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Rentals: Daily doubts while the Congress discuss the law - La Nación Propiedades
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www.lanacion.com.ar
October 03, 2023
Rentals: who must pay the ABL, take charge of the arrangements and when the contract can be terminated.
In the midst of the discussion in Congress, daily doubts arise in the relationship between the landlord and the tenant.
By Candelaria Reinoso Taccone
Who should be in charge of the arrangements, one of the main issues of conflict between owners and tenants.
The rental law passed in July 2020 triggered a housing crisis. By extending contracts from two to three years and allowing a single annual update in an inflationary context, there was a shortage in the supply of apartments that, in a context of high demand, skyrocketed prices. The dilemma that has already been installed on the legislative agenda is advancing with possible reforms in Congress.
The opposition proposal, which had obtained half a sanction in Deputies, proposed returning to two-year lease contracts with updates every four months based on the index freely agreed between owners and tenants. However, senators from the Frente de Todos decided to make modifications and, finally, the Senate agreed to make changes to the project to modify the rental law.
The Senate returned the project to modify the rental law to the Chamber of Deputies with changes.
The next steps to change the law involve returning the bill to the lower house. There are two possibilities: if Deputies accept the Senate's modifications, the project becomes law. If they insist on their original version, they will need a majority equal to or greater than that of the Senate for it to become law; otherwise, the Senate version is approved.
In the midst of this context of uncertainty, regulations can give rise to some more everyday doubts, such as: Who is responsible for paying the ABL? How is the security deposit handled? Who assumes responsibility for paying for repairs to the unit? Below is a detail of the fine print of each of these topics.
1) Who should be in charge of the arrangements
In non-urgent cases, the owner has 10 days to make repairs.
Current law establishes that the landlord must be responsible for any repairs to the property that are not the responsibility of the tenant. It also allows the tenant to make urgent repairs at the landlord's expense if the landlord does not respond after 24 hours' notice. In cases of non-urgent issues, the landlord has 10 days to make the repairs, and the tenant can offset the cost with rent payments. These points are some of the ones that bring the most conflicts to the relationship between the landlord and the tenant. In fact, some experts warn of possible abuse by tenants and suggest that landlords put agreements in the lease to deduct the cost of repairs from rent for several months as a financial precaution.
Furthermore, the law establishes that the value of the guarantee cannot exceed the equivalent of five months' rent, which may be insufficient considering the prolonged time of an eviction trial in the event of non-compliance. These provisions raise concerns among owners and experts suggest that they avoid signing the ad referendum reservation for the presentation of the guarantee so as not to be forced to accept an option with which they do not feel comfortable.
Another option that may reassure landlords is to know that, in the context of residential rental contracts, these public order agreements are binding between the landlord and the tenant, but have no effect on third parties, such as a guarantor or a friend of the tenant. “In these cases, said third parties have the possibility of increasing the deposit, and this practice is fully supported by the law,” says Enrique Abatti, lawyer specializing in Real Estate Law and president of the Chamber of Property Owners of the Argentine Republic. This provision has an undeniable logical basis. "Let's consider a concrete example: if a tenant signs a rental contract for 100,000 pesos per month and, due to some eventuality, causes damage to expensive equipment, such as an air conditioner valued between 300,000 and 400,000 pesos, it is evident that the increase in the deposit will be justifies it completely,” explains Abatti.
If the tenant gives three months' notice that they will leave the property, they do not have to pay a fine.
According to current law, after six months from the beginning of the contract, the tenant can terminate it without cause. If the termination is for cause and the landlord does not respond after being notified, the tenant does not need to wait six months or give advance notice, and does not have to pay a fine. In addition, he can claim the deposit back and request a discount on the rent for the time he lived in the property inappropriately.
The rule also establishes that, if the tenant gives three months' notice that they will leave the property, they do not have to pay a fine. If he gives one month's notice and the contract is between six months and a year, he must pay one and a half months' rent; If the first 12 months have passed, the fine is only one month. These changes benefit tenants by eliminating penalties and fines in contracts that are valid for more than six months and with advance notice.
According to the current regulatory framework, landlords can only request an advance equivalent to the first month's rent and a deposit of the same value. This deposit must be returned at the same price as the last month's rent or proportionally if a deposit of less than one month was made. The contract must be declared before the AFIP by the landlord, and failure to comply with this regulation entails sanctions.
The recommendation of experts is to make a document when handing over the keys that describes the conditions for the return of the deposit. The refund must be made when the keys are returned. In case of problems, the Ombudsman's Office provides legal advice and access to mediations and conciliations for tenants through 0800-999-3722 or atencioninquilinos@defensoria.org.ar.
The tenant must only be responsible for the expenses derived from regular expenses, such as the lighting, sweeping and cleaning fee (ABL).
Before the entry into force of the new rental law, the tenant was not obliged to pay charges and contributions, unless established in the contract. However, since July 2020, the law modified this aspect, establishing that the tenant is responsible for paying the charges and contributions related to the use of the rented property (water, internet, electricity, gas, etc.). However, the tenant must not assume the expenses related to the charges that burden the property or extraordinary common expenses. In summary, the tenant only has to take care of the expenses derived from common expenses, such as the lighting, sweeping and cleaning fee (ABL), while the property tax is the responsibility of the owner.
By Candelaria Reinoso Taccone
Source:
Alquileres: quién debe pagar el ABL, hacerse cargo de los arreglos y cuándo se puede rescindir el contrato
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www.lanacion.com.ar
October 03, 2023
Rentals: who must pay the ABL, take charge of the arrangements and when the contract can be terminated.
