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Rentals: What happens with each contract according to the date it was signed - La Nacion Propiedades
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Alquileres: qué pasa con cada contrato según la fecha en la que fue firmado
Hoy conviven en el mercado inmobiliario tres tipos de alquileres: los que se actualizan una vez al año por ICL, los que aumentan cada seis meses por Casa Propia y los que se acuerdan libremente a partir del DNU de Milei
www.lanacion.com.ar
January 17, 2024
Today three types of rentals coexist in the real estate market: those that are updated once a year by ICL, those that increase every six months by Casa Propia and those that are freely agreed upon based on the Milei DNU.
By Candela Contreras
The keys to the contracts signed in the last three years and what the new ones are like from Javier Milei's DNU
Since the entry into force of the Decree of Necessity and Urgency (DNU) signed by President Javier Milei on December 29, 2023 and which among its points establishes the repeal of the Rental Law 27,737 , many tenants began to wonder what is happening with contracts signed before that date.
As of the implementation of the DNU, housing rental contracts returned to the terms established under the Civil and Commercial Code as before June 2020, with some modifications introduced. But, all those that were signed before the DNU under the regulations that were in force and due to the non-retroactivity of the law must maintain the conditions under which they were signed until they end, whether by termination or termination.
There is the possibility of extending current contracts for up to 20 years and for increases to be agreed between tenant and owner.
Therefore, the DNU does not affect contracts signed under the rental law, both the one enacted in July 2020 (27,551), and its modification on October 18, 2023 (27,737). Since the DNU came into effect, freedom between the parties to make agreements in contracts prevails.
Year by year: What is the situation of each contract until its end
Now, tenants and owners will be divided for a long time between those who have contracts under the 2020 law , those who have contracts under the law with changes from 2023 and those who sign them after the officialization of the DNU under the new conditions of the Civil Code and Commercial.
Those contracts that are under the previous standard (27,551 or its modified 27,737) when they expire have two alternatives : extend or start a new one with the new conditions. In the meantime, they are valid until completion.
Repealed, the rental law became ineffective and freedom between the parties now prevails.
Below what happens with each of the contracts according to the moment in which they were signed
- Contracts signed before July 2020 - the date on which the law that extended the term from two to three years and the annual adjustment by ICL came into effect - : before July 2020, two-year agreements were established with staggered amounts governed by the Civil and Commercial Code. The last ones under this modality ended in June 2022. Those who carried out an extension continue to maintain the conditions of a two-year term and updates agreed upon between the parties, generally semiannual.
- Contracts signed from July 1, 2020 to December of the same year : on this date the law began to take effect, extending the minimum term from two years to three years, establishing the annual adjustment under the Lease Contract Index ( ICL) published by the Central Bank, made up in equal parts of the monthly variations of the consumer price index (CPI) and the average taxable remuneration of stable workers (RIPTE), which is a salary index. In these cases, the contracts ended between July and December of last year as long as no extension was made. Therefore, if the tenant signed a new contract in the last four days of last year - already with the Milei DNU in force on December 28 - he could have established a free agreement between the parties. While those that expired between July and October 17, it is most likely that they will have a new contract with the same conditions within three years: that is, they will expire, depending on the case, between July and mid-October 2026.
- Contracts that were signed in 2021 : as in the previous point, the agreements are for three years with annual adjustment under the ICL. These are still in force and this year they will go through the last annual increase in the contract.
- Contracts established in 2022 : in this case they are in the second year of the agreement and will end in 2025. They were also signed with the first law, so the price adjustment is annual and is established under the ICL.
- Contracts signed from January 2023 to October 17 of the same year: they are the last agreements established under the conditions of the first law. This year they will go through the first annual increase under the ICL, and it will only end in 2026. Without a doubt, it is the group of tenants that benefit the most in an economic context with annual inflation that last year exceeded 210%.
- Contracts signed from October 18 to December 28, 2023. This last date is from which the last modification was made to the law that expired when the DNU came into force. In these cases, what was proposed in the contracts was that the adjustments would be semiannual under the Casa Propia index (no longer the annual ICL) and the duration of three years was maintained, which is why they will only expire between October and December 2026. Another point to keep in mind is that tenants will only receive the first adjustment with this new index in April.
- Contracts signed as of December 29, 2023 with the implementation of the DNU : the agreements are once again under the Civil and Commercial Code with absolute freedom between the parties. The term of the contracts will be the one that the parties have established , there is no minimum legal term, but if they do not clarify it, it will be two years. In addition, they may arrange the adjustment of the value of the rents and the use of any index, public or private, expressed in the same currency in which the rents were agreed will be valid. They will also be able to agree on how often to update the contract.
The extension shortcut
Up to this point, the agreements established at any given time from 2020 to the present, but “there is the option of making extensions, through which the conditions of an agreement can be maintained for up to 20 years ,” analyzes Enrique Abatti, president of the Chamber of Owners of the Argentine Republic. This is a tool that allows maintaining the initially agreed conditions even if a new law is passed or, as in the last case, the Civil and Commercial Code is applied, and it can be used when the property and the parties are the same, therefore that in case of changing tenant or property, a new contract must be started with the guidelines of the decree.Currently, three types of contracts are in force at the same time.
Mostly, the owners decided to make extensions to the contracts to “dodge” the rental law and maintain the rules of the initial contract, if it was signed before the sanction of rule 27,551 of July 2020 , to continue the previous period of two years, the agreement between time parties and adjustment modes, among others.
"But now, with the application of this DNU that poses new conditions of absolute freedom, it is highly probable that the owners will no longer resort to the extension tool but will opt to make a new contract under new guidelines," says Enrique Abatti, lawyer and president of the Chamber of Property Owners of Argentina.
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