BuySellBA
Administrator
Rentals: A specialist previews what's coming, including prices, adjustments, and eviction trial times - La Nacion Propiedades
Source:
www.lanacion.com.ar
March 03, 2025
In a one-on-one session, Enrique Abatti, a lawyer specializing in real estate law and president of the Chamber of Property Owners of the Argentine Republic, detailed the key points that revitalized the real estate market.
Enrique Abatti, lawyer specializing in real estate law and president of the Chamber of Property Owners of the Argentine RepublicDAVID FERNANDEZ/ AFV
The rental business changed almost overnight. The repeal of the rental law was a key turning point. Enrique Abatti, president of the Chamber of Property Owners of the Argentine Republic, is also a lawyer specializing in the real estate market who has followed the dynamics of rentals for almost 50 years and has written more than 66 books on the subject. Along with Drs. Ival Rocca Jr. and Enrique Abatti Jr., he is ready to go head-to-head with LA NACION and preview what's coming in a turbulent market .
– What fundamental changes did the Decree of Necessity and Urgency (DNU) bring about, repealing the rental law?
– The DNU established a Copernican change in rental matters . It has no precedent in Argentine legislation and few worldwide, as it grants unprecedented contractual freedom between parties . It marked a before and after in the rental market: one of the most significant was the elimination of the three-year minimum term for housing contracts, which had been a major obstacle for landlords. Now, contracts can be adapted to the needs of the parties, with shorter terms and more dynamic adjustments.
– Why did the rental law passed in 2020 fail?
– The biggest mistake was ignoring the country's economic reality . Imposing three-year contracts with annual adjustments in a context of inflation exceeding 240% per year was absurd . Landlords couldn't sustain those terms, resulting in a drastic reduction in supply. Another serious error was not allowing rents to be agreed in foreign currency . This, combined with the possibility of paying in pesos at the official exchange rate, created a huge gap between real costs and landlords' income.
-Contracts are currently adjusted every three months. Will this period be extended? What does it depend on?
-With the repeal of the law requiring landlords to maintain fixed rents for a year, the rental market tripled last year , as the parties now agree on the amounts and freely choose the adjustment rates and their frequency. As inflation continues to decline, these rates will move from quarterly to four-monthly, and then, likely, to semiannual, particularly benefiting those who want to rent, as they can now choose and negotiate prices, adjustments, and payment terms.
-There are no more waiting lists like there were a year ago.
They disappeared because rental prices have stabilized, even with constant-currency discounts of up to 20%, depending on the location of the properties. This also helped reduce the social tension caused by the repealed laws, which ultimately harmed tenants . The ban on paying rent in foreign currency was also lifted , allowing parties to agree to payments in dollars or euros, if desired, which is crucial in a context of high inflation and currency fluctuations .
-In addition, the obligation to register contracts with the AFIP (National Autonomous University of Madrid), now ARCA, was eliminated.
-That process had discouraged many landlords. Today, the market is more fluid , with more supply and prices that are moderating, and even decreasing in some neighborhoods in Buenos Aires. This greater flexibility has allowed tenants to have more options and negotiate more favorable terms .
"Today the market is more fluid, with more supply and prices that are moderating, and even decreasing in some neighborhoods of the City of Buenos Aires," says Abatti. DAVID FERNANDEZ/ AFV
– And what happens to the owners with this new reality?
– The rental market was revitalized. During the period in which Law 27,551 was in effect, many property owners withdrew their properties from the market due to the restrictions it imposed, especially the inability to adjust rents for inflation. Now, with the contractual freedom established by the DNU, properties that were for sale have returned to the rental market . This generated a large supply in some segments, which benefits tenants, who now have the ability to choose and negotiate prices. Faced with the prospect of having an unrented property, owners lower their terms and prices. For example, some property owners offer significant discounts to those who pay several months in advance , something that was previously prohibited by Article 1196 of the Civil Code (CyC), which was amended. This boosts the market and generates a virtuous cycle , as property owners can use that money for other investments.
-Despite the discounts, is this type of prepayment agreement beneficial for homeowners?
-Eliminating the ban on tenants paying more than one month in advance was key because many tenants prefer to pay several months or even a full year in exchange for a discount. This type of arrangement benefits both the tenant , who receives better terms, and the owner , who receives immediate income that can be reinvested.
–What happened with the eviction trials? It's an unresolved issue.
