Abusive landlords in Ecuador: Ecuador Rental Law

“Come on man, help me grab her washing machine.” My Ecuadorian friend (and roomate at the time) yelled.

“Naw man, even if she did screw me, and I don’t mean that in the positive sense, I’m not about stealing people’s shit.” I responded.

“Thats how we do it in Ecuador.” He responded.

You see, recently a good local friend of mine and myself were renting an apartment in Quito, and the landlord upon finding out we were going to unoccupy the apartment refused to give us back our security deposit.

So my Ecuadorian friend planned on cleaning her out by taking her microwave, washing machine and random other things… but I eventually talked him out of it.

But as a renter in Ecuador, excuse me, as a FOREIGN renter in Ecuador, its important you know your rights cause a lot of people will try to take advantage of you.

It is what it is.

So what exactly are your rights as a renter in Ecuador? 

Well, this week I was interviewing a friend in the Rental Court of Ecuador (Juzgado de inquilinato) in Quito asking just that.

Me: Security deposits, how much should they be, what is legal?

Response: There is no legal limit as of yet but most folks with nicer properties charge two months worth of rent as the security deposit.

My take: Use your status as a foreigner (us foreigners have a good rep of being good renters so use that as you negotiate) and often you can get the landlord down to accepting one month worth of rent.  Some don’t ask any deposit.

If a property owner doesn’t mention a security deposit, DON’T mention it yourself!  If there is no way around a hefty security deposit but you really want the place, most landlords will accept, and I suggest, that you pay half the security deposit up front and the other half after a month or two, this gives you time to evaluate the property.

Me: If I leave my contract early, does a landlord have the right to keep my security deposit?  

Response:  No, absoutely not, not in Ecuador.

Me: If I leave my contract before it expires, and unoccupy the property, can the landlord come after me for the unused time on the contract?

Response:  No, not in Ecuador, generally, if you notify you’re leaving, unoccupy and stop paying, its over.

Me: What can I do if a landlord doesn’t want to return my security deposit?  

Response: Most Ecuadorians just occupy the property for the amount of time the security deposit would buy them, and leave it at that.  You could also sue them through this office (Juzgado de Inquilinato) and you could get a judge verdict within 3-6 months.

Me:  Switching sides a bit, if you as the owner of a real property in ecuador are renting to someone who stops paying their rent, how quickly can you legally evict them and what is the process?  

Response:  Well, its more complicated than in the US where I’ve heard in many states by the 10th day of non-payment you can get the police to come and get  the tenants stuff placed on the front lawn.

Here after two complete months of non-payment you can file a complaint through this office and within another 1-3 months get a verdict to have them legally booted from your property.  In Ecuador, you can not get someone booted from your property just by going to the police, you need a court order.  If the case goes to the court the judge will order the tenant to pay you for all the time they spent in your property without paying.

Me:  Most foreign investors, like myself, are weary of places (like Costa Rica) where squatters or in this case folks that rent your property for a really long time can eventually gain some sort of legal right of ownership of your property?  True in Ecuador or not?  

Response:  No, not in Ecuador, there is not this risk when renting property in Ecuador.  You may run into this a bit when dealing with seemingly deserted, unoccupied land several people claim title too, but not when renting residences or commercial property in Ecuador.

Me: How can you legally register a rental contract in Ecuador?

Response:  By getting a few copies of the signed contract and copies of both parties’ legal ID and bringing it to your nearest JUZGADO DE INQUILINATO, once here we can give you more specific details or requirements you need to register the contract.

That’s it, now hopefully you won’t find yourself trying to lift someone elses washing machine!

To keep reading this post please subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

First Name
* Email
* = Required Field

6 month Conclusions: The Ecuador tiki hut building project with scaffolding Surrey

OK, so it’s been a bit over 6 months since I finished my Tiki Hut building project on the coast of Ecuador near Montanita.

It’s hard to declare something a success when you finish building it.

You gotta wait and see how it actually rents.  And now, the numbers are in.

3 tiki huts built with oceanviews near Montanita in a little over 6 weeks.  Plus a remodeled ‘budget’ 4 bedroom house with oceanview, subcontractors at https://northernlightsexteriors.com/ providing windows installation and roofing service.

There are also to as high impact windows, impact-resistant windows, or storm windows. But regardless of what they’re called, hurricane impact windows perform some vital functions, one among which is to guard your house and shield you and your family from the devastation that violent weather can create. Hurricane Impact Window Installation, provide superior protection during a storm . Since they’re an integral a part of the structure of your home, there’s less chance for the wind to travel around them and tear them faraway from the wall, something which will happen with storm shutters. They also simultaneously let light enter an area while protecting your carpeting, furniture, and drapes from the damaging effects of ultraviolet rays. They require little or no effort to manipulate; all you would like to try to to during a storm is to form sure that they’re closed securely and locked.

