property abroad can lead to serious issues if you overlook the local landlord–tenant laws and rental practices. Our coverage focuses specifically on the legal framework surrounding long-term residential rental agreements.
The Global Property Guide's landlord and tenant rating system
We use a three-point rating system to evaluate a country:
- Pro-Tenant
- Neutral
- Pro-Landlord
For the past 20 years, Global Property Guide has used a five-point rating system. However, as legislation evolves globally, laws governing landlord–tenant relations very rarely fall at the extreme ends of the spectrum.
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LANDLORD AND TENANT Q & A
What is the Global Property Guide's standard for neutrality?
Neutral' reflects a slight asymmetry in the law. In modern legal systems, it’s generally accepted that tenants should receive a basic level of security of tenure. We define 'neutral' as the point where the law leans just slightly in favor of the tenant—what is now widely considered the norm.
Can you give an example of what you define as neutral?
A situation where the tenant can leave at three months' notice, but the landlord must wait to the end of the contract, is considered neutral between landlord and tenant, assuming
- There is freedom to negotiate rent levels; and
- There is no right for the tenant to stay at the end of the contract.
What do you define as pro-tenant?
A pro-tenant legal system is one that prioritizes the rights and protections of tenants. It typically makes eviction more difficult for landlords, requires longer notice periods, limits rent increases, and ensures tenants have security of tenure. Disputes in rent commissions or courts often take a long time and tend to favor tenants more. Such laws aim to provide housing stability and safeguard tenants from sudden displacement or unfair treatment.
What do you define as pro-landlord?
A pro-landlord legal system is one that generally favors the property owner’s rights over those of the tenant. This means landlords can often evict tenants more easily, require shorter notice periods, and face fewer restrictions on rent increases or lease renewals. Such systems usually offer landlords greater control and fewer regulations, though tenants still have some protections.
How we judge landlord and tenant relationships?
We look at the following factors to arrive at a judgment about the overall relationship:
Rents
- Can rents be set freely by agreement between landlord and tenant?
- Can subsequent rent adjustments be freely negotiated?
- Can the rent be indexed to the cost-of-living or some other index? If so, what mechanism can be written into the contract?
- If there is rent control, what are the provisions? What are the criteria used to determine rents?
Deposits
- Is the landlord allowed to collect security deposits? How about rental deposits (advance payment)?
- Are there legal limits on the amount of deposit that can be collected?
- Should the landlord keep the deposit in an interest-bearing account?
- If there are no legal limits, what is the usual practice?
Duration of contract/Eviction
- Are contracts required to be for any specified periods?
- Is notice necessary for eviction at the end of a contract?
- Is there a fundamental difference between fixed-term contracts and contracts of indefinite duration?
- Can either landlord or tenant terminate before the end of a contract period?
- What are the penalties for early termination of contracts?
- What is the procedure for tenant eviction?
The effectiveness of the legal system
- Does the court system work?
- Is Alternative Dispute Resolution (ADR) available for landlord-tenant disputes?
- How long does it take to evict a tenant for non-payment of rent (assuming that the landlord is in the right)?
Legislation
- What laws cover Landlord and Tenant issues?
History
- Short overview of the past legislation in any given country.
