Argentine Real Estate Market: What is the new Electronic Ticket and how it can be used to buy off the plans apartments with credit
The Government hopes with this new tool to boost sales of apartments sold of the plans in the City
President Mauricio Macri presented this Monday a new tool to increase sales of sold off the plans apartments “The Electronic Real Estate Ticket”, a tool that seeks to boost the sales of apartments under construction in the City of Buenos Aires.
The presentation was of a platform, that will operate within the Registry of the Real Property of Porteño, where the property developer and the buyer of an apartment under construction can register electronically evidence of a firm sale.
For This, decree 962/2018-regulated in December 2018 establishes that both parties must have a digital signature or do it through “a notary public, who must present (the ticket) through the Platform of Distance Procedures (TAD) with a digital signature”.
In Addition, the rule states that “the transfer of property may be registered, provided that it has been digitally signed and managed by TAD”.
The Government argues that this tool will, in addition, to expediting operations, allow banks to finance more purchases because they will have digitized documentation that will give them more “security to lend on”.
In this sense, the real estate operator Armando Pepe said that “using the ticket is a registered financial instrument, and banks will be able to give credit on that document and that will drive new construction.”
Another advantage, they argue in the sector, is that the crime of “multiple resales” will end, which occurred when sometimes a property to be built was resold more than once because the agreements between the developer and buyer operation were not registered anywhere.
To adhere to the system, both parties must meet the following requirements:
1)Both buyer and developer must have a digital signature, something that can be obtained through the AFIP ( tax Department) or the so-called “suppliers of Cryptographic devices homologated”.
2) The Purchaser shall have a down payment of at least 25% of the value of the unit.
3) The developer must present, in addition to the municipal documentation of approval of the work, an approved plan made by a surveyor that identifies all the units of the project, “including surface, location and other essential characteristics.”
4) The developer must also have insurance that safeguards the buyer (up to a certain amount) against any breach in the work. Today many developers skipped this requirement by making the buyers sign a waiver, but it is now being made compulsory.
Reviews of the New Tool
Among the criticisms of the system, some operators of the sector argue that it will not serve to reactivate banks credits for well-developed developments, as the Government states.
“Although banks will have more support, they are not convinced by these types of loans because they are financing 30 years not only the risk of default of the debtor but the termination of the work by the developer.
The ticket does not have the same level of security as a real guarantee and the banks will not be able to mortgage the unit if there is a problem.
Therefore, it may happen that they end up asking for a higher interest rate than a normal mortgage credit.
On the other hand, from the real estate sector, they maintain that the operations could be slowed down by the transfer of costs of the bond insurance and because the electronic ticket registration will prevent the classic “draw” maneuver down of the sales price on the final deed. ( to avoid taxes ).
In addition, several operators claim that it will be difficult in many cases for buyers to have gathered the 25% value of the unit and criticize that the system will only be operational in Buenos Aires City.
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