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Rentals: What owners should look for to know if a property that is a “family asset” can be the tenant’s guarantee - La Nacion Propiedades
Source:
www.lanacion.com.ar
November 01, 2024
A group of notaries from the City of Buenos Aires proposes a little-known option that is convenient for both owners and tenants
By Candle Contreras
One of the most difficult requirements to meet when wanting to rent a property is to have a guarantee that the owner accepts.
Amid a changing and complex context in the Argentine real estate market , with the boom in mortgage loans and the increase in property values, the rental situation was not left behind : after President Javier Milei repealed the rental law on December 29, 2023, through a Decree of Necessity and Urgency (DNU), the rules of the game were changed : contracts began to be signed under contractual freedom , with a predominance of two-year agreements , with adjustments every three or four months and increases due to inflation .
Despite these changes, there is one requirement that tends to be one of the most difficult to meet when submitting the necessary documentation to rent : the guarantee to avoid surprises in the event of breach of contract . Until its repeal, the rental law established that the tenant had to propose two guarantee options to the owner and that the landlord had to choose only one. For example, these could be a property guarantee, a pay slip and a surety bond. Now this requirement is subject to free agreement between the parties .
The traditional and most common way is for a person to become a guarantor by offering a property as collateral , but when that property is affected by the housing protection regime , better known as "family property" , it is usually rejected , unless it is removed in order to sign the lease agreement.
Given this situation, there is a little-known alternative that offers solutions to this problem : the possibility of using a property that is affected by the housing protection regime (former family property) without having to de-affect it and which is beneficial for all parties .
“The concept of ‘ family property ’ was given that name by Law 14,394 of 1954. However, it was repealed in 2015 and the system was replaced by a similar one that was incorporated into the Civil and Commercial Code of the Nation under the name of ‘ housing protection ,'” explains Mariano Esper, a lawyer specializing in the real estate market.
One of the biggest problems when renting is having a guarantee that all parties accept. Fabian Marelli
What does it mean to be affected by the housing protection regime ? It is a key tool when it comes to protecting property against possible seizures . That is, if a person is the owner of a family asset, the property cannot be taken away from them due to outstanding debts .
However, for the property to be considered within this legal framework, it must meet a series of requirements : the property must be intended for family housing , meaning it cannot be used for commercial or rental purposes; furthermore, only one property can be owned by each person and it must be the main residence .
However , there are cases in which this protection does not apply , such as: debts that directly affect the property such as taxes and fees, expenses, mortgages or construction loans. But it is also necessary to clarify that in the event that the owner has debts for child support obligations, he will have to respond for these debts with the property .
That is to say, a declaration must be drawn up declaring the landlord's inapplicability so that he is exempt from non-embargo for debts , and therefore, "he is the only one who can attack it." This means that the protection is not cancelled but it becomes ineffective against certain people, in this case the landlord. "Although this declaration can also be made in the lease contract itself in a valid manner ," adds the notary Nicolás Chejanovich.
“When a property is offered as a guarantee for a rental, it is always best if it is free of all encumbrances and restrictions and is not affected by the housing regime,” says Esper. However, in the case where the property appears to be affected by the housing regime , “we agree with Chejanovich that the parties (lessor and guarantor) can include in the contract a clause declaring that the affectation of that property to the housing regime does not affect the lessor,” he adds. That is, “ the property remains registered as affected by the housing regime, but that regime does not apply to the lessor .”
The housing or "family property" protection regime is a key tool when it comes to protecting property against possible seizures.
Notaries agree that there are several advantages, such as:
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Source:
Alquileres: qué deben mirar los dueños para saber si una propiedad que es “bien de familia” puede ser la garantía del inquilino
Un grupo de escribanas de la Ciudad de Buenos Aires propone una opción poco conocida que le conviene tanto a propietarios como a inquilinos
www.lanacion.com.ar
November 01, 2024
A group of notaries from the City of Buenos Aires proposes a little-known option that is convenient for both owners and tenants
By Candle Contreras
One of the most difficult requirements to meet when wanting to rent a property is to have a guarantee that the owner accepts.
Amid a changing and complex context in the Argentine real estate market , with the boom in mortgage loans and the increase in property values, the rental situation was not left behind : after President Javier Milei repealed the rental law on December 29, 2023, through a Decree of Necessity and Urgency (DNU), the rules of the game were changed : contracts began to be signed under contractual freedom , with a predominance of two-year agreements , with adjustments every three or four months and increases due to inflation .
