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Legislative context

The landlord and tenant matters related to residential property, which became effective on 1st August 2015, are governed by the Argentine National Civil and Commercial Code. Certain provisions in the so-called convertibility law (Law No. 23,928), as amended, affect rentals as well, particularly with regard to a ban on inflation indexation. real estate

Short history. Brief history.

Under the laissez-faire foundations of the original Argentine Civil code (which was promulgated in 1869), the majority of leasing issues were left to landlords and tenants' freedom to contract. This policy prevailed until 1943 and between 1921 and 1925 with a brief exception.

In accordance with the laws and regulations in force from 1943 to 1979 on "emergency," residential leases have been forcibly extended and State rent strongly regulated. In this period, residential lease was an ominous risk for the landlord, because the laws enabled the tenant to extend the leasing unilaterally without changing the rent. During this time, the nominal rent payable would be worthless in the inflationary environment.

Law 21342, enacted in 1976, drastically deregulated the relationship between landlord and tenant. In 1984, following the signature of the Urban Leases Act (Law No. 23,091), a government tampered with leases only occasionally (see e.g. Laws 23,542, 23,680 and 23,747) to account for the effects of hyperinflation between 1987 and 1989.

In 2014, the Congress adopted a new National Civil and commercial Code (Law No. 26,994), which reiterated, with a few exceptions, the provisions of the Urban Leases Act with regard to the rental of residential property.

In the last few years, the value of residential property in some cases exceeds US dollar prices at the time of the currency devaluation of the country in 2002, leading to a significant increase in rental values. Although many have speculated that the government will quickly regulate this, the governments have taken no specific action to slow, stop or otherwise regulate rental prices.

Rents

The landlord and tenant have the freedom to rent. Argentine law nonetheless imposes certain restrictions on this freedom. The rent must therefore be paid on a monthly basis and cannot be indexed for inflation during the lease period. The landlord may require an advance payment, but only one month's rent.

Deposits for Security

The property owner may require a security deposit not exceeding the equivalent of a monthly rent per lease year.

Lease duration; eviction

Residential property rental agreements may have terms not less than 2 years and not more than 20 years. Contracts entered into for a short or long term shall be extended to or limited to the statutory period, as applicable, by law. The statutory minimum period does not apply to lease agreements of:

premises used by foreign staff as embassies, consulates or other official international or diplomatic organizations;

Furnished residential property rented for a holiday purpose, provided that the contract is inconsistent with vacation use if the term of the lease exceeds three months;

space for storage;

Stalls, booths and exhibition stands; and

Rent of premises for a specific purpose specified in the lease agreement, which should normally be completed within a period of less than two years.

By law, the landlord may not terminate a lease before the statutory minimum period expires. The tenant may terminate the lease only after the first six months of the contract period before the minimum period. If a tenant decides to terminate the lease before the end of the term:

The tenant must provide the landlord with a formal written notice (the conventional means is a certified letter (carta documento));

The tenant must pay the landlord damages equal to:

one and half months' rent if the notice of termination is given in the first year of the rental;

Rent for one month if the notice of termination is given after the first year;

2 months of rent for rent granted for less than the statutory minimum period (according to one of the statutory exemptions to that period).

If the tenant dies during the term, the lease can be maintained by the tenant's heirs on its original terms. However, every person who is a family member or who was considered by the tenant as a family member at that time is also entitled to retain the rent under their original terms and such entitlement prevails over the rights of the tenant's heirs.

Only through judicial proceedings can tenants be expelled. If the eviction is based on the tenant's delays in renting, the landlord must request payment of his past rent at least 10 days before starting the eviction process. A landlord may also file an eviction proceedings before the term of the lease expires and apply an expiry order. Nevertheless, if the tenant does not contest the action and leaves the property on time, the landlord will bear all costs related to the proceedings.

The rules for court evictions vary from province to province. As a general rule, all jurisdictions require that the tenant's notice and opportunity be heard through a convocation and complaint. Since 2002, the rules applying to the City of Buenos Aires require landlords to post security on the benefit of the tenant when the action seeks an immediate possession of a residential property on the basis of alleged holdback or arrears payments (e.g. a cash deposit or lien over the property). The posting of this obligation or guarantee enables the landlord to obtain an expulsion order much earlier than before.

The Legal System Effectiveness

The 2002 amendments to the rules on civil procedure in the city of Buenos Aires significantly shortened the time spent by landlords to collect property from tenants who did not pay rent. In addition, landlords may sue for unpaid rents via an accelerated procedure with summary remedies, such as an ex parte seizure of the property of the tenant. Nevertheless, judicial inefficiencies and wily tenants often delay proceedings against recovery and eviction.

Due to persistent uncertainties, property owners are well advised to provide their tenants with solid guarantees and credit improvements, a practice generally accepted.