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After an extreme crisis, the rental market has been revitalized: Tips to keep in mind before signing - Infobae
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Después de una crisis extrema, se revitalizó el mercado de los alquileres: consejos que hay que tener en cuenta antes de firmar
El mercado de renta de propiedades en CABA y otros grande centros urbanos del país volvió a ser atractivo. El nuevo marco legal favoreció el alquiler habitacional sobre el temporario, generando un ambiente más favorable para ambas partes
www.infobae.com
August 11, 2024
The property rental market in CABA and other large urban centers in the country has become attractive again. The new legal framework favored residential rental over temporary rental, creating a more favorable environment for both parties.
By Jose Luis Cieri
Post DNU, the new dynamic for residential rental contracts in Argentina was consolidated (Illustrative Image Infobae)
Since the implementation of Javier Milei 's decree that repealed the Rental Law, the real estate market in Buenos Aires and in the main cities of the country has registered significant changes that have transformed the way in which tenants and owners interact.
This DNU repealed previous laws that had imposed rigid and inflexible conditions for rent, allowing the return of more personalized agreements between the parties. The result enabled a more dynamic and favorable scenario for both parties, where the conditions of the contracts are negotiated freely, without fixed deadlines and in any currency.
Alberto Héctor Loyarte , a real estate expert and real estate broker, highlighted to Infobae that “one of the most notable effects of this change is the revitalization of traditional rentals, which are now more convenient than temporary rentals. High inflation and the fall in international tourism reduced the demand for temporary rentals, leaving hundreds of furnished properties empty, especially in less touristy areas. This change in demand led several owners to return to the traditional rental market, where the conditions of the contract are more stable and predictable.”
With the increase in houses and apartments for rent after the DNU (in CABA it was almost 200% ), the units for Airbnb also changed. Several large urban centers such as Mendoza, Mar del Plata and Córdoba capital, faced a shortage of housing in pesos due to the abundance of temporary and dollar rentals until the end of 2023.
Argentina seems to have returned to the previous market, favouring long-term housing agreements. According to a report by Inmodata, based on data from Inmoup, as the number of properties for rent and living increases, those for tourism and temporary use decrease in Mendoza capital. Only 19% of rentals are offered by the day and furnished, while 81% require a minimum of 30 days, targeting a different public than tourists.
“Traditional leasing offers two-year contracts with periodic adjustments, allowing for adaptation to the economy. In addition, specific terms can be negotiated, which provides flexibility and security,” Loyarte explained.
Legal Recommendations
The DNU, in force since December 2023, brought about a radical change, establishing principles of contractual freedom that were unprecedented in rental relationships.
The real estate market stated that tenants can now choose and negotiate prices (Illustrative Image Infobae)
Enrique Abatti (h.) , a lawyer specializing in real estate law and director of the Chamber of Property Owners of the Argentine Republic, pointed out that the regulations benefited both landlords and tenants, increasing the supply of housing and allowing tenants to negotiate prices. “Before July 1, 2020, when the Rental Law repealed by Javier Milei came into force , there were between 15,000 and 20,000 rental homes in CABA; that number fell drastically to about 1,300 in June 2023 due to laws 27,551 and 27,737. But, with the entry into force of the DNU, the offer climbed to almost 16,000 homes in just seven months,” he said.
The changes eliminated the minimum legal term of three years and the obligation to adjust rents with the Rental Contract Index (ICL), allowing the parties to freely choose the adjustment index and the periodicity of the same. “Tenants can now choose and negotiate prices, with a reduction of up to 20% in some neighborhoods of Buenos Aires. This phenomenon is observed throughout the country,” added Abatti (h.).
The segment recommends that tenants go to a real estate agency to find a property that meets their expectations and payment possibilities, making sure that the landlord is authorized to rent.
Mariano Esper , a lawyer and professor specializing in real estate and business issues, believes that the greater choice allows tenants to choose and negotiate terms, prices, adjustments and security deposit amounts, as well as offering non-owner guarantors if they have stable employment. Factors that facilitate agreements with landlords include the freedom to agree on the term of the contracts, security deposit amounts, currency of payment and the possibility of early termination of the contract .
“When negotiating a lease, it is key to understand the terms of price adjustments and the estimated adjustment. Tenants should be aware of the open-ended term of the lease and negotiate its length,” Esper said.
It is essential to carefully review the property and the contract before signing, ensuring that the distribution of expenses and repairs is specified to avoid conflicts.
It is vital that the tenant checks the property before renting it, this avoids future inconveniences. And everything that is agreed upon must be recorded in the contract before it is signed (Illustrative Image Infobae)
Esper shared an example: “A couple who wanted to rent on the coast was able to negotiate better conditions thanks to the current DNU. I always recommend consulting a professional to ensure clear and fair terms.”
Traditional vs temporary rental
For both landlords and tenants, it is more convenient to rent for traditional terms as it creates stability and predictability.“In temporary rentals, the high turnover of tenants increases the risk of non-payment and deterioration of the property, in addition to the absence of a security deposit. In traditional rentals, a guarantee is always agreed upon to respond in case of non-compliance by the tenant, which provides greater security to the owner,” said Abatti (h.).
Tenant defense
Since the implementation of the DNU, the rental market has seen significant changes, but it still faces significant challenges. Despite the increase in the supply of properties, thousands of tenants do not see concrete improvements in their ability to access and maintain housing. Shorter contracts and frequent rent increases create uncertainty, leading to moving being considered the only viable option.
Although the scenario has changed and the housing supply has expanded – for example, in AMBA it is a record – not all voices are favorable in the current context.
Ludmila Victoria Mazzoni Amado , from the Mazzoni & Asoc. law firm, said that “the DNU has not solved the underlying housing problem. Although there is an increase in the supply of rentals, short-term contracts and significant short-term increases continue to be a concern. Thousands of tenants face difficulties in paying, which makes moving an almost obligatory option.”
The traditional rental scheme is still preferred by tenants, mainly because most agreements are made in pesos, the currency received by most salaried renters.
When renting a property, it is essential that tenants read and understand the contract before signing. Paying attention to escalation clauses, termination terms, and making a detailed inventory of the property can prevent future problems (Illustrative Image Infobae)
“As for the relationship between tenants and landlords, although there is still a great inequality, some landlords showed a willingness to renegotiate rents due to disproportionate increases, prioritizing keeping good tenants over obtaining rents that are out of line with the market,” Mazzoni Amado added.
Traditional renting offers stability and organization in daily life, something that temporary renting cannot guarantee. The latter caused problems in tourist areas, where the lack of housing for permanent residents caused critical situations, such as the lack of doctors in San Martín de los Andes, or the lack of housing options in San Carlos de Bariloche.
Tenants are advised not to sign a contract without first reading it and to seek legal advice. “We also recommend requesting a detailed inventory of the property’s condition to avoid future claims and problems,” Mazzoni Amado concluded.
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