what's the deal with $USD in argentina?

[citygirl]

The other problem is that if a tourist wants to pay in pesos, he or she will have to take pesos out of the ATM to do so. Which a) is quite expensive at a 3% currency conversion fee PLUS paying the 16 or 20 peso fee the ATMs here charge PLUS whatever their banks at home charge for using a non-bank ATM and b) is almost impossible to get the required amount in 1 withdrawal esp if tenant needs to pay rent and security deposit. It is much more cost-effective for a tourist to actually pay in dollars that s/he brings with them.

As for the rest, even though my contracts were always written in dollars, I always paid (when paying locally) in pesos at that day's exchange rate. As a courtesy, I usually paid at the "buy dollar" rate since I knew the landlord would change the pesos as quickly as possible. That of course probably is no longer an option with the restrictions for the landlords.

 

[Spfly731]

From my understanding dollars are available.... not at the official rate, but they are readily available at what the government calls "cuevas" (blackmarket), just check Ambito Financiero and there you can find the "informal" buy and sell rate for the day. Most Argentines know someone who knows someone, the black market has always been a reality in this country and will continue to be. The black market is under heavy government control at the moment.... and as long as they keep their rate at around $4.60 to 1 U$S they pretty much let them operate freely. Of course, to sell or buy in this country you have know someone who knows someone.

 

[solerboy]

Your hypothetical is problematical to the point of "ludicrousosity."

Okay, some landlords who deal with tourists may continue to disregard the law by holding out for dollars only perhaps because of greed or ignorance. I'm not sure how they will know for sure that the tenant will abide by the void clause to pay more than the initial reserve/downpayment in dollars. They run the risk that the savvy tenant will refuse to pay the balance in dollars. Landlords may find that they will not get paid unless they accept pesos at the official rate which they are obligated to do.
Of course, they could play hardball by pocketing any downstroke and then refusing to turn over possession until the dollars (not the peso equivalent) were paid. That's pretty risky. First they lose the tenant and the balance of the rent. More importantly, landlords and especially real estate agencies who make a business of renting to tourists will find that if they do this, even just a few times, they will get bad publicity that will hurt/ruin their business, not to mention lawsuits by outraged knowledgeable customers and possible prosecutorial action for criminal fraud.
Other landlords and real estate agencies will simply ask for more pesos up front than they otherwise would. Problem solved. Tourists will no longer have to travel with large amounts of cash. Hopefully, landlords and especially temp rental agencies will stop requiring payment in dollars once the law becomes widely known.

Im not sure what experience you have had with the short term rental industry in Buenos Aires.

I have been working with Argentine landlords since 2008 and I can assure you that many would prefer to lose the client and the money than rent a property on terms that do not suit them. I am not advocating this but this is a fact. I have known property owners refuse clients on totally irrational racial grounds.

As for carrying large amounts of cash, I dont think it is relevant whether a client is paying us$1000 or ar$4500, they still have to carry cash. A number of landlords I know would be happy to accept a bank transfer from clients, but because of central bank restrictions on the movement of cash in and out of the country this is impossible.

In real life, lanldords will accept pesos at an inflated amount but this only covers the cost that they will need to pay to aquire the dollars for themselves, also in real life, short term rental clients do not want to spend their holidays sorting out lawsuits.

As Citygirl has already commented, it is inconveniet for clients to have to change from dollars to pesos and for larger amounts it is impossible. So the number of clients who want to pay in pesos is , in my experience, very small.

The problem with these laws is , they are not made for good economic or citizen protection reasons, they are just knee jerk laws made to resolve a problem caused by the previous law which was also a kneejerk law.And with each knee jerk law the black economy grows bigger.

If this law begins to bite, which i doubt,I can foresee that properties will be advertised in pesos, the advertised rent will be increased by 20% and a 20% discount will be offered to clients who can pay in dollars. There is always a way around the law if you want to get around it.

 

[EricM]

Can anyone comment on what they are seeing for the exchange rate on the informal market? Ambito is saying 4.60 to 4.70. Does anyone have any experience in the last couple days?

 

[Spfly731]

4.60.....

