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Milei wants to repeal the Rental Law - Infobae
November 21, 2023Milei wants to repeal the Rental Law: What can happen to contracts already signed
Homeowners and real estate agencies support the president-elect's proposal, while tenant groups reject it. What will happen to the agreements that are adjusted by the Rental Contract Index and those that were agreed through Casa Propia
In the midst of the difficulty in renting homes, the president-elect Javier Milei maintained that he would repeal the Rental Law so that contracts can once again be carried out by the Civil and Commercial Code. (Illustrative image Infobae)
In the midst of a traditional rental market in general crisis and almost no supply, the president-elect, Javier Milei , assured that he plans to repeal the current Rental Law that was recently reformed in Congress.
The idea generated uncertainty and concern both among those with contracts signed more than two years ago, as well as among those who signed them recently. For the libertarian, “the only thing the Rental Law has done is cause harm. He ended up harming those he intended to protect.”
Can the Rental Law be repealed by Decree of Necessity and Urgency? Or should it go through Congress again? The regulations that were made through the Legislative Branch could not be repealed by decree, except in some emergency or crisis such as COVID.
Enrique Abatti (h.) , a lawyer specialized in real estate law and director of the Chamber of Owners of the Argentine Republic, told Infobae that “we would have to see how the repeal is done, because if it is total it would return to what was stipulated. the Civil and Commercial Code of the Nation before March 2020, that is, 2-year contracts, in national currency, with the adjustment agreed upon by the parties (quarterly, quarterly, semi-annual, among other possibilities), and without the possibility of indexing, the non-obligation of declaring contracts before AFIP, among other issues.”
Experts in real estate law maintain that we must recognize a very positive aspect of law 27,551 (sanctioned in June 2020) and that it maintained through the recent known reform – law 27,737, modified last October –, which is the possibility of indexing the contracts. If the repeal is total, then this possibility would be lost.
“What should be done is a legislative reform in which some articles of both laws are partially repealed, once again setting the minimum term of 2 years and giving freedom both in the mechanism and in the periodicity of establishing contract adjustments, always maintaining the possibility of indexing,” clarified Abatti.
Contracts already signed remain valid until they are terminated or terminated for any justified cause.
Different groups do not agree with this Milei initiative and defend the current regulations. Although they recognize that it is very difficult to access housing due to the existing shortage throughout the country: in CABA the supply was drastically reduced in 2023 and in Córdoba capital, almost 40% this year alone.
On the contrary, real estate agencies and owners understand that it would be beneficial to return to two-year agreements and not three, and free agreement between owners and tenants.
Owner groups argued that if the law is repealed, there would be more owners who would once again use their properties as traditional rentals. Of course, they reaffirm that it would be the ideal time to deal with express eviction for non-payment for more than two months and create a legal framework for quick evictions (because a trial sometimes exceeds a two-year period).
Germán Matienzo , a member of the United Owners group of Argentina, highlighted to Infobae : “We see with optimism the path described by the president-elect regarding the repeal of the law. We believe that, along with this, an express eviction law should be considered and settings can be freely updated. This will result in greater supply and, therefore, lower prices. In addition, it will activate the sales and construction market, returning properties to their role of safeguarding value. "Whoever opposes it will be because he is not a tenant or did not experience the desperation of looking for rental properties with zero offer, as was the case recently."
Current agreements
It is currently estimated that there are more than 8 million tenants in the country.The three-year agreements and interannual adjustments through the Lease Contract Index (ICL) and the few that began to be carried out since October 18, also for three years and semi-annual adjustments through the Casa Propia method, will remain in force.
Abatti reaffirmed: “In the event of repeal of the current law, the contracts that were signed prior to the eventual repeal will remain in force under the same terms and conditions until their termination.”
The concrete thing is that if the regulations are repealed, at least until 2026 three types of contracts will coexist in Argentina, another situation that also has no precedent.
The announcement generated expectation and concern at the same time when rentals are going through a crucial situation. There are cities where you cannot find apartments or houses. Returning to two-year agreements could lead to the resumption of private housing projects to be used on lease, although it cannot be confirmed with certainty whether the repeal would have a favorable impact.
“The supply of properties for rent will take a few months to be restored because the market will be waiting for the announced measures,” Abatti concluded.
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