Rentals: Are We Heading Toward a Flood of Lawsuits?
By Gonzalo F. Coira*
The rental market shouldn’t be a battleground—it should be a cooperative relationship between two parties. It’s a form of recklessness to allow tenants to remain indefinitely in a property through coercion, just as it’s absurd to expect them to own real estate. The solution? A tenant credit scoring system.
Landlords have welcomed the president-elect’s announcement to repeal the current Rental Law, while tenant advocacy groups are protesting what they see as the loss of rights and greater housing uncertainty.
But what’s actually true about each side’s claims? What has the market—and more importantly, the experiences of neighboring countries—taught us?
Let’s look at this as a trade-off and identify who really wins and loses (if anyone) in what is increasingly becoming an ideological, rather than practical, debate.
The idea of “freedom” in this context—pitted against tenants’ concerns about abusive practices by landlords—is, in fact, a misrepresentation. This belief has grown over past decades as the rental issue was framed as a “fight,” rather than as a mutually beneficial relationship between two interdependent parties.
First, rental prices are closely tied to average property values. But that’s not the only variable. Housing supply, access to credit, and—most critically—legal certainty and stability also play a major role.
Makes sense, right? That brings us to the root of the problem: the lack of certainty and legal security. The data currently circulating isn’t entirely accurate, but one thing is clear—there’s a 70% housing deficit. Around 40% of available units have been pulled from the market due to the Rental Law, and the remaining 30% represents inventory projected to return within the next 36 months.
Back to our key point: that 40% drop is directly related to the uncertainty and legal insecurity landlords feel. Many choose to exit the market or turn to short-term rentals for tourism as a safer alternative.
In this context, repealing the Rental Law would offer greater legal security to landlords and real estate investors. Even if it means sacrificing some profitability, the long-term gain is predictability—something that’s missing under the current system.
We’re talking about contractual freedom for both parties, but with reasonable limits—just as all successful models across the region do. For example, a minimum term of two years for urban leases is standard throughout the West and works well.
Should landlords be allowed to evict tenants at will, every month, based solely on opportunity? That wouldn’t be freedom—it would be outright abuse.
On the other hand, the extortion practiced by certain tenants—who threaten to remain in the unit indefinitely, leveraging the slow legal eviction process—is also abusive. This dynamic ultimately harms all renters, by shrinking supply and raising barriers to entry, even for a simple studio apartment.
What’s needed, as in any system, is balance—a fair play mechanism between two parties that actually need each other.
To encourage this balance, it’s time to implement a tenant registry—a sort of “tenant Veraz” or credit scoring system—so that landlords can assess rental behavior. Above all, we need legislation that streamlines the eviction process.
This would also resolve landlords’ demand for personal property guarantees from tenants—an illogical and burdensome requirement, especially for renters who obviously don’t own property.
Such initiatives would boost housing supply and encourage new residential development, which in turn would drive down rental prices and offer tenants more options and greater housing security.
Attorney – Master’s in Bankruptcy & Corporate Reorganization, MIT Honors Recipient, Fire Hydrant Award Winner, CEO & Founder of Pedro Te Compra.
