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For real estate companies in Buenos Aires, the new rental act will make less available stock pushing up rents

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Real Estate professionals are against extending the contracts from 2 to 3 years and add that the banks charge very expensive guarantees.

After studying the key points to the reform to the law of residential rentals proposed by the government, some real estate operators took a more critical look. Especially with the extension of 2 to 3 years of the length of contracts, which for the sector will have the effect of reducing the number of apartments for rent and push up rents.

The president of the School of Realtors in the city of Buenos Aires, Armando Pepe, is one of those who says that the owners of the departments will be against extending the current 12 months contracts. She said, “the situation is complicated, and there is a lot of uncertainty”. It was announced that the extension of contracts will be three years when until more recently they spoke about two years.  And the issue of the guarantee is the most complicated, Pepe explained in a statement to Radio Mitre.

The project that was presented on Friday where the president Mauricio Macri foresees that, in addition to the normal rental guarantees, the tenant can offer bank guarantees or other insurance guarantees; That the updating of the rents will be every 6 months based on a mixture of inflation and wage variation and that the real Estate Commission is paid only by the Owner, not the Tenant as before.

Pepe said that “when an owner puts a property of 4 million pesos for rent, the guarantee cannot be with a tenant paycheck. And they talked about bank guarantees, but it’s expensive what banks charge for a guarantee, which will hurt the Tenant. It’s one of the most complicated issues because every official says something different. “

A landlord added that “if the renting act goes like this it will produce a total retraction of the properties on offer. Many owners are already calling the real estate agencies to tell them that when the contract of their property is fulfilled they take it out of the rental offer to put it on Sale. “

“Whenever you try to protect the tenant with a bad law you are risking a bad reaction. It is not understood why this government takes such a populist measure, not even Cristina de Kirchner touched the issue of rents. Build more homes instead of passing this bad law, “she said.

Source: El Clarin

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