The most common form of lease agreement is that with a fixed rent for a certain term, and the lease is automatically renewed unless the landlord serves advance written notification in accordance with the lease agreement.

Other forms of lease agreements involve fixed and variable rent (for example, for retailers, the rent usually involves part of the earnings of the leased plot to build the store).

Also, some leases allow the tenant or landlord to early terminate the agreements, under certain circumstances, or without cause, depending on the terms of the negotiation.

Finally, there are also lease agreements that allow the tenant to have a call for the title and ownership of the property, which must be exercised under certain circumstances.

In relation to the formality of the agreements, lease agreements can be executed through private instrument or by public deeds (however, in case of rural properties, the agreement must be either a public deed or has to be signed before witnesses).

When the rent is high or the term is long, the lease agreements are executed by public deed, because this formality assures the tenant that if the landlord sells the property, any new owner (third-party purchaser) will be obligated to comply with the lease terms. If the lease was entered through a private instrument, the third party purchaser is not so obligated and may terminate the lease.

Lease provisions are — in most cases — freely negotiable. Leasing in general terms is regulated by the Civil Code; leases of urban properties are further regulated by Law No. 18,101; and Decree Law No. 993 contains special provisions on the leasing of rural land. However, almost all of these rules are supplemental to the intention of the parties, i.e., they apply in the absence of an agreement between the parties, except for very specific mandatory provisions. According to Law No. 18,101, certain rights of the tenants are not renounceable.

There is no maximum term for leases, although excessive long-term leases may be characterized as a sham or as a disguised transfer of property.

Another exception corresponds to leased properties under marital property (or belonging to the spouse in the case of a community property marriage), when the property is leased for more than five years (if urban) or eight years (if rural), as in that case it requires both husband and wife’s consent.

The parties may agree to the terms of their choice according to their interests. In general, leases of residential buildings are for one year and the rental period is extended for the same period tacitly and automatically.

Leases for commercial purposes tend to be longer, ranging between two and five years.

Finally, leases for major projects (such are commercial centers or industrial facilities) tend to be for more than 20 years.

No. Tenants may not require for extensions of the lease, unless the lease itself contains such provision.

However, if the agreement terminates but none of the parties deem it terminated (one continuing paying while the other accepts payment), the agreement is automatically renewed (in accordance with the agreement) for three-month periods.

Either party may early terminate the agreement if there is breach of obligations by the other party, or when the parties have stipulated early termination conditions.

Even if it is not provided in the contract, the law gives the tenant the option to terminate the agreement early in the following cases:

• When the poor state or quality of the leased premises prevents it from being used for the purpose for which it has been leased
• When necessary repairs are not made by landlord
• In urban property leases intended for residential purposes with a fixed term exceeding one year and there is a subletting prohibition

No. Parties may agree that the rent be paid in foreign currency. Also, it is very common that parties agree for the rent to be paid in UF (Unidades de Fomento), which is a monetary unit that is adjusted according to the inflation on a daily basis (similar to the CPI in the United States).

Rent is paid according to the parties’ agreement. If there is no agreement, the law establishes that it be paid according to local practice.

If neither local practice nor the parties are able to establish a rule, lease of urban property is paid monthly and lease of rural property is paid yearly. Also, for urban properties, payments are usually made within the first five days of each month.

That said, usual practice is that rent is paid month by month and in advance to each month (the first five days of each month).

There are no limits to rent increases. Normally, rent is agreed in UF as described in “Must rents be paid in local currency?” or in nominative units that adjust for inflation (Chilean pesos + % Consumer Price Index).

The following are usually required of landlords:

• Deliver the leased property
• Keep the property in a state that functions for the purpose it was leased (i.e., the landlord has to perform all necessary repairs)
• Maintain the property free from any disturbance or disruption
• Reimburse the tenant for costs incurred that are not the tenant’s responsibility

The following are usually required of tenants:

• Pay the rent
• Use the property according to the terms of the lease, without breaching the purpose of the agreement or agreed objectives
• Perform or pay for repairs that are the tenant’s responsibility
• Return the property at the end of the lease
• Maintain the property in good condition

The tenant has no right to assign the lease or sublet the property without the landlord’s express and written consent. If allowed, and the tenant assigns the lease, the assignee must agree to the same conditions as the original tenant.

It must be determined whether or not it was the tenant’s fault. If the tenant is at fault, he/she is liable for the damages to the destroyed property, especially for the payment of rent. If there is no tenant fault, the lease is not responsible for the damages. In both cases, the lease expires.

The landlord is usually responsible for insuring the leased premises. The tenant may also insure the premises if they choose to do so or if the parties agree.

It must be determined whether or not the lease is a public deed or private instrument (as described in our response to "What are the usual forms of leases?"). If the lease is executed in a private document, the purchaser is not obligated to respect it and the new owner may evict the tenant, terminating the lease (the tenant being allowed to claim damages against its former landlord). If it is a public deed, the purchaser will be bound to follow its terms (however, there are specific provisions in case the property is transferred by sale in auction as part of the enforcement of a mortgage, as in such case purchaser is only obliged to honour the lease if it was registered in the Real Estate Registrar prior to the mortgage that caused the auction).

Again, this depends on whether or not it was executed as a public or private deed. If the deed is private, it does not survive. If its by public deed, the deed is registered in the Mortgages Encumbrances Registry of the real estate registrar, and the mortgage is registered with a date prior to the deed, then the lease survives.