In the midst of the discussion in Congress, daily doubts arise in the relationship between the landlord and the tenant.
By Candelaria Reinoso Taccone
Who should be in charge of the arrangements, one of the main issues of conflict between owners and tenants.
The rental law passed in July 2020 triggered a housing crisis. By extending contracts from two to three years and allowing a single annual update in an inflationary context, there was a shortage in the supply of apartments that, in a context of high demand, skyrocketed prices. The dilemma that has already been installed on the legislative agenda is advancing with possible reforms in Congress.
The opposition proposal, which had obtained half a sanction in Deputies, proposed returning to two-year lease contracts with updates every four months based on the index freely agreed between owners and tenants. However, senators from the Frente de Todos decided to make modifications and, finally, the Senate agreed to make changes to the project to modify the rental law.
The Senate returned the project to modify the rental law to the Chamber of Deputies with changes.
The next steps to change the law involve returning the bill to the lower house. There are two possibilities: if Deputies accept the Senate's modifications, the project becomes law. If they insist on their original version, they will need a majority equal to or greater than that of the Senate for it to become law; otherwise, the Senate version is approved.
In the midst of this context of uncertainty, regulations can give rise to some more everyday doubts, such as: Who is responsible for paying the ABL? How is the security deposit handled? Who assumes responsibility for paying for repairs to the unit? Below is a detail of the fine print of each of these topics.
1) Who should be in charge of the arrangements
In non-urgent cases, the owner has 10 days to make repairs.
Current law establishes that the landlord must be responsible for any repairs to the property that are not the responsibility of the tenant. It also allows the tenant to make urgent repairs at the landlord's expense if the landlord does not respond after 24 hours' notice. In cases of non-urgent issues, the landlord has 10 days to make the repairs, and the tenant can offset the cost with rent payments. These points are some of the ones that bring the most conflicts to the relationship between the landlord and the tenant. In fact, some experts warn of possible abuse by tenants and suggest that landlords put agreements in the lease to deduct the cost of repairs from rent for several months as a financial precaution.
2) How to handle the warranty issue
Landlords feel insecure due to the greater variety of options allowed: bank guarantees, surety insurance and personal guarantees of the tenant, which can be documented with pay stubs or income certificates. The problem is that the law forces the owner to accept one of the two options that the tenant presents, which some consider limiting and impractical in a dynamic market.Furthermore, the law establishes that the value of the guarantee cannot exceed the equivalent of five months' rent, which may be insufficient considering the prolonged time of an eviction trial in the event of non-compliance. These provisions raise concerns among owners and experts suggest that they avoid signing the ad referendum reservation for the presentation of the guarantee so as not to be forced to accept an option with which they do not feel comfortable.
Another option that may reassure landlords is to know that, in the context of residential rental contracts, these public order agreements are binding between the landlord and the tenant, but have no effect on third parties, such as a guarantor or a friend of the tenant. “In these cases, said third parties have the possibility of increasing the deposit, and this practice is fully supported by the law,” says Enrique Abatti, lawyer specializing in Real Estate Law and president of the Chamber of Property Owners of the Argentine Republic. This provision has an undeniable logical basis. "Let's consider a concrete example: if a tenant signs a rental contract for 100,000 pesos per month and, due to some eventuality, causes damage to expensive equipment, such as an air conditioner valued between 300,000 and 400,000 pesos, it is evident that the increase in the deposit will be justifies it completely,” explains Abatti.
3) How can I terminate a contract
If the tenant gives three months' notice that they will leave the property, they do not have to pay a fine.
According to current law, after six months from the beginning of the contract, the tenant can terminate it without cause. If the termination is for cause and the landlord does not respond after being notified, the tenant does not need to wait six months or give advance notice, and does not have to pay a fine. In addition, he can claim the deposit back and request a discount on the rent for the time he lived in the property inappropriately.
The rule also establishes that, if the tenant gives three months' notice that they will leave the property, they do not have to pay a fine. If he gives one month's notice and the contract is between six months and a year, he must pay one and a half months' rent; If the first 12 months have passed, the fine is only one month. These changes benefit tenants by eliminating penalties and fines in contracts that are valid for more than six months and with advance notice.
4) How much should the deposit be?
According to the current regulatory framework, landlords can only request an advance equivalent to the first month's rent and a deposit of the same value. This deposit must be returned at the same price as the last month's rent or proportionally if a deposit of less than one month was made. The contract must be declared before the AFIP by the landlord, and failure to comply with this regulation entails sanctions.
The recommendation of experts is to make a document when handing over the keys that describes the conditions for the return of the deposit. The refund must be made when the keys are returned. In case of problems, the Ombudsman's Office provides legal advice and access to mediations and conciliations for tenants through 0800-999-3722 or atencioninquilinos@defensoria.org.ar.
5) Who must pay the ABL
The tenant must only be responsible for the expenses derived from regular expenses, such as the lighting, sweeping and cleaning fee (ABL).
Before the entry into force of the new rental law, the tenant was not obliged to pay charges and contributions, unless established in the contract. However, since July 2020, the law modified this aspect, establishing that the tenant is responsible for paying the charges and contributions related to the use of the rented property (water, internet, electricity, gas, etc.). However, the tenant must not assume the expenses related to the charges that burden the property or extraordinary common expenses. In summary, the tenant only has to take care of the expenses derived from common expenses, such as the lighting, sweeping and cleaning fee (ABL), while the property tax is the responsibility of the owner.
By Candelaria Reinoso Taccone
