The Chamber of Deputies approved the changes the Senate had made to a Rental Law reform bill the Lower House had passed in August, making said reform official law.

The main changes are that rent will be updated every six months instead of yearly, and that the raise will depend on either inflation or salary increases — whichever percentage is lower. The minimum duration of a lease, which the bill initially approved by the Lower House had shortened to two years, will remain at three years after the Senate rejected that provision last September.

The Ley de alquileres or Rental Law currently in place was originally passed in July 2020 and put a three-year minimum on rental contracts — adding a year to the two-year period then in place. It also established yearly price updates, which were established through a formula that took the official inflation rate and the average workers’ salary into account and drew an average between them.

In addition to shortening the minimum duration of leases, the bill initially approved by the Lower House established that raises should be set between four and twelve months, leaving the exact duration as something to be agreed upon between the tenant and the landlord. The bill didn’t specify which formula should be used to calculate price increases, but rather offered several options from which the parties could choose from.

This bill was then sent to the Senate, which made several modifications. It reinstated minimum lease back to three years, established rental increases be at least every six months, and that raises be calculated using the Casa Propia index, a formula that uses whatever figure is lower between the salary variation of the prior year, or average inflation in the same time frame. The introduction of these changes meant that it had to go back to the Chamber of Deputies for final approval.

The Senate-made changes were approved by the Lower House on Wednesday with 128 votes in favor and 114 against. The majority of the positive votes came from the ruling coalition Unión por la Patria (UxP), in addition to some provincial parties and the left-wing Frente de Izquierda-Unidad. The bill was rejected by opposition coalitions Juntos por el Cambio (JxC) and La Libertad Avanza (LLA). The latter only has three deputies, including presidential and vice presidential candidates Javier Milei and Victoria Villarruel.

In addition to the changes mentioned above, the reform — which will be in force once it is published in the Official Bulletin — also establishes that rent contracts can only be made in the national lender, the peso. It also forbids paying rent in advance. The current law allows paying only one month in advance. There will also be tax benefits for landlords.

“This is an issue that affects the lives of around eight million people,” national deputy Lucas Godoy (UxP) said in support of the bill during the session. “This is a [situation] that has never had a balanced relationship between parties. The law should protect and balance out the conditions [in favor of] tenants.”

JxC deputy Pablo Tonelli rejected the new bill because it does not introduce significant changes to the law currently in place, which he says has negatively affected tenants given that it “caused a huge step back in rental housing supply.” 

“It doesn’t let them negotiate contract terms in equal conditions,” he concluded.

— with information from Télam.