Rental Norms

[ben]

Hi, quick question that I wanted to put to the collective wisdom of the forum members, particularly as rental questions seem to be in style.

I'm on a standard rental contract, with garantia. Of course an annual rent increase was built into the contract - 20%, not bad, but by no means anything out of the ordinary.

The new year is beginning this month, and the agent (the real estate agent not only rented out the apartment, but is also administering it on behalf of the owners) is asking us to pay a rent increase beyond what was agreed to in the contract. She noted (or should I say stated, as I have not verified this) that neighboring apartments now go for much more than even the amount she is asking for, and says that notwithstanding the contract, it would be right of us to pay more, to stay on good terms (in her terms "para que sigan queriendo alquilarlo"), and so on.

The amount she is asking for is not large, actually laughable in dollar terms, but I want to understand on general principle if this is something normal to ask for, or are we being taken for a ride.

Anyone has relevant experiences here?

 

[LIVE54]

And if things went the other way and you were overpaying compared to other apartments in the building, do you think they would reduce your rent?

The norm is that you signed a contract and you should stick to that. Now, if you love the place and want to extend past your two years, maybe some goodwill now will help you on the extension, but my guess is that your LL will ask the going rate at that point anyway so why pay more now.

Do you pay your rent (assuming cash) to the LL or the real estate lady? Any chance the real estate lady is trying to pocket a few extra pesos? If the LL needed to squeeze a few more pesos out of the place each month, don't you think she should manage it herself rather than pay the real estate lady her fee or ask you for higher rent?

Smells fishy to me....

 

[ElQueso]

I've never had anyone ask me to pay more, outside of what was specified in the contract. I wouldn't do it, either, unless I had more money than I cared about or I was really concerned about some future relationship with the owners - but if the latter, I'd probably have a hard time wanting to keep that relationship if they asked me something like that, particularly in the manner in which you are stating they asked.

A contract is a contract. They can't kick you out without notice (I think it's 60 days) and the truth is, if someone did that to me, I'd stay in the place, paying the agreed-upon rent, until the end of the contract no matter how many notices to vacate or how much screaming they did.. They won't be able to get you out and the judge who heard a case on these grounds in terms of activating the garantia clause would most likely laugh.

BTW - this is why I try to do my contracts in Dollars, even if you just convert it to pesos at the blue rate because maybe the owners don't like dollars (some find it too difficult to deal with). It is almost always a win-win situation and I haven't had an inflation clause in my contracts (not required by law) since my first contract nearly 7 years ago now.

Your landlord is regretting the decision to not ask more inflation money or not having asked a higher amount, but I wouldn't feel forced in any way or fashion to accede to the demands. If you chose to do so because you feel it's a good thing to do, completely different story.

 

[Rich One]

These are standard Realtor LINES ... "Other similar" places go for more" ,,,,! yeahh how much more? Ask her for specifics..! Other places may go for less ? is she willing to reduce the rent if you show her lower rentals?? Tell her to give you some time to do your Homework and search the area to be convinced. I settled for 25 %.

 

[ben]

LIVE54 - Spot on! I didn't want to go into all the ins and outs, but you spelled out my thoughts exactly, point for point!

The first point (regarding the situation were it vice-versa) I was going to put to the agent myself. The 2nd point I think even more - that if I start paying more now it'll make it more likely, not less, that I will be having tougher negotiations when up for renewal.

As to the third point, I am still debating with myself whether to call the owner - whose number I do have - to verify whose idea this is.

Queso, you are completely right, nobody is so much as hinting as to getting kicked out or anything of the sort, there is no grounds whatsoever to do so. We are maintaing the place well, and put a fair chunk of money of our own into upgrading the place somewhat. The question is whether this is a 'normal' thing to do, or am I just being 'pulled', so to speak, by someone who has no problem moving the goalposts of what is reasonable.

It gets better. The agent pulled out a map out of Clarin showing the average rent increases in BA, barrio by barrio, to show me how low 20% is. In Belgrano rents had gone up by 25%, in Palermo by 26%, in San Telmo by 33%, and so on and so forth. Um, yes, but in Recoleta (we're in Barrio Norte, technically Recoleta) it was only 17%... The agent gave some lame reply but did not concede the point gracefully. She wasn't happy either when I made clear that I would consult before responding, to find out if such an arrangement is standard practice around here.

I wouldn't feel forced in any way or fashion to accede to the demands. If you chose to do so because you feel it's a good thing to do, completely different story.

This is the crux of what I'm unsure of. As I said, the amount being asked for is frankly a pittance, and I have no issue with making a goodwill gesture. I do have a problem with being guilted, pressured or otherwise morally conned (for lack of a better term) into a practice which is not reasonable nor customary. As LIVE54 alluded to, I'm not 100% convinced of the agent's ethical conduct - I happen to know that the previous tenant did not get his deposit back, said agent blowing him off with various less-than-justifiable excuses, until he simply gave up and moved on rather than keep on fighting for it. Not a foreigner btw. Hence my question - does anyone see this arrangement as reasonable or customary in any way shape or form?

