In brief
The Law on the Special Regime for Residential Property Leases (“Law”) was published in the Special Official Gazette No. 7,065 on 7 August 2026, and took effect on that same date. The Law replaces the previous model of strict regulation of residential leases, which imposed price controls, mandatory minimum terms, and restrictions on termination, with a regime based on the parties’ contractual autonomy, allowing them to freely agree on rent, currency of payment, term, guarantees, and dispute resolution mechanisms.
This new framework may present opportunities for landlords, investors, and companies with residential portfolios or corporate housing. However, the greater contractual freedom requires reviewing and adapting contract templates to the specific details of each transaction.
Key conclusions
The Law introduces a more flexible framework for new residential leases, with significant practical implications for companies, property owners, and investors, including (i) the coexistence of two parallel frameworks (one for existing contracts and another for new ones) which requires clearly identifying the applicable regulations for each lease relationship; (ii) greater scope for contractual negotiation regarding rent, currency, term, guarantees, and dispute resolution, which places greater responsibility on the parties for structuring the contract; and (iii) the need for clear, comprehensive contracts tailored to the new legal framework to take advantage of the regime’s opportunities and mitigate risks.
Organizations that act promptly to review their contract templates and internal policies will be better positioned to operate under the new regime.
In detail
Below are the most relevant aspects of the Law:
1. Scope of application and transitional provisions: The Law applies exclusively to residential lease agreements entered into after its effective date. Existing contracts will continue to be governed by the Law on the Regularization and Control of Residential Leases and the Decree with the Rank, Value, and Force of Law against Eviction and Arbitrary Vacation of Residential Properties, as long as the tenant retains possession of the property. Consequently, for a significant period, two regimes with distinct rationales will coexist, and companies with residential portfolios will need to manage both simultaneously.
Excluded from the new regime are, among others, undeveloped urban and suburban land, rural properties, commercial premises, tourist accommodations, and dwellings occupied as a result of an employment or subordinate relationship.
2. Freedom to agree on price, currency, and term: One of the main changes in the Law is that the parties may freely agree on the rent, the currency of payment, and the term of the lease.
If the parties do not specify a term, the lease is deemed to have been entered into for one year. Furthermore, if, upon expiration, neither party expresses a desire to terminate it, the lease will continue under the same terms.
The agreed-upon rent remains in effect for the duration of the lease. In the event of an extension or renewal, the parties may agree to adjustments to the rent, subject to the limits set forth in the Law; therefore, it is advisable to establish the applicable adjustment criteria and mechanisms from the outset. When the fee is agreed upon in a currency other than the bolívar, it is also advisable to specify in the contract whether payment may be made by delivering the equivalent amount in bolívares, the applicable reference exchange rate, and the date on which the conversion is calculated.
3. Formalities and minimum content of the contract
The Law requires that the contract be in writing and include certain minimum elements, such as the identification of the parties, the identification of the property, the term, the rent, the method of payment, the associated services, and the allocation of payment obligations. Additionally, the Law grants full validity to private contracts, as it does not require them to be notarized as a prerequisite.
In practice, this greater contractual freedom significantly increases the importance of having comprehensive and well-structured contracts. A contract that does not adequately address aspects such as renewals, notices, repairs, allocation of services, grounds for breach, or early termination may create loopholes that lead to disputes. Therefore, it is advisable to thoroughly review existing contractual templates and adapt them to the negotiation framework provided by the Law, taking into account the specific details of each transaction.
4. Limited guarantees: policy or deposit
The owner may require a guarantee to ensure the maintenance of the property and the payment of outstanding services. However, the Law limits the options to only one of the following alternatives:
- An insurance policy covering damage to the property; or
- A security deposit, which may be paid in cash or by bank deposit.
In both cases, the security deposit may not exceed the equivalent of three months’ rent. The deposit must be returned within 15 consecutive days following the termination of the lease, after an inspection of the property, and amounts corresponding to duly documented repairs or overdue services may be deducted. It is advisable to document the condition of the property at the time of handover and return through reports signed by both parties.
5. Tenant’s right of first refusal in the event of a sale
If the landlord decides to sell the leased property, a tenant who has occupied it for more than two years and is current on rent and utility payments shall have the right of first refusal to purchase it.
The landlord must notify the tenant in writing of the price and terms of sale. The tenant will have 15 days to express interest. If the tenant does not respond or rejects the offer, the landlord may sell the property to a third party under the same terms offered. If the landlord subsequently offers more favorable terms to a third party, the landlord must notify the tenant again.
Failure to comply with the right of first refusal could affect the validity of the sale, an aspect that must be considered by landlords and investors contemplating the sale of leased residential properties.
6. Early termination and unilateral termination by the tenant
The Law provides grounds for early termination in favor of the landlord, including: (i) failure to pay rent for three consecutive months; (ii) failure to pay utility bills for three consecutive months; (iii) unauthorized subletting; (iv) significant damage to the property; (v) unauthorized renovations; (vi) use of the property for purposes other than those agreed upon; or (vii) abandonment of the property.
The tenant, for their part, may unilaterally terminate the lease at any time. The parties may agree that such termination shall entitle the landlord to compensation of up to two months’ rent. This provision should be carefully considered when drafting medium- or long-term leases, particularly when the landlord has made investments or improvements to the property, as the maximum compensation provided for by law may prove insufficient to cover such costs.
7. Mediation, arbitration, and municipal courts
The Law recognizes various avenues for resolving disputes arising from the lease agreement, including mediation, conciliation, arbitration, and municipal courts. The option to agree to arbitration or alternative dispute resolution mechanisms provides a valuable tool for accessing a more specialized and expedited means of resolving disputes.
The Law also permits the use of email addresses as a valid means for notifications between the parties, provided that the authenticity of the communication is guaranteed and there is reliable evidence of its transmission and receipt in accordance with applicable regulations. It is advisable to precisely specify in the contract the permitted electronic means and the requirements for notifications to be considered validly served.