– Eviction proceedings are , unfortunately, a critical point in our system . Currently, an eviction for nonpayment can take up to a year in the City of Buenos Aires and more than a year and a half in the Province of Buenos Aires. This is unacceptable. Some provinces, such as Mendoza, have managed to streamline these processes thanks to more efficient procedural legislation, reducing the time to six months. It is essential to implement a reform in judicial procedures to make evictions more expeditious . It's like the insurance business: the higher the risk, the higher the value of the policy, and this leads to more guarantees being required from tenants and higher rents to protect the owner from the negative effects of a prolonged eviction proceedings. This would not only benefit owners but would also give greater confidence to the market in general , encouraging investment in the construction of rental properties.
"The rental market has been significantly revitalized," says Abatti. DAVID FERNANDEZ/ AFV
–What will happen to rental prices in the coming months?
– Today, we are seeing a trend toward shorter adjustments , every three or four months, in line with the Consumer Price Index (CPI) . This is because inflation has begun to moderate , dropping from monthly peaks of 15% to levels close to 3%. This new dynamic allows contracts to adapt more quickly to market conditions , which benefits both owners and tenants. However, for this stability to continue, it is crucial that the country maintain low and predictable inflation over the medium term .
–What other challenges are there to consolidating a more balanced market?
– One of the biggest challenges is improving legal security . Although the DNU brought significant progress, there are still outstanding issues, such as the regulation of the security deposit . While it is now possible to freely agree on amounts and methods of return, the decree does not establish how these deposits should be returned . This can lead to conflicts at the end of a contract, because previous legislation established that in residential rentals, the value of the last current rent should be returned, which is entirely fair. Another important issue is ensuring clarity in contracts . It is essential that they reflect the real condition of the property and detail responsibilities in case of repairs or changes in the consortium's services . All of this aims to build a more transparent and predictable market, where both owners and tenants can feel protected .
Legal security is essential for property owners to increase their investments in rental properties, especially now that many of them have access to money laundering dollars . If the government shows signs of seriousness in its promises, this will translate into the legal security necessary to encourage real estate investment in the country and prevent the exodus of capital abroad. Another important factor is to continue reducing inflation and maintaining it at a level compatible with developed countries , because this will attract foreign investors and encourage the repatriation of Argentine capital. The zero-currency emission policy should also be continued, the exchange rate restrictions should be repealed when the appropriate conditions are met, and the reduction of public spending should continue .
www.buysellba.com
Source:
Alquileres: un especialista adelanta lo que viene, precios, ajustes y los tiempos de los juicios de desalojo
En un mano a mano, Enrique Abatti, abogado especialista en Derecho Inmobiliario y presidente de la Cámara de Propietarios de la República Argentina, detalló los puntos claves que revitalizaron al mercado inmobiliario
www.lanacion.com.ar
March 03, 2025
In a one-on-one session, Enrique Abatti, a lawyer specializing in real estate law and president of the Chamber of Property Owners of the Argentine Republic, detailed the key points that revitalized the real estate market.
Enrique Abatti, lawyer specializing in real estate law and president of the Chamber of Property Owners of the Argentine RepublicDAVID FERNANDEZ/ AFV
The rental business changed almost overnight. The repeal of the rental law was a key turning point. Enrique Abatti, president of the Chamber of Property Owners of the Argentine Republic, is also a lawyer specializing in the real estate market who has followed the dynamics of rentals for almost 50 years and has written more than 66 books on the subject. Along with Drs. Ival Rocca Jr. and Enrique Abatti Jr., he is ready to go head-to-head with LA NACION and preview what's coming in a turbulent market .
– What fundamental changes did the Decree of Necessity and Urgency (DNU) bring about, repealing the rental law?
– The DNU established a Copernican change in rental matters . It has no precedent in Argentine legislation and few worldwide, as it grants unprecedented contractual freedom between parties . It marked a before and after in the rental market: one of the most significant was the elimination of the three-year minimum term for housing contracts, which had been a major obstacle for landlords. Now, contracts can be adapted to the needs of the parties, with shorter terms and more dynamic adjustments.
– Why did the rental law passed in 2020 fail?
– The biggest mistake was ignoring the country's economic reality . Imposing three-year contracts with annual adjustments in a context of inflation exceeding 240% per year was absurd . Landlords couldn't sustain those terms, resulting in a drastic reduction in supply. Another serious error was not allowing rents to be agreed in foreign currency . This, combined with the possibility of paying in pesos at the official exchange rate, created a huge gap between real costs and landlords' income.
-Contracts are currently adjusted every three months. Will this period be extended? What does it depend on?
-With the repeal of the law requiring landlords to maintain fixed rents for a year, the rental market tripled last year , as the parties now agree on the amounts and freely choose the adjustment rates and their frequency. As inflation continues to decline, these rates will move from quarterly to four-monthly, and then, likely, to semiannual, particularly benefiting those who want to rent, as they can now choose and negotiate prices, adjustments, and payment terms.
