Renting a property in Buenos Aires Argentina? Find a Real Estate Attorney in Buenos Aires
The elimination by the Buenos Aires Legislature of the real estate commission paid by the tenant collides with the Civil and Commercial Code
the Buenos Aires legislature almost unanimously sanctioned a law that modifies that of real estate brokers, providing that they can not charge commission to tenants in housing leases.
It is not a rent law, which would be a matter reserved to the National Congress, since it would imply a reform of the Civil and Commercial Code, but a change in the brokerage law, a local rule for regulating a profession, and therefore reserved for the provinces.
The novelty lies not only in that real estate can not charge commission to tenants, but also sets an amount, with a ceiling of up to 4.15% of the contract, which can only be charged to the owner. Nor will they be able to charge the tenant such expenses as the manager, which include certificates of ownership of the guarantor’s property or notary certification of signatures, among others, that will be absorbed by the broker or will be borne by the owner.
It is estimated that there are about 400,000 rented properties in the city of Buenos Aires. Although the norm seeks to help tenants, reducing the costs of a lease, it is likely to end up being far from benefiting them, because, as different entrepreneurs have pointed out in the real estate sector, the additional costs that would happen to the owner of the property would be transferred to the rental price. Hence, it is considered that, rather than favoring the tenant, the new provision will mean a reduction of income to real estate companies acting as intermediaries between the parties. Up until now, the real estate companies had typically received a commission of up to 4.15 percent from the tenants and negotiated with the landlord an additional commission that was half that percentage.
Real estate entrepreneurs have rightly pointed out that a potential tenant who comes for a specific property offered for rent is not the same as the one who orders a search for a property of certain characteristics or price to a real estate broker.
On the other hand, the business of real estate income has been negatively affected in recent times, since in the 1990s the income was around 10% per annum, when today is around 3 to 4% per year.
State intervention on the rental market has never been beneficial to anyone. And it is known that, on many occasions, this has caused a retraction in the supply of rental properties, which resulted in price increases.
Another of the most critical aspects of the standard is that it advances on the Civil and Commercial Code, which can not be modified. In that sense, Article 1351 of the Code states that if only one broker is involved in an operation, all the parties are required to pay the commission. Hence, the rule sanctioned by the Buenos Aires Legislature, by limiting the collection of commission to the owner, would be modifying that legal criterion, which would be unconstitutional.
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