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Renting after Milei's deregulation: Costs and steps to take into account when signing a new contract - Infobae
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Alquilar después de la desregulación de Milei: costos y pasos que hay que tener en cuenta a la hora de firmar un nuevo contrato
Los valores medios en CABA y en la provincia de Buenos Aires aumentaron 120% en los últimos 12 meses. Recomendaciones de los operadores inmobiliarios
www.infobae.com
July 7, 2024
Average values in CABA and the province of Buenos Aires increased by 120% in the last 12 months. Recommendations from real estate operators
By Jose Luis Cieri
A survey by Inquilinos Agrupados revealed that 30% of tenants contracted debts in order to pay the rent monthly (Illustrative Image Infobae)
Signing a rental contract in CABA or in the province of Buenos Aires implies facing initial costs that exceed $1,000,000 for tenants, increasing 120% in the last 12 months, on average, well below the inflation rate .
However, a survey by Inquilinos Agrupados revealed that 30% of tenants went into debt to be able to pay their monthly rent. Added to this is the impact of rising prices to maintain a home (expenses rose more than 200% year-on-year) and income, although it has begun to recover, remains far behind.
Although both economic decouplings are now slowing down, a favorable factor compared to seven months ago is that demand has greater supply after DNU 70, which repealed the Rental Law .
The costs associated with the contract also complicate the situation for those who manage to rent. In the case of a lease of $300,000 per month, which could correspond to a two- or three-room apartment, depending on the area, the initial values become significant.
To sign a two-year contract, with free adjustment between parties, usually quarterly or four-monthly due to the variation in the Consumer Price Index (CPI) and the Lease Contract Index (ICL) in CABA, a tenant or family must deposit $300,000 and another $300,000 as a month's advance, as an example.
Daniel Bryn , founder of Monitor Inmobiliario and partner of Zipcode, made a model for a contract in CABA or province for a property to be rented at $449,915 per month. He told Infobae that, in the absence of two guarantors, “ the tenant must opt for a surety bond for 24 months (the 2 years that the contract lasts) for $539,898; in addition, he must pay the commission, especially in the province of Buenos Aires (for that amount it is $215,960 at the signing). While in CABA, no real estate commission is paid.”
Source: Monitor Inmobiliario. Examples of contracts at the current date
In CABA, the situation of tenants is significantly different from that of the province due to current legislation. Since August 24, 2017, Law 5,859 stipulates in its Article 2 that it is prohibited to charge real estate commissions to tenants in the leasing of properties for residential purposes.
“In addition, Article 4 establishes that the landlord can only be charged a maximum of 4.15% of the total contract amount. This regulation implies that tenants are only required to pay the deposit, which is usually one month's rent, and the first month's rent. If a financial guarantee or surety bond is required, the additional costs may vary,” clarified Alberto Héctor Loyarte , Real Estate expert and real estate broker.
On the other side of the Riachuelo or General Paz Avenue, in the province of Buenos Aires, the situation is different. The law that regulates real estate activity allows charging 2% to both the tenant and the owner, or 4% to one of the parties as agreed.
Loyarte added: “This difference in legislation creates a significant disparity in the financial burdens that tenants must assume, making the experience of renting much more onerous in the province than in the city.”
According to Loyarte, “these costs, although lower compared to the province, still represent an additional expense that must be considered by tenants when renting a home.”
In the province of Buenos Aires, the tenant must cover all the costs of verifying the owner's guarantee and certifying the signatures at the notary's office. In addition, he usually takes charge of the 4% of fees established by law. "This situation poses an additional challenge for real estate agents, who must mediate to achieve a balanced and beneficial negotiation for both parties, something that the CABA legislator did not consider," added Loyarte.
Some suggestions
Some recommendations remain essential. For landlords , standard conditions include two months deposit and one month advance, with two-year contracts and quarterly adjustments based on the CPI, which is being closed more frequently lately.Bryn added: “Regarding guarantees, guarantees from CABA are generally accepted for apartments in that jurisdiction and from the province if they are outside the district. Surety bond insurance is a good alternative today, as it has proven to be quite reliable.”
It is advisable for landlords to take photos when signing the contract and attach them as an annex. Tenants must check the condition of all facilities, such as the water heater and boiler, days before signing (Illustrative Image Infobae)
An additional tip for landlords is to take photos of the condition of the property at the time of signing the contract and attach them as an attachment. This serves as a reference when the tenant returns it.
It is crucial that tenants present demonstrable income, the last three pay stubs, or an income tax return, and that reports be made on the properties offered as collateral.
Experts also suggest that landlords check tenants' credit history to avoid renting to someone who has a lot of bank and credit card debt.
For tenants, Bryn advised checking the condition of all the facilities, such as the electric water heater, gas water heater and boiler, days before signing the contract. It is important to make sure that everything works properly and, if something is broken or malfunctioning, to note it in the contract so that the owner can repair it before signing. In addition, it is always advisable to check the amount of the expenses and their details, to avoid surprises.
Currently, with contracts that are freely agreed upon between the parties, various adjustments can be applied during the term of the contract. However, specialists maintain that it is crucial that these adjustments are clearly recorded in writing to prevent future problems.
In the province
In order to make a rental contract responsibly, it is essential to consider some concepts that ensure the possibility of compliance. According to Mirta Líbera , president of the Real Estate Chamber of the province of Buenos Aires, the first step is to prove the necessary solvency to pay the agreed fee.This requires the presentation of receipts or proof of income, and the rent amount should represent between 25% and 30% of that income. In addition, there must always be a guarantor, either with their own income or a property guarantee.
In La Plata, as in other cities in Buenos Aires, the real estate commission for the new contract is usually paid by the tenants, although it can be shared between both parties who sign the agreement.
As for additional expenses, several important concepts must be considered. Tenants must pay the Stamp Tax, which is 0.5% of the total contract, with the exception that if the fiscal value is less than $1,700,000, the tax is zero. Fire and civil liability insurance must also be contracted, and the costs of reporting to the property registry must be covered if the guarantee is the owner and commercial reports such as Veraz or Nosis.
According to Líbera, due to the updates based on unknown future indices, the calculations of the fees are generally made based on the initial price of the contract, which gives a figure considerably lower than the total of the contract.
A security deposit is also usually required, which must be returned at the end of the contract. Due to inflation, it is common to request that this deposit be delivered in its equivalent in dollars, to protect its value and ensure its return or to comply with any pending obligation of the tenant.
To illustrate this, Líbera mentioned an example of a one-bedroom apartment rental costing $220,000 per month. The initial expenses, including the fee and security deposit, would be approximately equivalent to one and a half rents, that is, around $330,000 plus the security deposit. “In this case, the deposit would be $440,000 if it is a 24-month contract, which could also be represented by a promissory note for the amount of the contract,” he concluded.
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