I heard that if it goes above that price the "government" send in their men in black and threaten to close down their operation. Should stay at that price for some time.... don't see the dollar going any where for a while. The definition of "a while" in Argentina could be 1) a couple of days or 2) a couple of months or 3) a year.... who knows????

 

[dennisr]

http://negocios.iprofesional.com/no...ropiedades-en-boca-de-pozo-viajes-y-autos-top

http://translate.google.com/transla...h?q=iprofesional&hl=en&tbo=d&biw=1024&bih=644

 

[expatalex]

Hi, I own a motocross accessories shop and I always need to buy US dolars, I'll buy your dolars here in Argentina with pesos at .30 centavos over the oficial exchange rate, we can meet at my shop in Belgrano R, or you can deposit US dolars in my Bank of America account in the US. MOTO-PROTECCIONES 4542-0940 ask for Alex, its safe and discrete.....

 

[scarface]

Three consecutive walls of text that no one read.

No one? You seem to have read and argued here.

The guy obviously has some personal issues. Let him rant alone. Most tourists aren't the type of people that will renege on contracts anyway. They are for the most part, honest and understand what a private contract is. Only a very small minority of people are shady enough to try to change the terms mid stream or try to squat on someone elses property without paying the rent under the terms that were agreed to in the contract.

The average tourist may understand what a private contract is, but again you demonstrate mindboggling ignorance of what a private contract is and what it means that a contract term is void. Requiring payment in dollars for a residential lease is a void contract term. The law doesn't recognize the existence of a void term. It is legally impossible to reneg on a void term. Try again to get your mind around that concept. The reason certain contracts terms are made void by the law is because they would be against public policy as determined by the legislature/goverment. Contrary to what you seem to think the law is binding on all citizens, you included.
A clearer example may help. If you make a contract with someone for them to kill your neighbor, paid them for the job, and then they backed out, you could not sue them in a court of law to recover your money. That entire contract is void and may not be legally enforced. Similarly, as landlord you make a contract requiring the tenant to pay dollars. You can't sue to get them because the law makes that term void though the rest of the lease terms are unaffected.

Personally if I were renting my apartment out, I would insist on a two year lease with a guarantee and a requisite credit and judicial check. Period. Let the short termers deal with hotels. That way they don't have to deal with " evil " landlords.

You are entitled to insist on a 2 year lease with a guarantee and all the credit checks your little black heart desires. But there are many who earn a pretty good income by dealing in temporary apts either as a landlord or an agent. That business has become a pretty important component of the tourist industry. Based upon the kind of person your posts demonstrate you are, you are right to stay out of it.
p.s I find it ironic that you accuse me of having "issues" when you don't argue that the law is different than what I ( Bajo_cero) have said it is. Rather you simply think it is dumb/wrong to comply with it. Talk about having issues...

 

[scarface]

The other problem is that if a tourist wants to pay in pesos, he or she will have to take pesos out of the ATM to do so. Which a) is quite expensive at a 3% currency conversion fee PLUS paying the 16 or 20 peso fee the ATMs here charge PLUS whatever their banks at home charge for using a non-bank ATM and b) is almost impossible to get the required amount in 1 withdrawal esp if tenant needs to pay rent and security deposit. It is much more cost-effective for a tourist to actually pay in dollars that s/he brings with them.

I'd agree with you if you were right, but you aren't. A few days ago I withrew 1000 pesos from an ATM using my debit card. It cost me $US 237. That calculates to 4.219 pesos per dollar, My bank will recredit me with the 17 peso fee charged by the local bank network. I will get 4.29 pesos per dollar. The currency conversion fee of 3% to which you refer doesn't apply to ATM withdrawls for all (most) cards. Merchant purchases may be different with 3% fees not uncommon.
The number of withdrawls one can do at an ATM in one day is dependent upon their personal limit with their bank. Moreover, most people have more than one debit card account so it really isn't hard or expensive to acquire the pesos necessary to pay for a temp rental or monthly lease. It is not significantly more cost effective for a tourist to pay in dollars that s/he brings with him/her.
The important point is that it is not safe for tourists to travel with large amounts of cash on their person. If you go to tripadvisor.com you will find that tourists coming to BA constantly fret about carrying large sums of cash in a strange place.

