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New rental law in Argentina
24/Jun/2020

NEW RENTAL LAW

Highlights:

 

  • The increase of the rent will be on an annual basis.

 

  • The index for the annual increase of rent prices will be an average of two indexes:

a) Consumer Price Index (Indice de Precios al Consumidor -IPC)

b) Average Taxable Salary of Stable Workers (Remuneración Imponible Promedio de los Trabajadores Estables - RIPTE).

Index will be published by the Central Bank of the Argentinian Republic -BCRA.

 

  • The minimum length of the rental lease will be for three years.

 

  • If the tenant notifies to the landlord, of an advanced resignation with 3 months in advance, there will be no penalty for the tenant.

 

  • It is forbidden by law now to require the tenant more than one month in advance for the initial rent payment.

 

  • The security deposit cannot be more than the equivalent to the first month of rent.

 

  • The reimbursement of the security deposit will be at the time of the restitution of the property and amount to the updated, equivalent to the last month of rent.

 

  • Tenants can do repairs and deduct the amounts from future rental payments, 24 hours after the landlord has been notified, if the landlord does not reply.

 

  • The landlord will be responsible for tax payments of ABL & ARBA and also the extraordinary condo fees. (ABL, Tax to cover street light and street sweeping and ARBA, a tax for the property)

 

  • Condo fees: the ordinary must be paid by the tenant and the extraordinary by the landlord.

 

  • It is mandatory for all landlords to accept any of the following proposals:
    • Property ownership deed.
    • Bank guarantee.
    • Security bond.
    • Joint guarantor.

 

  • Renewal of the contract: The landlord must inform the tenant, three months in advance, if the lease will be renewed and the conditions for the new contract. 

 

  • Landlords must declare the leases to the Tax Authorities (Administración Federal de Ingresos Públicos de la Nación- AFIP).

 

 

Previous Law

New Law

Increase

  • Usual practice between 15 to 20% per each six months year.
  • Leases in dollars without increase.

It will be an average of two indexes: 

  1. Consumer price index , Indice de Precios al Consumidor (IPC)      
  2. Average Taxable Salary of Stable Workers, Remuneración Imponible Promedio de los Trabajadores Estables (RIPTE).

Prices which will be monthly published by BCRA (Central Bank of the Argentinian Republic).

 

Increase period

Each 6 months period.

 

Annual basis.

 

Minimum lenght of the lease

2 years.

3 years.

 

Break lease by tenant

 

If the tenant would choose to break the lease before its expiration, a penalty of the equivalent to 1.5 month must be paid, if it takes place during the first year. Only 1 month if after.

 

If tenant notifies the landlord at least 3 months in advance, there will be no penalty.

Lease Renewal notification

The landlord did not have the obligation to notify the tenant that he/she intends to renew the lease and its conditions.

If landlord pretends to renew the lease, it is mandatory for the landlord to inform the tenant at least 3 months in advance and its conditions.

 

Advanced rent payments

It was usual practice to request one month in advance but could vary depending on landlord.

It is mandatory not to require more than one month in advance for the initial payment.

Security deposit

  • One month per year of rent. As the lease was for 2 years, 2 months were requested.
  • The landlord used to have between 30 to 90 days to return the security deposit, since the restitution of the property.
  • The landlord was supposed to return the same amount received when the lease was signed, in the same currency and without any update.

 

  • Only one month of the first rent month, must be required to the tenant.
  • The landlord must reimburse the equivalent of one month of the last rent period (updated).

 

Tax payments

Tenants were required to pay:

  1. ABL – Tax to cover street light and street sweeping.
  2. ARBA which was a mandatory landlord’s obligation but was usually charged to the tenant.

 

ABL and ARBA taxes are now the responsibility and must be paid by the landlord.

Condo fees

It was unclear that the landlords used to pay for extraordinary condo fees and tenants only had to pay ordinary condo fees, though, sometimes both were in charge of the tenants.

It is clearly stated that tenants must only pay for ordinary condo fees. Landlord is responsible for extraordinary fees.

 

Warranty

It was usual practice to require as guarantee only a property of a direct relative of the tenant. Some realtors were flexible in accepting security bond and employers guarantee if expats were the tenants.

It is now mandatory for all landlords to accept any of the following proposals:

  • Property ownership deed.
  • Bank guarantee.
  • Security bond.
  • Joint guarantor.

 

Repairs

Most of the times, landlords didn’t take any action of the repairs.

Tenants can do the repairs and deduct the amounts from future rental payments, 24 hours after the landlord has been notified if the landlord does not reply.

Legal aspects

Most leases were not declared to the Tax Authorities (AFIP). It was mandatory out of the city, but it wasn’t usual practice.

Landlords must declare the leases to the Tax Authorities (AFIP).

 
 

* If you have any questions or need further information, feel free to reach out to LARM Argentina contact sofia.argentina@larmgroup.com. Our experts are always happy to help.

 

 

Written by LARM Argentina

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