New Rental Laws Approved by the House/Diputados

Rich One

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Real estate agents feel landlords will want higher rentals to be covered.
Newly approved issues:
  1. 3 year Rental Contracts, annual rental review
  2. 6 month temporary Rentals , 3 month rent review
  3. Garantia mortgage, payslips, insurance , etc
  4. Rental Adjusted by a factor , Average between Salary and Inflation rates



 

gracielle

Registered
To expand on the information posted regarding the proposed rental law:
6 November 2019

TITLE II, Additional Regulations, ARTICLE 16th.- The property lease contracts must be declared by the landlord before the Federal Administration of Public Revenue of the Nation (AFIP), within the term, in the form and within the scopes that said organism holds. The Federal Administration of Public Revenue (AFIP) will provide a system of facilities for the registration of contracts in force. The breach by the landlord will make it liable to the sanctions provided in Law No. 11,683 (t.o. in 1998 and its modifications). When legal proceedings are initiated due to the execution of a lease,
prior to the transfer of the claim, the Judge must inform the Federal Public Revenue Administration of the Nation (AFIP) about the existence of the contract, for the purpose of taking the appropriate intervention. Notwithstanding the obligation of the landlord, either party may report the existence
of the contract to the Federal Administration of Public Revenue of the Nation (AFIP) for the purposes provided in this article, in the terms that this authority provides.
 

Rich One

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In today's TV interview the President of the Realtors Association stated that the Law Project goes to the Senate, where it may take a year to be approved. However if the Senate modifies one word of the Law must go back to Diputados, and start all over again...

Based on the 2019 numbers the adjustment factor (Inflation rate plus Salary increase )//2 would come to over 45%
 
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Pensador

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Oh LOL I remember my first rental agreement. Before we built this place with cash. Inflation in the agreement. Rent went up every 3 months in the contract.
 

Bajo_cero2

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Real estate agents feel landlords will want higher rentals to be covered.
Newly approved issues:
  1. 3 year Rental Contracts, annual rental review
  2. 6 month temporary Rentals , 3 month rent review
  3. Garantia mortgage, payslips, insurance , etc
  4. Rental Adjusted by a factor , Average between Salary and Inflation rates



Those are not the most important innovations.
Here you have an explanation from the authors of the law project:
 

rickulivi

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It seems to me that the spirit of this possible law is to encourage the sale of rentals, which will flood the market with properties for sale, and thus reduce prices. Why? Why would anyone want to buy an apartment and rent it out under these conditions? And if you own one, and rent it out, this proposed law will dramatically reduce the profitability of the rental.

With the current and expected inflation, being allowed to raise rents after one year is a sure way to lose money. Being forced to keep a tenant from hell for three years is a sure way to ruin your health and property. And being forced to record the contract, and thus make an owner pay the taxes on the rental income, surely removes another great incentive to own rental properties.

In sum, this law may create an overabundance of properties for sale and a resulting drop in sale prices. Good news for potential new buyers, terrible news for current owners.
 

Rich One

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According to a Real Estate agent in today's Clarin, apts. are like 30% overpriced, potential buyers counter 20 % under the listed price. ?
 

rickulivi

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Rich one: I read the article you refer to, but it seems the writer is anything but objective. My impression was he's slamming real estate, so people will contact him to sell it, and then he wants to re-invest in whatever he wants to sell.
Cicero, the great Roman lawyer, used to teach: find out what the guys agenda is!
 

gracielle

Registered
It seems to me that the spirit of this possible law is to encourage the sale of rentals, which will flood the market with properties for sale, and thus reduce prices. Why? Why would anyone want to buy an apartment and rent it out under these conditions? And if you own one, and rent it out, this proposed law will dramatically reduce the profitability of the rental.

With the current and expected inflation, being allowed to raise rents after one year is a sure way to lose money. Being forced to keep a tenant from hell for three years is a sure way to ruin your health and property. And being forced to record the contract, and thus make an owner pay the taxes on the rental income, surely removes another great incentive to own rental properties.

In sum, this law may create an overabundance of properties for sale and a resulting drop in sale prices. Good news for potential new buyers, terrible news for current owners.
I believe it may also lay the ground down the line for an additional amendment. One proposing a tax to owners which choose to keep their rental units empty.
 
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