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Guide to avoiding surprises: 8 key points to keep in mind when negotiating new rental contracts - Infobae
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Guía para evitar sorpresas: 8 claves a tener en cuenta al negociar nuevos contratos de alquiler
La derogación de la Ley de 2020 por el DNU del Gobierno cambió la dinámica entre propietarios e inquilinos. La nueva legislación facilita acuerdos y define responsabilidades. Cómo lograr claridad y equidad para ambas partes
www.infobae.com
September 1st, 2024
The repeal of the 2020 Law by the Government's DNU changed the dynamics between landlords and tenants. The new legislation facilitates agreements and defines responsibilities. How to achieve clarity and fairness for both parties
By Jose Luis Cieri
Among the new rental rules in Argentina: minimum terms have been eliminated and contractual flexibility is in force (Illustrative Image Infobae)
With the repeal of the 2020 Rental Law through the Government's DNU 70/2023 , contracts were once again governed by the Civil and Commercial Code of the Nation. This meant an important change in the dynamics of housing rental agreements. Eight months after its implementation, both owners and tenants are beginning to adapt to the new tools, which facilitate free agreements and promote stable contractual relationships until the end of the contract.
One of the main aspects that favored this change compared to what happened until the end of 2023 (when there was a shortage of properties in pesos and the real estate market was dollarized) is the increase in the supply of properties for rent in Buenos Aires and in the main cities of the country. In CABA, the availability of housing increased by 200% , reaching more than 15,000 options. In Rosario and Córdoba capital, the supply increased by more than 120% since the beginning of the year.
Enrique Abatti , a lawyer specializing in real estate law and president of the Chamber of Property Owners of the Argentine Republic (Capra), told Infobae that the DNU was a Copernican change in the real estate field. “The recent approval of the Basic Law reaffirms the validity of this decree, which deeply affects all contractual relationships in the sector, from owners and tenants to buyers and sellers. The approval of Congress not only consolidates the position of the DNU, but also eliminates any possibility of it being revoked, providing significant legal security to all parties that today contract under its parameters,” he said.
Among the key features of the new contracts is the elimination of the minimum duration of the contract, which gives the parties flexibility to agree as they see fit. This allows them to better adapt to fluctuating economic contexts and to the specific needs of each tenant and owner.
Below are 8 tips or suggestions to help you understand how the current rules and legislation in force for residential rental contracts work. It is essential to consider these aspects before signing any agreement, to ensure that all parties are well informed and establish a clear and effective contractual relationship.
1-Security deposit and adjustment currency
A significant change is the flexibility regarding the security deposit, which can now be agreed in foreign currency and for amounts freely agreed between the parties.Mariano Esper , a lawyer specializing in real estate issues, also confirmed that "the possibility of stipulating the price in the currency that (the parties) consider appropriate, whether national or foreign legal tender, was established."
The DNU made the owners return to the traditional rental market and thus expanded the supply of properties that until the end of 2023 was complex due to the shortage of available units (Illustrative Image Infobae)
This freedom extends to the updating of the rental price, which can be adjusted quarterly, four-monthly or half-yearly according to the agreement between the owner and the tenant.
2-Flexible minimum term
The elimination of the minimum term for rental contracts provides unprecedented flexibility, allowing parties to adjust the duration of the contract according to their needs and convenience.Furthermore, Enrique Abatti (h.) , a lawyer specializing in real estate law and director of CAPRA, indicated that this “relieves pressure in inflationary contexts.”
3-Currency and rental adjustments
Contracts can now stipulate the price in any currency the parties deem convenient, as well as the form of adjustment, whether quarterly, four-monthly or half-yearly.“Both the owner and the tenant can agree on the index and frequency of the price update, providing greater flexibility in contractual conditions,” said Alberto Héctor Loyarte , Real Estate expert and real estate broker.
4-Types of guarantees
Guarantees have been significantly made more flexible, allowing different types of collateral to be agreed upon to ensure compliance with the contract.These guarantees may be personal, backed by a property, a pay slip or income statement.
Abatti (h.) highlighted that “the possibility of establishing more than one guarantee per contract is permitted, regardless of the purpose of the property.”
Contractors are free to choose from multiple types of guarantees, providing greater security and flexibility to both parties.
Esper added that the deposit can also be updated and agreed in national or foreign currency.
5-Early termination
The new regulations allow the tenant to terminate the contract early at any time, paying compensation equivalent to 10% of future rents until the end of the contract.Previously, Abatti explained, “you had to wait until the first 6 months had passed before you could terminate the contract.”
6-Reference values
As for prices, today in the city of Buenos Aires the rent for a two-room apartment ranges between $350,000 and $500,000 per month. These prices can fluctuate depending on inflation and market supply and demand.
Recently, the AFIP announced that it will no longer be mandatory to register rental contracts for urban and rural properties intended for housing, although maintaining their registration will continue to be convenient to access tax benefits (Illustrative Image Infobae)
Rodolfo Martín Barbieri , a lawyer and real estate advisor for the Argentine Real Estate Chamber, said that lower inflation “would provide greater financial stability and would prevent price escalation from month to month, something that could be seen before the end of the year if inflation remains at 4% or less.”
Zonaprop reports that rental prices in CABA have stabilized and experienced a decline. The average monthly price of a two-room apartment increased by 4.5% in August. Despite an accumulated increase of 45% in 2024, this growth remains below the annual inflation of 94 percent . However, it is still a high figure for wage earners, whose income has not yet adjusted to the inflationary pace.
“Today, the starting point values and the updates to rental contracts are considerably lower than at the beginning of the year,” added Barbieri.
7-Forecast in contracts
Current contracts show greater foresight on the part of landlords and tenants in terms of deadlines, currencies and price adjustments.According to Loyarte, it is essential to “express all relevant clauses in the contract wording. In fact, several types of adjustments can be applied in the same 24-month contract, but this must be clarified in the agreement and signed by both parties.”
8-Specific clauses
Contracts should include clauses relating to cost sharing, liability for damages and repairs, fire insurance and other important aspects.Esper stressed the importance of specifying “how the property costs are distributed, including services, taxes, fees and expenses.”
Now the ordinary expenses must be paid by the tenant and the extraordinary ones by the owner, but there are cases where it is agreed that the expenses are to be paid by the tenants, but it must be recorded.
“It is also key to clearly define who is responsible for broken objects and who should be responsible for repairing the damage,” Loyarte said.
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