4 VERY different styles.

Well, here are the final conclusions and what I learned renting each and what Id do different next time…

Tiki Hut 1, I bought this All-wooden hut pre-built from a builder I know from the Ecuadorian Amazon, Tena region.  It took 3 days for them to install it on my location elevated a few feet above the ground.  It has a wooden balcony, wooden floor, wooden walls, a “sing”roof, a beautiful oceanview, one bedroom, one bathroom, a sink, kitchenette, mini-refrigerator, WIFI, one queen bed, closet, one full bathroom with The Original Frameless Shower Doors and a hot electric-powered shower with a tile floor and vinyl-covered walls. Saalfeld Construction Roofing proved very professional.

I had to tile the floor myself first laying a small web or rebar, then laying a 5 cm layer of cement, then laying the tile… and then I had to stick vinyl on the bathroom walls with rubber cement as well as install the water and electricity outlets and hook up. After all the installation were done, with the help of HANOVER POWERWASHING PROS I was able to clean off everything giving the hut a spotless and perfect finishing.  Roof and guttering store services were provided by Pressure Washing Adams County | Gettysburg Powerwashing ProsFor rent (based on market prices) at $25/ night, $100/week or $250/month, the price is the same for one or two people.

montanita home rentals


Total build time = 7 days.
Total size = 24 m2 or 258 ft2
Total cost = $3753

Final Conclusions from SC Roof Repair GreenvilleShould not have included the bathroom within the wooden structure.  Better to build bathroom out back end with cement block and tiling, hut can get very humid and damp after showers.  Size was a bit too small for comfortable living with couples.  At 6m x 4m another meter of width would have helped out a lot.  Would have used different material for roofing cause when it rains it makes a lot of noise and in the sun the metal sing can really heat up. But an occasional power wash from york powerwashing pros, even if it’s under the pretence of washing, can cool down the roof for a while. Amazonian wood holding up good to coastal climate, still cant beat the view from the balcony.  Occupation rate over last 6 months as vacation rental 70%.  A success.

Tiki Hut 2, The budget option with little ocean-view built with a cement floor and cement block with the “Sing” metal sheet roofing so common in this area of Ecuador.  It has WIFI and a mini-stove and bathroom (all in the same room) while the shower is behind a blind from https://affordableblinds.com/.  I hope to rent it to a surfer or backpacker for around $100 a month or $5 a day for shorter time periods.  It’s good enough for me and someone not very picky, I could live there if I needed to live somewhere rent-free.  It is very soviet-esque but comes furnished with bed, table, chair, Wifi internet, electric cooker, sink, and a half bath with the shower around back which does have a curtain.  Currently its listed for rent at $100 a month.

In stamping simulation, the forming of sheet metal is simulated on the computer with the help of special software. Simulation makes it possible to detect errors and problems, such as wrinkles or splits in parts, on the computer at an early stage in forming. In this way, it is not necessary to produce real tools to run practical tests. Forming simulation has become established in the automotive industry since it is used to develop and optimize every sheet metal part.


Total build time = 6 days. (One Ecuador workweek).
Total size = 16 m2 or 172 ft2
TOTAL COST $892.49

Final conclusions:  This Tiki hut was a bust and by far the hardest to rent.   Occupation rate over last 6 months as vacation rental mainly to younger backpackers, surfers is 12%.  Proves saying if you don’t have the money to do something nice, save your money first.  For most, feels too much like a prision cell with all the cement and lack of windows.  I would not have done this Tiki Hut again if I had a do-over.  At least I have a place I can live rent free if need be.

Tiki Hut 3, By far the most labor intensive and time consuming, I designed the hut myself based off similar “mixed” models in the area.  Due to inexperience building these types of huts (it was my first time) I made mistakes all along the way that caused me to go about $2k over budget (see the end of this email for details). the base of the project was completed thanks to https://www.mtecscaffolding.com/case_study/scaffolding-surrey/ scaffolding builders that had the fright tools and knowledge.

By “mixed construction” I mean a building that uses a mix of both eco-materials like bamboo and normal construction materials like cement and brick.  My idea was to build an elevated structure a few feet off the ground with a cement, tiled floor and walls made partially of brick and bamboo.

The roof would have bamboo cross beams and a typical-for-the-area grass roof with a hidden layer of heavy-duty plastic and mosquito netting to keep the bugs out.  The hut would have a balcony, one bedroom, one full bathroom with electric-powered hot shower and a kitchenette area complete with a quartz countertops, sink, mini-refrigerator, one queen bed, closet, WIFI and a dining table for two.  For rent (based on market prices) at $30/ night, $100/week or $250/month, the price is the same for one or two people.




