Since the new rental law came into force in July 2020, its reform was deferred to Congress. A few days before the end of the year, the possibility of the changes required by the market vanishes real estate companies are wondering if the reform will finally take place next year. For now the project it still has parliamentary status
The changes essentially proposed in the project are: to reduce the contracts from three to two years and to modify the adjustment clause which today is annual according to the Lease Contracts Index (ICL) which takes a mix between inflation and wage evolution.
In Congress, the sequence was as follows, explains Gervasio Muñoz, head of the United Tenants association, which does not support changing the law. “There have been two majority opinions: that of the Frente de Todos which ratifies the entire rental law and anticipates some more regulations. And that of Juntos por el Cambio e Camaño (minority) who proposes to extend the contracts to two years and increases every three months without index, plus the possibility that the owners can request six months in advance,” he described.
Finally, “Together for Change didn’t get the votes of the provincial blocs because they refused to vote for something so pro-market. Thus the ruling party defended the law and the opposition was unable to gather votes. Conclusion: the law is still in effectsummed up the tenant representative.
The truth is that, over the past two years, the results of the implementation of this law have been thereThe high values of the locations. This happened because landlords set high amounts due to the annual upgrade in an economy that will end up with 100% annual inflation; the scarcity of units available for rent and the proliferation of informal arrangements between landlords and tenants, who accept shorter contracts with staggered increases without taking into account the legal framework.
“With less than 20,000 units offered for rent in CABA on the main portals, for a Universe that is close to 400,000 rented homes in the City, it is evident that we are rapidly moving towards “zero rents”, i.e. towards a more marked informality, rents between “friends and family,” Real Estate Report analysts explain on their website.
“I think this complicated situation speaks for itself of the difficulty the rental market is facing right now. due to the failure of the rental law. And unless Congress makes progress on reforming that rule (as promised in March of this year and never delivered), the outlook isn’t any better,” says Marta Liotto, president of the Council of Real Estate Professionals (CPI).
“We trust that the arrival of the new year will allow us to find ways to do so advance the changes necessary to resolve the disaster generated by this rule.”, Liotto continued. And he added that “next year is decisive for his treatment, he has parliamentary status, and as it is an election year, perhaps the MPs who have publicly engaged with society to resolve this issue, manage to reach the long-awaited quorum of so many millions of citizens affected by the rent issue,” he said.
A little more skeptical, Roberto Arévalo, former president of the Real Estate Chamber and broker in the federal capital, stated that “the rental law He will have no long-term intentions to address even after the project has been approved by the ruling party. The citizens’ representatives are disinterested,” he said.
In the midst of the comings and goings regarding the treatment of the law, tenants continue to acknowledge receipt of raises who, despite being below the inflation average, are not reasonable as regards the evolution of their salaries (according to the Real Estate Report, until October, increases averaged 70.91% and inflation reached 83%).
For example, “those tenants who started renting out their home on 1 December 2021, according to Central Bank indices for the month of December they will see the fee increase by 77.58%Were it detailed.
The data of the increases are not defined towards the next year. But according to Liotto, “as a result of parities and inflation which apparently does not stop eventually the increases for annual updates will exceed 85% by the first quarter of 2023 and it grows day by day. Which means the escalation for initial market value in new contracts doesn’t stop,” she pointed out.
Currently, the rental value of a studio apartment in CABA costs $72,877 a month, according to a survey by the real estate portal ZonaProp. Meanwhile, a two-room apartment costs $88,124 pesos, and a three-room apartment of 70m2 is rented for $119,458 pesos.
Source: Clarin
