The Government resolved to suspend the Rental Law for being “harmful” for tenants and owners and “affect” the real estate market by causing rents to rise in the order of 245% since its entry into force in 2020. The decision was made between the president Alberto Fernandez and the Minister of Economy Sergio Massa and they would be announced in the next few hours, once they decide which tool to replace it with.
It was a project promoted by the current legislator from Buenos Aires, the platense Daniel Lipovetzky, when he was a national deputy. This norm established changes in the real estate market by extending the duration of the contracts from two to three years and validating a single annual update of the value according to an index that combines the evolution of salaries and inflation. It was approved in November 2019 by the Chamber of Deputies, but was sanctioned by the Senate in June 2020..
One of the main consequences of its entry into force was that the owners, given the uncertainty, raised the prices of the new contracts above inflation and a few months later the offer in the market had decreased with higher prices.
In this context, various sectors began to raise the need to generate changes and it was even used as a slogan in the campaign for the opposition’s legislative elections. At the end of 2021, the current Minister of Economy, Sergio Massa, announced that he would promote a modification of it and the creation of a commission to analyze the issue. At the opening of the 2022 sessions of Congress, the president himself requested to move forward with changes to the Law and even considered the possibility of suspending it for 90 days.
But despite the fact that since its entry into force, about 30 projects have been submitted for modification or repeal, nothing has been resolved. Likewise, in mid-2022 three opinions were signed, one by the majority of the Frente de Todos and another two by the minority, from Together for Change and from the deputy Graciela Camano of the Renovating Front. The proposal that achieved a majority does not propose a modification for the most controversial points of the Law -which are the three-year term or the annual adjustment-.
While the debate continues, the validity of Lipovetzky’s law continues to harm tenants. Since April, new increases for contracts that had to be renewed came into effect, so a tenant who agreed in April 2022 to rent $50,000 for a property in La Plata, with the 92.5% year-on-year increase stipulated for this year, will pay $96,250. Contracts renewed in March had already reached an 89.6% increase, while in February and January they reached 86% and 81% respectively.
