tenant alarm and landlord anger

tenant alarm and landlord anger
tenant alarm and landlord anger

The annual adjustment index of the contracts rentals that are under law 27,551 does not stop increasing month by month. Alarm is growing among tenants since those who signed contracts in July 2023 and 2022 will have to pay an update of 242.86%.

With this increase, for example, those who have a contract of 100,000 pesos per month will have to pay 342,860 pesos. These adjustments are constantly questioned. For tenants, it represents a sum that is very difficult to afford from one month to the next, while for owners it represents a value that is below annual inflation.

According to the latest reports from the Real Estate Professional Forum, since May the index has been above 200 percent update. In the fifth month of this year, the update was 219.69 percent, while in June it reached 232.5 percent.

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Rents in La Plata, a headache for owners and tenants.

Photo: AGLP

In July it will be 10 points more and will reach 242.86 percent. Virtually no tenants had an increase in their income this year with these rates. Therefore, the situation becomes difficult to face.

Although different auctioneers point out that the new update system may be more reasonable, there are professionals who point out that negotiations are already underway between the parties to cushion the update rates.

In some real estate agencies they use this location index divided by three or four, depending on the update period that was included in the new contracts: quarterly or four-monthly.

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Photo: AGLP

He Index of Lease Contracts (ICL), takes into account the percentages of increase in consumer’s price index (IPC) and RIPTE (Average Taxable Remuneration of Stable Workers).

Figures that alarm tenants

It should be noted that, although there are fewer and fewer rental contracts according to Law 27,551 and its amendments, they still represent an important percentage in the rental contract portfolio of real estate companies.

From this regulation, the ICL remains as one of the most chosen variables to carry out the new contracts once those of Law 27,551 and its amendment and the extensions that were put into effect for six months in numerous cases are finished, before the question posed by the transition of the national government of Alberto Fernandez to the current Javier Milei.

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Photo: AGLP

The other index that is taken as a reference for updates is the inflation index, which, although it is declining, represents a difficult obstacle to cross for many tenants.

Get out the calculator

There is a whole debate about how the calculations are taken since, if it is done on the basis of the annual index, which includes months of strong inflation, and is divided by three or four, it gives much higher update rates than if it is done for the months in which the time to apply the first updates has expired: the last three or four months, according to the agreement of each party. This is for both the ICL and the CPI.

As explained by various auctioneers, these are times of absolute negotiation, in which “owners have to understand that, given the greater supply of properties in the rental market, tenants would prefer to move rather than stay to pay contracts that may be impossible.” to deal with the updates.”

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