Despite these changes, there is one requirement that tends to be one of the most difficult to meet when submitting the necessary documentation to rent : the guarantee to avoid surprises in the event of breach of contract . Until its repeal, the rental law established that the tenant had to propose two guarantee options to the owner and that the landlord had to choose only one. For example, these could be a property guarantee, a pay slip and a surety bond. Now this requirement is subject to free agreement between the parties .
The traditional and most common way is for a person to become a guarantor by offering a property as collateral , but when that property is affected by the housing protection regime , better known as "family property" , it is usually rejected , unless it is removed in order to sign the lease agreement.
Given this situation, there is a little-known alternative that offers solutions to this problem : the possibility of using a property that is affected by the housing protection regime (former family property) without having to de-affect it and which is beneficial for all parties .
“The concept of ‘ family property ’ was given that name by Law 14,394 of 1954. However, it was repealed in 2015 and the system was replaced by a similar one that was incorporated into the Civil and Commercial Code of the Nation under the name of ‘ housing protection ,'” explains Mariano Esper, a lawyer specializing in the real estate market.
One of the biggest problems when renting is having a guarantee that all parties accept. Fabian Marelli
What does it mean to be affected by the housing protection regime ? It is a key tool when it comes to protecting property against possible seizures . That is, if a person is the owner of a family asset, the property cannot be taken away from them due to outstanding debts .
However, for the property to be considered within this legal framework, it must meet a series of requirements : the property must be intended for family housing , meaning it cannot be used for commercial or rental purposes; furthermore, only one property can be owned by each person and it must be the main residence .
However , there are cases in which this protection does not apply , such as: debts that directly affect the property such as taxes and fees, expenses, mortgages or construction loans. But it is also necessary to clarify that in the event that the owner has debts for child support obligations, he will have to respond for these debts with the property .
Using a property that is a “family asset” as a guarantee for rent
"It is a statement by the owner of the property that is affected by the protection, through a deed, where he/she states that he/she will not oppose this protection against any claim , judicial or extrajudicial, for the lease contract that it guarantees ," explains the notary Magdalena Tato, secretary of the College of Notaries of the City of Buenos Aires.That is to say, a declaration must be drawn up declaring the landlord's inapplicability so that he is exempt from non-embargo for debts , and therefore, "he is the only one who can attack it." This means that the protection is not cancelled but it becomes ineffective against certain people, in this case the landlord. "Although this declaration can also be made in the lease contract itself in a valid manner ," adds the notary Nicolás Chejanovich.
“When a property is offered as a guarantee for a rental, it is always best if it is free of all encumbrances and restrictions and is not affected by the housing regime,” says Esper. However, in the case where the property appears to be affected by the housing regime , “we agree with Chejanovich that the parties (lessor and guarantor) can include in the contract a clause declaring that the affectation of that property to the housing regime does not affect the lessor,” he adds. That is, “ the property remains registered as affected by the housing regime, but that regime does not apply to the lessor .”
The housing or "family property" protection regime is a key tool when it comes to protecting property against possible seizures.
Who does it benefit?
This alternative covers cases in which a person wants to be a guarantor , but the property they own is affected by the housing protection regime . “It is very common that a child wants to live alone, the only guarantee they can offer is their parents’ house, and the problem arises, because for that they must de-affect and the property is left unprotected,” says the notary Vanesa Sepliarsky. So, with this option , “ it is not necessary to de-affect the Housing Protection Regime .”Notaries agree that there are several advantages, such as:
- The owner of the property avoids losing the protection of the property of which he is the owner . “Because by doing the declassification, even if it affects the property again later, a gap is created through which other creditors can enter and attack the property. Meanwhile, the tenant obtains the guarantee he needs to access the property.”
- It is also a benefit for the landlord himself "because it is guaranteed, with the continued protection of the property given as collateral, that no other creditor will be able to collect from that property, only him if necessary. Although it is also beneficial for real estate agencies because it increases the number of properties that can be offered as collateral for compliance in lease contracts."
What are the requirements to start the process?
According to the data shared by the College of Notaries, the requirements to be able to use a property that is a “family asset” as a guarantee for a rental are the following:- The declaration of inapplicability must be granted by means of a statement of manifestation , in a public deed.
- Identify the asset that is protected and the data on the impact on the housing protection regime
- The obligation contracted against which the affectation will be unenforceable and the creditor must be identified.
- Request the declarant's inhibition report and the property ownership report from the Real Estate Property Registry
- Have spousal or cohabitation consent , if applicable
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