How much can the landlord raise my rent after several years?

Living five or more years in the same rented apartment is increasingly common in Lima and other Peruvian cities. And with each renewal comes the same question: can the landlord raise the rent as much as they want? Is there a legal cap? The short answer is that during the contract the increase is limited to what the parties agreed, and at renewal the price can be freely renegotiated.

Legal framework for leases in Peru

Residential leases are governed by the Peruvian Civil Code (articles 1666 to 1712) and, when signed under the simplified regime, also by Legislative Decree No. 1177, which created the residential leasing promotion regime and the FUA and FUAO forms.

The essentials:

• The fixed term agreed in the contract prevails. If it says three years, the landlord cannot terminate the contract earlier except for tenant breach.
• The rent is freely set between the parties. There is no mandatory official reference index for housing in Peru, nor caps like those applied in some European countries.
• Rent updates only proceed if the contract provides for them.

Adjustment during the contract

The norm in Peruvian contracts is to include an annual adjustment clause using the Consumer Price Index (CPI) published by the INEI, measured in Metropolitan Lima or nationwide as specified.

Practical example: a contract signed in March 2024 for S/ 2,800 per month in Miraflores, with an annual adjustment by national CPI. If the year-on-year CPI as of February 2026 is 2.8%, the new rent would be:

S/ 2,800 × 1.028 = S/ 2,878.40 per month.

Some common variations:

• Adjustment by exchange rate (rent agreed in dollars and paid in soles at the day's exchange rate). It is valid, but it is wise to agree on a cap to avoid jumps from currency volatility.
• Adjustment by fixed annual percentage (3% or 5%).
• No clause: the amount stays frozen until expiration.

If the contract does not include an adjustment formula, the landlord cannot raise the rent on their own. Any increase would require signing an addendum with the tenant's consent.

At the end of the contract

When the term ends, the parties can freely negotiate the new rent. The landlord may propose an increase above CPI if they consider the neighborhood's market justifies it (typical in areas like Barranco, San Isidro or central Arequipa), and the tenant can accept, counter-offer or vacate.

Watch out for the "tracto sucesivo": if after expiration the tenant keeps occupying the property and the landlord keeps collecting the rent without objection, the contract is understood to be renewed for an indefinite term and may be terminated by either party with reasonable notice, under article 1700 of the Civil Code.

Step-by-step process for an orderly renewal

1. Forty-five to sixty days before expiration, talk with the landlord. Ask in writing for their intention: renew, modify or not renew.
2. If they propose an increase, request the calculation basis: INEI CPI, exchange rate or a new market price.
3. Compare with real listings on real-estate portals for similar properties in the district and review the autoavalúo declared to the municipality to locate the value range.
4. Sign an addendum or a new contract. If it exceeds one year, it is advisable to have it notarized; if you used the DL 1177 regime, update the FUAO form before a notary.
5. Keep payments by transfer or Yape/Plin with details, not in cash without a receipt.

Practical case: Lima, 2026

A couple has rented an apartment in Pueblo Libre since 2020 at S/ 1,900. After six years, the landlord proposes S/ 2,700 (a 42% increase), because the area has appreciated after new Metro stations opened. The couple checks the market, confirms that a similar apartment rents between S/ 2,400 and S/ 2,600, and closes the renewal at S/ 2,500 with a new three-year term and an annual CPI adjustment. Negotiating with figures saves arguments.

What to have ready before renewing

• Signed copy of the current contract and any prior addendum.
• Receipts for the last twelve months of rent.
• Proof of payment of the property tax (Impuesto Predial) and municipal arbitrios that apply to the property (if you pay them under the contract).
• Updated photographic inventory of the property's condition.
• A small market price survey for the neighborhood.

When it is better not to renew

If the proposed increase is disproportionate to the market or if the property's conditions have deteriorated (leaks, broken elevator, security issues), choosing not to sign is a valid decision. In that case, communicate your decision not to renew by notarial letter and coordinate the handover with a record signed by both parties.

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