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Rentals after the DNU: What contracts follow, how the new ones should be signed and who has to pay if there are damages - Infobae
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December 30, 2023
After the implementation of the economic deregulation decree, the housing rental sector is reconfigured. What requirements are needed for new agreements
By José Luis Cieri
In the midst of the difficulty in renting homes, there will now be more freedom to enter into contracts without so many regulations. Experts recommend getting good advice before signing (Illustrative image Infobae)
The Decree of Necessity and Urgency (DNU) of economic deregulation that Javier Milei signed days ago is now in force.
As part of this measure, the Rental Law ceases to apply, marking a significant change in housing agreements.
How will it affect the act of renting?
Landlords and tenants will have to consider the implications and adjustments in this new context of almost total deregulation.Important: Existing agreements under the law that ended this weekend will remain in effect until they expire.
The adjustments in the rental dynamics, promoted by the libertarian government, begin to take effect from this moment .
“Before signing, both parties must carefully review the conditions of the contract. Maybe with a lawyer who is an expert in real estate issues. It is crucial that the terms related to the rental, payments, duration and possible penalties are clearly specified,” Mariana Lucangeli , a Real Estate expert, recommended to Infobae.
Points to consider
The key points of the newly implemented legislation derived from the Decree of Necessity and Urgency (DNU) 70 of 2023 are highlighted below.When signing a rental agreement, it is crucial to focus on the duration and amount. It is advisable to ensure the following:
- The duration of the contract and whether it allows renewal.
- Early cancellation conditions.
- Initial rental amount, payment conditions and possible adjustments.
- Terms, deadline and late payment fees.
These aspects are essential to establish clarity and avoid possible complications during the contract period.
Contract Term: Now, the term of housing rental contracts is agreed upon by the parties without a legal minimum. If the term is not specified in the contract, it will be two years, instead of three as it was under the repealed regulations.
The term of the leases with any destination will be the one that the parties have established, according to article 1198 of the Civil and Commercial Code (CCyC).
Diana Sevitz , from the Training Institute (ICI) of the Argentine Real Estate Chamber, recommended that “it is vital that tenants carefully consider what they are going to sign, that they pay attention if the owner requires a deposit in dollars or euros, because now they can do even in cryptocurrencies.”
Real estate law specialists suggest that from now on it is essential to record all relevant aspects in the contract, ensuring that the wording is clear and precise. This will make it easier for both landlords and tenants to maintain a healthy relationship.
Requirements: the following are maintained to sign a contract; The tenant in CABA does not pay a real estate commission and in the province of Buenos Aires he pays 2% of the contract value.
While the owner pays the following: fee expenses in CABA of 4.15% of the total contract. Expenses for fees in the province they are 2% of the total value of the contract.
Guarantees from natural persons can be presented as up to the previous law. If there are two guarantors with financial solvency, without the need to resort to surety insurance or private guarantee, no additional expenses are incurred. However, if surety insurance is chosen, this cost for the tenant is equivalent to 5% of the contract value.
Rental Value Adjustment: The parties can freely agree on the adjustment of the rental value using any index, public or private, in the same currency of the contract.
Bond, guarantee and periodicity of payment: by article 1196 of the CCyC, the parties can freely determine the amounts and currency delivered as a deposit or guarantee deposit, and the way in which they will be returned at the end of the lease. The parties will freely agree on the frequency of payment, which may not be less than monthly.
“Now freedom is provided to establish the frequency of updating the contract, eliminating the previous minimum semi-annual requirement,” clarified Sevitz.
Taxes: The taxes that fall on the home (ABL, AGIP, real estate tax) will be the obligation of the tenants.
AFIP: It will no longer be mandatory to register contracts with this organization.
Expenses: for now, the ordinary expenses will be paid by the tenants while the extraordinary expenses should be paid by the owners. “This must be made clear in the agreement to avoid problems,” Sevitz said.