 

[lucha54]

DOES NOT MATTER. Contract is a contract. We signed last December... economy crashed in January... dollar equivalent has skyrocketed. DOES NOT MATTER. They have no power. You have the power. Stick to the contract. If you want to stay after it's over, they will have the power to ask for the raise in rent they want. Don't let them make you feel guilty.

If it's a real estate agent they have other flats they can raise the prices on to compensate for "losses" but it's not really a loss now is it?

 

[BaltRochGirl]

That's the point of a contract to set out the terms between the parties. As stated if the economy went the other way, would the LL decide to offer a rent reduction, highly unlikely. Rental contracts everywhere are subject to the inflation and economy, which sometimes leaves one party in a better condition, if they wanted to they could have built in a inflation buffer, by trying to tie the rent to a certain index. But that should theoretically go both ways, not just up, and is likely not legal if it's tied to something like the Dollar which is not the currency of Argentina.

You can try contacting the LL but chances are they are in favor of the increase so it might be better to use the Real Estate Agent as a buffer, to which you could both say, oh that guy is causing problems.

 

[Rich One]

That's the point of a contract to set out the terms between the parties. As stated if the economy went the other way, would the LL decide to offer a rent reduction, highly unlikely. Rental contracts everywhere are subject to the inflation and economy, which sometimes leaves one party in a better condition, if they wanted to they could have built in a inflation buffer, by trying to tie the rent to a certain index. But that should theoretically go both ways, not just up, and is likely not legal if it's tied to something like the Dollar which is not the currency of Argentina.

You can try contacting the LL but chances are they are in favor of the increase so it might be better to use the Real Estate Agent as a buffer, to which you could both say, oh that guy is causing problems.

I mentioned to the Realtor that she Works to benefit the LL , so I will find Help to protect my rights....! She agreed to a lower increase

 

[BsAsFan]

Don't do it -- for all the reasons above. Regardless of the amount, you will be setting a bad precedent for the next time you have to negotiate the contract.

 

[ElQueso]

BTW - I can't help thinking of the effect of a couple of simple laws that completely screw this country up in terms of shelter and living (not even talking about the labor laws).

First, the need to protect people who don't pay their rent by making laws difficult to get people out of a place when they are not paying.
- Leads to squatters looking for places to steal.
- Leads to renters realizing they can be squatters
- Leads to owners putting garantia clauses in their contracts
- Leads to large percentage people not able to rent quality, affordable housing
- Leads to kids staying in the house longer (only one garantia per apartment - how many kids/opportunities?)
- Supports the "elite" who have one or more properties being able to maintain their lifestyle
- Provides far fewer opportunities for people who are on the lower end of the economic scale
- Supports the idea that people "owe" things to other people (a place to live, for example) without responsibility from those who are "owed"
- Places the burden of supporting squatters on owners and screws with their property rights.

Second, forced contract lengths - Two years on long term leases and short term leases converting to long term automatically
- Forces everyone into the same box
- Two years is not a good length of time for an economy that fluctuates
- Owners try to overprice their property AND/OR
- Owners put an inflation clause in the contract
- Either of the previous two items cause rental inflation separate from the economy
- At the end of two years, or more strongly 4 years, the contract on the apartment is usually over market price as a result
- People have to move more often to find a better rental deal

Sure, the government "cares" about the poor and wants to make "everyone included." Another example of government trying to force everyone into the same slot for "their own good" while ignoring the real problems and buying the vote of the people that are "helped", who are so brainwashed (or ignorant) that they actually believe the government is acting in their interests.

Meanwhile, look at Argentina's poor neighbor to the north, Paraguay.

People who do not pay rent do not stay in the accommodation, as simple as that. Rental contracts are what both parties agree to. And yet, I've seen fewer people living on the streets in Asuncion by a quantum factor than I've seen here in Buenos Aires. Very low inflation. Paraguay doesn't have a personal income tax and corporate income taxes are low. Labor laws are not nearly as draconian as here. According to a meeting I had with the president of the senate in 2008 (long story, but I'm not usually that well-connected!) Paraguay negated some 1100+ tariff and other economic rules passed by the Mercosur as detrimental to the economic functioning of Paraguay.

They certainly have a poverty problem, but it's amazing how so, too, does Argentina (so many who come here have no idea what is outside of Buenos Aires the city), whether Argentina admits to it or not.

Paraguay, as screwed up as it is (among others, currently there is a problem with a home-grown terrorist organization called the EPP), has a Ba/BB rating on international bonds (investment rated). When I came down here in 2006, Paraguay's monetary unit, the Guarani, was 2800 to 1 peso (!!!!) and is now 325 to 1. The IMF seems to like Paraguay quite a bit, extolling its 4.6 percent average growth of GDP over the last decade and estimating a growth of 4.8 percent this year.

Do the laws enacted here to "protect" the poor of Argentina do anything beyond screwing things up for everyone except the wealthy and the clingers-to-government?