Total build time = 5 weeks
Total size = 30 m2 or 322 ft2
Total cost = $6557.36
Final conclusions: By far the biggest success of the three.  The size is much more comfortable for a couple as a longer term residence at 6m x 5m, a full meter wider than the wooden bungalow.  Very easy to rent, most folks extend their stay, great for single person longer term or for a couple on a shorter stay.  Average rent 1-2 months as folks explore nearby areas.  Would have built on ground to lower cost of construction by about $1k, would have built balcony larger to convert it almost into a deck for barbecuing, etc.  Occupation rate over last 6 months as vacation rental 84%.

Overall conclusions after renting the huts for 6 months:  If I had to do this project again, I would have built two of the brick/bamboo huts instead of the wooden and cement ones.  I would have hired an architect to manage the building project for me (was very time consuming for me).  And I would have explored 2 bedroom designs cause my far-less-attractive-budget 4-bedroom-oceanview very-Ecuadorian house I found for $15k still rents even better than the huts (at $450-480/mon) because people like the space.

(Related information: Get all information of the greatest furnoture that would go with your new home from a list like they’re building here at the website of Clever Shop List)

To keep reading this post please subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

First Name
* Email
* = Required Field

How I lost $49k overnight in Ecuador

Picture this…

You sell your business. And after paying off your debts put the profit in the bank. A cool $49k.

Then you see on the news your bank, one day working as usual, and the next, closed!

And your moneys gone.

No, its not the 1930s, thats exactly what happened to me this week here in Ecuador.

I had my money in a month-to-month CD making 9% APR in COOPERA LTDA, the “credit union” that closed its doors this week.

What happened was the board of directors was accused of money laundering through several accounts by the government which caused a run on the bank. Then two days later the order came from the government to close shop altogether.

All in a matter of 3 days within this past week.

Didn´t matter the cooperative was one of the largest in Ecuador, had been around almost a decade and had 106,000 accounts opened.

Was this a government take-over or a highly sofisticated, well-planned bank ´buy-in´ where an insolvent bank orchestrates their own sudden demise effectively bailing themselves out? Who knows.

All I know is Im out almost $50k, and it sucks.

But now you know what it cost me about $50k to learn, that you shouldn´t have your money in Ecuador banks or cooperatives, at least any significant amounts.

Don´t do it!

There is a reason Ecuadorians don´t trust their own banks and prefer to store their wealth in real estate.

In foreign countries they´re not dumber or less-developed than you, really, everything is the way it is for a reason. You just gotta stick around long enough to learn it.

So one visa type you should throw out is the investor visa based on a CD worth over $25k… screw that! Best to go the route of real estate.

I´ve always believed it wasn´t how much you had in the bank, but your income stream that can make or break you.

This belief will now be tested considering I just lost all my “liquid” savings and am now starting from zero.

To keep reading this post please subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

First Name
* Email
* = Required Field

The dos and donts of hiring employees in Ecuador

Today is the 6th and final installment in the series “Starting a business in Ecuador”.  

“I’d hire an employee in Ecuador but I don’t want them to sue me.”  I hear a lot.

“Are you dumb or just plain ignant.” I always want to respond.

It’s true, the employment laws are quite different in Ecuador then maybe what you’re used to, and at first glance seem to favor the employee.

But if you hire and fire right like we’ll talk about today you got nothing to worry about.

After you’ve defined your business idea, obtained your social security card, legally formed your business, found funding, gotten the RUC and permits, now you’re ready to hire employees. If you looking for a headhunters in the New Orleans area? Visit gateway-staffing.com site.

The true beauty of starting a business is that if you can let go a little, you can quite easily form a living entity that will exist and flourish without you.

In Ecuador, like in most third world countries, you can find qualified labor very cheap.

For instance, last year I was managing my business, Hostal Murali, in Guayaquil, until I hired a young bi-lingual local guy to manage the business for me.  All it cost me was a bit over the minimum  wage ($318/month) and I completely extracted myself from the business.  The last few months as an owner I was barely even in the place as I dedicated myself to other things.

And you know what, Murali got even better.

You see, managing nor administration are not my strong-set, in fact, a lot of things aren’t.

It’s important to recognize that and understand there are many folks who can do it better than you.

The beginner entrepreneur always makes the mistake of thinking no one can do their job better than them.

So, what’s the best way to find qualified employees in Ecuador, quick?

– For me, the best way is to publish a ‘wanted employment’ ad in the Sundaypaper where you’re located.  In Quito, try El Comercio, on the southern coast try El Universo, in Cuenca, try El Mercurio. After placing an ad for my newest business, a hotel near the airport in Quito, my phone literally rang off the hook for two full days.

