Current law does not treat leases differently based upon their purpose (use). In that sense, leases for either housing, office or commercial purposes are treated identically from the point of view of the Peruvian Civil Code. Therefore, the peculiarities applicable to different lease uses may be found in special rules to establish certain parameters for a particular activity that is part of the use. However, a lease is only one of the different methods for granting the use of a certain property to third parties in Peru. In addition to lease agreements, other arrangements, such as financial leasing, loans, atypical use concessions or the establishment of in rem rights established by law (e.g., usufruct, surface right, easement).

Notwithstanding the foregoing, leases are most commonly used for granting real estate rights in Peru which are typically housing leases, leases for office and leases for commercial establishments.

The Peruvian Civil Code regulates leases in Peru and establishes a model for a lease agreement. In such regulation (model), mandatory rules (rules of forced compliance) and supplementary rules (applicable only if the parties do not agree otherwise) can be found. Note that there are very few mandatory provisions (e.g., the maximum term of every lease is 10 years). However, there are many supplementary rules in the said regulation (e.g., the use of leased property).

Accordingly, the contracting parties are free to agree on the content and scope of the leases. However, the parties need to respect the mandatory provisions prescribed by the law because the provisions in the lease that violate these rules are invalid.

A lease can be subject to a definite term or an indefinite term. In the case of a lease subject to a definite term, such term may not exceed 10 years. When the asset subject to the lease belongs to a state entity or a legally incapacitated person, the term may not exceed six years. In any case, any term or extension that exceeds such limits is understood to be reduced to the mentioned maximum terms.

In the case of a lease subject to an indefinite term, any of the parties may terminate the lease agreement by giving 30 days' prior notice to the other party through a notary public. Once such term elapses, the lease agreement is considered to be terminated.

The lease terms depend solely on the agreement of the contracting parties.

No. However, when the agreed period (the same that cannot exceed 10 years) is interrupted (i.e., periods when the tenant was unable to use the property due to actions of the landlord), the tenant may claim in the courts (or in arbitration, if such dispute resolution method was agreed between the parties ) the recognition of such periods.

A landlord can generally terminate the lease when the tenant breaches the lease terms, which usually includes non-payment of the rent agreed in the lease, the use of the property that was not permitted by the lease and assigning or subletting the property without the landlord’s consent .

Similarly, the tenant may terminate the lease in case of default by the landlord, such as where the landlord is unable to provide the tenant with uninterrupted peaceful possession of the leased property or the leased property was delivered with damages that precluded its use. On the other hand, depending on the respective parties interests, the parties may agree that any one of them or both have the right to unilaterally terminate the contract without cause and without the duty to indemnify the other party, having only to submit a notice to the other party in advance.

Finally, the parties may mutually agree to terminate the lease at any time.

The parties may agree that the rent can be paid in local or foreign currency.

This will depend on the agreement of the parties. Rent is usually paid monthly, in advance, at the beginning of the month.

There are no legally established limits on increasing rent. The parties are free to agree on any method to increase rent.

However, rent is usually fixed for the initial term. Rent for agreed upon renewals or extensions may also be fixed or may be adjusted to reflect the market value at the time of renewal or extension.

Nevertheless, leases commonly allow for rent to be increased automatically at specified times based on the criteria stipulated by the parties in the lease.

The following is usually required of landlords:

• Grant the use of the property to the tenant and ensure that the tenant can maintain effective use of the property
• Repair and maintain the structure of the property
• Provide tenants with a valid notice of termination (in writing) if terminating the lease

The following is usually required of tenants:

• Pay rent on time
• Keep the property in good order
• Inform the landlord if repairs are needed and give the landlord access to the property to carry out repairs
• Give the landlord access (often by appointment) for inspections and to perform landlord required work
• Return the property to the landlord promptly upon expiration of the lease term

As a rule, the tenant is forbidden from subletting the leased property to third parties. However, the parties may agree in the lease that the tenant may sublet the leased property or the landlord may grant permission to sublet later through an addendum to the lease.

In the event of destruction, the following two possible scenarios can arise:

• If the leased property is substantially damaged or destroyed by causes not attributable to either party (e.g., act of God), the lease is often terminated.
• If the leased property is damaged or destroyed due to causes attributable to one of the parties, then the lease is terminated and the party causing such damage may be liable to the other party for the damages caused to the other party as a result of the damage or destruction.

The Peruvian Civil Code does not stipulate the party in a lease that is obligated to insure the leased property. Therefore, if the property is required to be insured by one of the parties, the obligation of that party should be documented in the lease. The obligation to insure is generally assumed by the party that that has use and control of the property to be insured. For example, if it is a lease for office space, the tenant usually insures the leased office area and the landlord insures the common areas of the building (if any).

Lease agreements survive and are binding upon the new owner only if the lease agreement has been registered in the Public Records (i.e., the electronic entry of property in the Public Records). If the lease has not been registered, the new owner can choose to honor the lease agreement or terminate the lease agreement.

If a foreclosure is the result of a prior registered mortgage or lien over the property, the lease will not survive at the option of the beneficiary of the foreclosure.