As for the rest, even though my contracts were always written in dollars, I always paid (when paying locally) in pesos at that day's exchange rate. As a courtesy, I usually paid at the "buy dollar" rate since I knew the landlord would change the pesos as quickly as possible. That of course probably is no longer an option with the restrictions for the landlords.

Your courtesy of paying your past landlord at the buy rate was kind of you and no doubt kept the peace, but what will happen if and when the diference between the black market rate and the official rate grows larger? That's the rub. It would be best if the price term in a short term tourist/expat lease were expressed in pesos. That is true even if the peso price takes into account the cost of a dollar on the black market.

If inflation is a concern for long term leases here then, to the extent the law allows, perhaps the rent price could be adjusted periodically. It was my understanding this thread was about short term rentals and whether the landlord could require payment in dollars, not with how landlords cope with inflation when setting the price of a 2 year lease.

 

[scarface]

Im not sure what experience you have had with the short term rental industry in Buenos Aires.

It's not deep. I have only rented a few apts before buying one a few years ago. Though my personal experience is limited I read the tripadvisor forums regularly having been a DE at one time. One of the biggest concerns by tourists coming to BA is safety and the danger inherent in carrying lots of cash. That's why I was happy to read Bajo_Cero's opinion with citation to the law that makes void a clause requiring payment in dollars in a short term rental contract. Tourists need not travel with large amounts of cash on their person. They can use plastic or ATMs after they arrive to pay for short term rentals.

I have been working with Argentine landlords since 2008 and I can assure you that many would prefer to lose the client and the money than rent a property on terms that do not suit them. I am not advocating this but this is a fact. I have known property owners refuse clients on totally irrational racial grounds.

It's a collateral issue, but is refusing to rent because of race not illegal?
Do you think it is "right"? Do you think breaking the law in general is right?

As for carrying large amounts of cash, I dont think it is relevant whether a client is paying us$1000 or ar$4500, they still have to carry cash. A number of landlords I know would be happy to accept a bank transfer from clients, but because of central bank restrictions on the movement of cash in and out of the country this is impossible.

However great the amount whether in pesos, dollars, euros or pounds, many tourists get frayed nerves when they have to carry what they consider lots of cash. If they can limit the necessity to travel with lots of cash to a trip around the corner to a local ATM after they get here, it would make a big difference.

In real life, lanldords will accept pesos at an inflated amount but this only covers the cost that they will need to pay to aquire the dollars for themselves,...

That is their privilege and no one has argued otherwise.

... also in real life, short term rental clients do not want to spend their holidays sorting out lawsuits.

Obviously true, but some (read lawyers) will not hesitate to retain a local lawyer if they get screwed badly enough. For example, if a landlord or especially a rental agency, refused to turn over the keys after the tenant had asserted their right to pay in pesos thereby forcing the tenant to scurry about madly looking for a place for the wife and kids to camp out. As you may have gathered, I'd sue the shit out of a rental agency that did that to me.

As Citygirl has already commented, it is inconveniet for clients to have to change from dollars to pesos and for larger amounts it is impossible. So the number of clients who want to pay in pesos is , in my experience, very small.

See my reply to Citygirl above pointing out that she is incorrect about the inconvenience and cost of paying in pesos.
It sounds like you are in the RE rental business. I am surprised to read your opinion that most tourists prefer to pay in dollars. I would have guessed most would prefer to pay with plastic avoiding pesos and dollars altogether, but up until now even established agents (like Reynolds or AptsBA) didn't accept plastic. I don't what know they are doing about dollar contracts.

The problem with these laws is , they are not made for good economic or citizen protection reasons, they are just knee jerk laws made to resolve a problem caused by the previous law which was also a kneejerk law.And with each knee jerk law the black economy grows bigger.

I don't disagree.

If this law begins to bite, which i doubt,I can foresee that properties will be advertised in pesos, the advertised rent will be increased by 20% and a 20% discount will be offered to clients who can pay in dollars. There is always a way around the law if you want to get around it.

I don't disagree, but at least tourists will have an option. That is important.