– Publish an ad online at computrabajo.com.ec or multitrabajos.com , those are two local favorites.  But be WEARY, dont put your personal cell number or email on these sites cause they will stay up there forever!  Get an email and a cell number only for the employee search, then ditch it.

How to hire employees legally in Ecuador?

To hire an employee in Ecuador, first you need to obtain your RUC, or tax ID number form the SRI, like we covered recently in a previous letter.  Than the easiest way is to get an accountant who will draw up the employment contract and register it in the Ministry of Labor (Ministerio de Trabajo) and help you affliate your employee to the Ecuador social security system IESS under your name or company.  I found an account that did both for me for one employee for a total of $50.  From that point on you will need to withhold about 9% of their salary and pay it to the IESS and you as the business owner will have to pay 12% on top of that in their name.  For an employee you have making the minimum wage in Ecuador ($318/month) that comes to around $50 a month you will have to pay for each employee you have.

What are your legal responsibilities to the employee?

In Ecuador, as mentioned above, you will need to pay 12% of the employees salary to the IESS each month, you will also need to pay the employee two bonus payments, the DECIMO TERCERO and DECIMO CUARTO, each are aqual to a full month of salary.  One is paid in December and the other is paid in the “back to school ” month (In the highlands this is August, on the coast it is March).  Also, once a year you will need to pay your employees a fraction of the on-the-books earnings of the business called UTILIDADES.  That’s about it.

How to fire employees without getting sued?  

Many employees in Ecuador after being let go fire their past employers.  It’s kind of an epidemic but they can’t get anything out of you if you follow the above rules and have proof you are current in their regular and bonus payments.  Upon firing an employee, or them deciding to quit, in Ecuador you have to pay them a final LIQUIDATION (liquidación).  The amount of this payment varies on how long they have worked for you and how high their salary was.  To give you an idea a friend of mine making $800 a month got fired from his job where he had worked for 6 years and they paid him around $7,000 dollars in liquidation. There is a formula that an accountant can help you with.

I recommend to do all the above with an accountant in Ecuador and even if a prior employee does sue you, if you affiliated them, paid them and their affiliation on time, paid the necessary bonuses and paid what you needed to pay in liquidation, they can sue all they want but they aren’t going to get anything from you. You can open website to learn what is considered to be wrongful dismissal, so you know how to act in accordance with law when you fire an employee.

That’s it, right from the mouth of an experienced business owner with employees in Ecuador… hire someone in Ecuador, you’ll be glad you did, I’ve had nothing but positive experiences.

To keep reading this post please subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

First Name
* Email
* = Required Field

What you wont be good at in Ecuador

This is the 5th installment in the “Starting a Business in Ecuador” Series.

The next big step in starting your business in Ecuador is a fun one… buying stuff.

Furnishing it… in other words. Furnishing your business can help it reach the zenith of success, because every customer or client likes to visit a place which is pleasing to the eyes. Get a comfortable sofa for you to relax when things get tough at work, or maybe even consider bying a Modrest Kingsley Modern Marble & Rosegold Dining Table, when you want to engage your clients in a meeting with not only powerpoint presentations, but also some nice delicacies. All the furnishing hacks bodes well in business and mus be considered.

And it’s important you understand something before you attempt it.

No matter how long you live in Ecuador, no matter how well you speak Spanish… you’re still a foreigner, and locals will know it as soon as you open your mouth or maybe even when they see you a mile away.

You have to accept the fact that there are certain things we just cant do as well as the locals… like get the best prices on many things.

You can live in denial if you want to, or you can accept this and take measures to protect yourself against it like using a trusted local to do a lot of the shopping for you.

At 5’6, I’m short.

I have to accept the fact I will never be good at reaching things that are high up. I just won’t.

And you and I, being foreigners in Ecuador, very often just won’t be able to truly pay the prices the locals pay.

I aquaint this like when a guy goes into a gay club… they either going to get ya’ on the front end, or up the back… but be sure, they going to get ya’.

Particularly, when a foreigner buys at an open market in Ecuador, unless you really know what you’re doing, they going to get ya’ on either the price or the quality.

Never fails.

Keep this truth in mind before you go spend thousands of dollars on furniture, equipment and other items for your business, you could save yourself thousands by reading about them on unclutterer before buying.

Trust me, I know, after less than a week of my new business Quito Airport Suites being open, a bed rail broke, causing me to replace all of them with more sturdy ones, I had bought bad, in an open market in Ecuador. And it cost me a few hundred bucks.

Buyer beware, this aint Walmart anymore Dorothy.

To keep reading this post please subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

First Name
* Email
* = Required Field