-There are no more waiting lists like there were a year ago.
They disappeared because rental prices have stabilized, even with constant-currency discounts of up to 20%, depending on the location of the properties. This also helped reduce the social tension caused by the repealed laws, which ultimately harmed tenants . The ban on paying rent in foreign currency was also lifted , allowing parties to agree to payments in dollars or euros, if desired, which is crucial in a context of high inflation and currency fluctuations .
-In addition, the obligation to register contracts with the AFIP (National Autonomous University of Madrid), now ARCA, was eliminated.
-That process had discouraged many landlords. Today, the market is more fluid , with more supply and prices that are moderating, and even decreasing in some neighborhoods in Buenos Aires. This greater flexibility has allowed tenants to have more options and negotiate more favorable terms .
"Today the market is more fluid, with more supply and prices that are moderating, and even decreasing in some neighborhoods of the City of Buenos Aires," says Abatti. DAVID FERNANDEZ/ AFV
– And what happens to the owners with this new reality?
– The rental market was revitalized. During the period in which Law 27,551 was in effect, many property owners withdrew their properties from the market due to the restrictions it imposed, especially the inability to adjust rents for inflation. Now, with the contractual freedom established by the DNU, properties that were for sale have returned to the rental market . This generated a large supply in some segments, which benefits tenants, who now have the ability to choose and negotiate prices. Faced with the prospect of having an unrented property, owners lower their terms and prices. For example, some property owners offer significant discounts to those who pay several months in advance , something that was previously prohibited by Article 1196 of the Civil Code (CyC), which was amended. This boosts the market and generates a virtuous cycle , as property owners can use that money for other investments.
-Despite the discounts, is this type of prepayment agreement beneficial for homeowners?
-Eliminating the ban on tenants paying more than one month in advance was key because many tenants prefer to pay several months or even a full year in exchange for a discount. This type of arrangement benefits both the tenant , who receives better terms, and the owner , who receives immediate income that can be reinvested.
–What happened with the eviction trials? It's an unresolved issue.
– Eviction proceedings are , unfortunately, a critical point in our system . Currently, an eviction for nonpayment can take up to a year in the City of Buenos Aires and more than a year and a half in the Province of Buenos Aires. This is unacceptable. Some provinces, such as Mendoza, have managed to streamline these processes thanks to more efficient procedural legislation, reducing the time to six months. It is essential to implement a reform in judicial procedures to make evictions more expeditious . It's like the insurance business: the higher the risk, the higher the value of the policy, and this leads to more guarantees being required from tenants and higher rents to protect the owner from the negative effects of a prolonged eviction proceedings. This would not only benefit owners but would also give greater confidence to the market in general , encouraging investment in the construction of rental properties.
"The rental market has been significantly revitalized," says Abatti. DAVID FERNANDEZ/ AFV
–What will happen to rental prices in the coming months?
– Today, we are seeing a trend toward shorter adjustments , every three or four months, in line with the Consumer Price Index (CPI) . This is because inflation has begun to moderate , dropping from monthly peaks of 15% to levels close to 3%. This new dynamic allows contracts to adapt more quickly to market conditions , which benefits both owners and tenants. However, for this stability to continue, it is crucial that the country maintain low and predictable inflation over the medium term .
–What other challenges are there to consolidating a more balanced market?
– One of the biggest challenges is improving legal security . Although the DNU brought significant progress, there are still outstanding issues, such as the regulation of the security deposit . While it is now possible to freely agree on amounts and methods of return, the decree does not establish how these deposits should be returned . This can lead to conflicts at the end of a contract, because previous legislation established that in residential rentals, the value of the last current rent should be returned, which is entirely fair. Another important issue is ensuring clarity in contracts . It is essential that they reflect the real condition of the property and detail responsibilities in case of repairs or changes in the consortium's services . All of this aims to build a more transparent and predictable market, where both owners and tenants can feel protected .
Legal security is essential for property owners to increase their investments in rental properties, especially now that many of them have access to money laundering dollars . If the government shows signs of seriousness in its promises, this will translate into the legal security necessary to encourage real estate investment in the country and prevent the exodus of capital abroad. Another important factor is to continue reducing inflation and maintaining it at a level compatible with developed countries , because this will attract foreign investors and encourage the repatriation of Argentine capital. The zero-currency emission policy should also be continued, the exchange rate restrictions should be repealed when the appropriate conditions are met, and the reduction of public spending should continue .
www.buysellba.com