Who should pay for breaks
The DNU repeals the article of the previous Rental Law that authorized the tenant to deduct from the rent the cost of improvements or repairs made to the home, which is now subject to negotiations between the parties involved.Likewise, the new regulations establish that judges will lack the power to modify the agreements agreed in the contract. In other words, if a tenant intended to file a legal claim regarding any agreement stipulated in the lease, they would be prohibited from doing so.
This regulatory change generated a significant imbalance, since articles 1201 and 1202, which previously clearly established the responsibilities of the owner, were eliminated. Now, only articles 1206 and 1207 remain.
Article 1206 specifies that the tenant is responsible for maintaining and conserving the property, answering for any deterioration caused, even by occasional visitors, except for direct actions of the landlord or his dependents.
“Notably, this obligation of the tenant does not find a clear and exact counterpart for the landlord, unlike the previous regulations. The only reference that persists is found in article 1220 of the CCyC, located outside the chapter of Obligations of the lessor, which establishes that if the lessor does not comply with the obligation to preserve the property in adequate conditions for the agreed use and enjoyment, the lessee has the power to terminate the contract,” explained Mariano Esper, lawyer and professor specialized in real estate and business issues.
Therefore, there are provisions that can satisfy both landlords and tenants. Unlike the repealed law, the contract now has the freedom to autonomously establish who assumes the cost of eventual breakdowns or breakages. In the previous framework, responsibility fell largely on the owner, covering almost all deterioration situations.
Ordinary expenses must be paid by the tenant and extraordinary expenses by the owner, but the ideal is to leave everything in writing (Photo: Getty)
The article in question does not address the maintenance of the general condition of the property or its elements, such as artifacts and furniture owned by the landlord intended for the use of the tenant.
Most contracts prohibit the tenant from making improvements without written authorization from the owner, some modifications are made without prior notice
Alberto Loyarte, of Alberto Loyarte Servicios Inmobiliarios, said that “this scenario occurs, for example, when there is a lack of repair in a condominium apartment, and the consortium does not act due to lack of funds, harming the tenant. In such cases, the tenant may invest in solving the problem, such as purchasing an electric water heater to restore the hot water supply, generating costs that, in my opinion, should fall on the owner.”
Under previous legislation, in cases such as a heater breakdown, the cost of the repair was deducted from the rent or the corresponding reimbursement was agreed upon with the owner.
When the owner can complete a contract
There is a difference with previous legislation: now, the owner has the power to terminate a contract before its expiration. According to article 1219 of the CCyC, the landlord can terminate the contract for various reasons, including change of destination or irregular use, lack of conservation of the property, abandonment without leaving a substitute, or lack of agreed payment for two consecutive periods.Esper added: “A relevant change is the addition of subsection d), which allows the termination of the contract for any cause established in the agreement. This addition provides greater freedom to determine the reasons for which the owner can terminate the contract. By virtue of this change and considering article 1077 of the CCyC, which eliminates the minimum legal term, the contract can now stipulate that the landlord can terminate it at any time, even without cause, marking a contrast with the previous possibility, which was limited to the tenant and required payment of a fine for early termination of the contract.”
When can the tenant
The early termination of the rental contract by the tenant was previously governed by two specific situations:a) If the rented property was a property and six months had elapsed into the contract, the tenant could terminate the contract. If this option was exercised in the first year, he had to pay the landlord compensation equivalent to one and a half months' rent upon vacating the property, and one month if the option was exercised after said period.
b) In the cases contemplated in article 1199 [rents may be established in legal or foreign currency, at the free discretion of the parties; the tenant may not demand that payment be accepted in a currency other than that established in the contract], the tenant had to pay the landlord the equivalent of two months' rent.
“However, the viability of maintaining this clause is questioned, since the term agreements should be determined by mutual agreement between both parties. The DNU suggests resolving the issue based on the remaining term of the contract. Contract law states that contracts must be fulfilled, and the breaching party may be required to compensate the other party. The new text, according to article 1221, allows the tenant to terminate the contract at any time, paying 10% of the balance of the future rental fee, calculated from the date of notification of the termination until the end date agreed in the contract", Loyarte concluded.
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