Lease Agreements in Ecuador: Legal Requirements for Formalization and Registration

In Ecuador, the lease agreement is a legal contract through which one person (the landlord) grants another (the tenant) the use of a real estate property in exchange for a monthly rent. According to Article 27 of the Tenancy Law, this contract may be verbal or written. However, if the monthly rent exceeds the unified basic salary, the law requires the contract to be executed in writing (Art. 29).

The lease agreement is considered valid as soon as there is an agreement on the use of the property and the rent payment, even if it is not formalized. However, formalization provides legal protection to both parties, prevents abuse, and enables access to judicial proceedings in the event of a conflict.

Under current regulations, if the rent does not exceed the basic salary, it must be registered in the municipal cadastre. If it does exceed it, the contract must be registered before a notary within thirty days of its execution.

Key obligations under the Tenancy Law:

• Comply with the current legal rent (Art. 17).
• Register the contract with the corresponding authority (Art. 14).
• Offer the tenant a contract with a minimum term of two years (Art. 28).

What happens if the contract is not registered?
You will not be able to request eviction, the contract will lose legal standing, the judge will require a rent certificate, and you may face fines of up to six monthly rents.

At Quevedo & Ponce, we advise companies and workers to ensure compliance with legal provisions and protect labor rights. Contact us to receive guidance on this important precedent and its impact in the labor field.