The following are the usual forms of leases:

• Commercial leases

A usual commercial lease agreement includes provisions freely agreed on by the parties based on the Civil and Commercial Code. A “lease standard form” does not exist in the Argentine market.

• Residential leases

A usual residential lease agreement includes provisions freely agreed on by the parties based on the Civil and Commercial Code. A “lease standard form” does not exist in the Argentine market.

Generally, lease provisions are freely negotiable between the parties. However, there are certain provisions that are deemed to be public policy (such as the provisions related to the minimum term of a lease) and these, therefore, cannot be ignored or altered by the parties to a lease agreement.

The maximum term of a lease according to the Civil and Commercial Code is 20 years for residential and 50 years for commercial leases.

Most residential and commercial leases are for a three-year term

Only if a tenant right to an extension is agreed pursuant to a lease agreement, and the landlord ignores or denies this right; there are no other instances where tenants may demand an extension of the lease.

Any of the parties can terminate the lease when the other party breaches the terms of the lease.

Additionally, a tenant may terminate a lease after the first six months of that lease by giving prior written notice to the landlord and by paying: (i) a penalty of 1.5 months’ rent if termination occurs during the first year of the lease; and (ii) a penalty of one month’s rent if termination occurs thereafter.

This right is only given to the tenant. The landlord cannot terminate the lease prior to the expiration of its term for no reason.

The parties to a commercial lease are free to set rent payments in foreign currency. A recent law has been passed and does not allow residential leases be set in foreign currency. This will generate a debate.

The Civil and Commercial Code establishes that payment when agreed in foreign currency can be paid by the debtor in local currency. This amendment has generated debate and there seems to be a general understanding that the parties may decide not to apply this provision in commercial dealings.

Rent is paid monthly in advance, within the first five days of the month. In addition, residential leases are heavily regulated and rental adjustments are also regulated. The current regulations applicable to residential leases have just been amended and set a special adjustment index that varies every six months.

Indexation of rent in residential leases is regulated. Adjustments to rent in commercial leases is permitted.

In commercial leases, it is common to see the parties review rent periodically (yearly being the most typical), deferring to independent real estate brokers to set the rent if the parties do not reach an agreement on the new level of the rent.

The following is usually required of landlords:

• Protect the tenant from any claim or action from any third party
• Reimburse the tenant the amount of the guarantee deposit if there is no damage to the property and there are no unpaid service charges remaining upon the termination of the lease agreement
• Pay the tax levied on real estate and any extraordinary expenses of the building
• Pay/reimburse the tenant for any damage to the property arising from structural defects

The following is usually required of tenants:

• Use the leased premises according to the purpose for which it is rented
• Pay the cost of all reasonable and necessary repairs that are required to properly maintain the leased premises
• Pay the rent services and utility bills on time
• Notify the landlord of the existence of any claim and/or appropriation or illegal use of the leased premises by any third party as soon as possible
• Return possession of the leased premises at the expiration or termination of the lease
• Deliver to the landlord a guarantee deposit upon the execution of the lease agreement (typically, one month’s rent) to cover any damage to the property upon termination of the lease agreement

A lease agreement may be freely sublet or assigned unless a clause expressly stating its prohibition is included in the text of the agreement. The Civil and Commercial Code indicates that the landlord may oppose any assignment and subletting if new tenant does not have similar solvency conditions.

Generally, lease agreements contain a provision restricting the right of the tenant to assign, usually stating that prior written consent of the landlord must be obtained.

In addition, the Civil and Commercial Code establishes that any prohibition of subletting the leased premises implies the prohibition of assignment of the lease, and vice versa.

The Civil and Commercial Code establishes that the lease will be terminated if the premises are totally destroyed by an act of God. If the premises are partially destroyed, the rent may be reduced accordingly.

If the premises are damaged or destroyed due to causes attributed to the tenant, then the tenant may be liable for repairs or replacement. In case of fire, the Civil and Commercial Code expressly states that the cost of repair falls to the landlord unless provided otherwise in the agreement, even in cases of force majeure.

Leasing regulations do not include insurance requirements. However, the parties to lease agreements usually include clauses establishing that the tenant is obligated to obtain an insurance policy covering the leased premises against damage caused by fire, flood, earthquake, etc., and for third-party liability.

Lease agreements survive the sale of the leased premises and are binding upon the new owner.

Lease agreements survive if the leased premises are foreclosed, and that foreclosure was ordered by the corresponding court and registered with the Real Property Registry prior to the date of the lease agreement.

If a foreclosure is the result of a prior lawsuit over the leased premises, the lease will not survive at the option of the creditor.