The term “real estate” includes the following:
- Land
- Any movable assets affixed to it
- Non-movable assets built on it
Real estate transactions are governed by the Civil and Commercial Code of Argentina. A new Civil and Commercial Code of Argentina (“Civil and Commercial Code”) was passed and became effective as of 1 August 2015. It introduced many new legal alternatives that can be used to structure a real estate development, especially in cases of the alternative of a surface right, which before was only available for forestation and structuring of big commercial stores (shopping malls, residential condominiums, etc.). A surface right is a real right that grants the use of the land for a period of time, without transferring title, allowing amongst others, the grant of guarantees over the constructions on such land. Registration issues are contained in Real Estate Public Registration Law No. 17,801 and in a number of provincial laws and regulations which deal with registration in those jurisdictions.
All provinces maintain a registry system where ownership can be verified and through which interests in land are registered. Any acquisition, conveyance or any other act involving interests in real property must be performed, transferred or assigned by means of a public deed which is granted by the notary public appointed by the parties. The notary public must then register the public deed with the Real Property Registry (Registro de la Propiedad Inmueble) of the jurisdiction in which the real estate is located.
The Real Property Registry of the jurisdiction in which the real estate is located manages registration under Law 17,801, as amended.
The Real Property Registry registers any real rights. No personal rights are subject to registration except for certain exceptions.
- Ownership and co-ownership
- Usufruct
- Easements
- Mortgages
- Surface rights
- Trusts
- Leasing
Landownership may be proven using a title deed of ownership that must be registered with the Real Property Registry of the jurisdiction in which the real estate is located. A report from the Real Property Registry may also be requested to provide evidence of the status of title to the property.
Yes. Nevertheless, any transaction involving real estate located within a security area (specifically designated by law) will need prior authorization from the National Commission for the Security of Border Areas. In general, security areas are those areas along the borders, either terrestrial or maritime, and areas around military or civil buildings that are considered important for national defense.
From December 2011, Law 26,737 has imposed the following limitations to foreigners’ acquisition and possession of rural land:
- Foreigners may not own more than 15% of Rural Land in Argentina.
- Foreigners (individuals or legal entities) of the same nationality may not own more than 30% of the 15% mentioned above
- The land owned by the same foreign person should not exceed 1,000 hectares in total in the core area of Argentina or equivalent in other areas.
- Foreigners cannot purchase Rural Land if it contains any kind of permanent water within the land or at any border.
- Foreigners are required to obtain a certificate from the Registry of National Rural Land as a condition precedent to acquiring rural land.
Rural land is defined as any land located beyond the urban areas. The reference made to foreign ownership mainly includes the following:
- Foreign individuals residing or not residing in Argentina
- Legal entities in which 51% of the corporate capital belongs to foreigners or if there is any sort of control by a foreigner of the legal entities
There has been debate in relation to some paragraphs of the law that do not seem to have been definitely settled, regarding the exact scope and reach of the above rules. In fact, Government Decree 820/16 introduced certain clarifications and interpretations of the law that have been also subject to debate.
Yes. Expropriation consists of taking privately owned property into government ownership. Argentine law (i.e., National Expropriation Law No. 21,499), provides for a compulsory purchase procedure. Before this procedure can be followed, a law must be enacted which establishes the public purpose for the expropriation of that land, and a notice must be served on the owner. The government is required to pay proper compensation to the real estate owner. A number of provinces have enacted their own expropriation laws for real estate located in these provinces.
Generally, an interest is held by any of the following:
- Ownership or co-ownership
- Lease or leasing
- Free lease (comodato)
- Trust
- Surface right
These structures are usually used for investing in real estate:
- Branches of foreign companies
- Stock corporations (with certain new legal structures available such as simplified stock corporations or sole shareholder corporations)
- Limited liability companies
- Real estate trusts
The funding of real estate transactions depends on the type of transaction. They may be funded through loans granted by financial institutions (secured by a mortgage on the real estate). However, since approximately 2000, many real estate developments have been funded through the implementation of trusts, where an offer is made by the developer to potential investors before the construction work starts, and those investors pay installments until the construction is finished. This structure has compensated for the lack of loans available in the Argentine market. As regards the inflow and outflow of funds to and from Argentina, these are heavily regulated by means of exchange control regulations.
This will depend on the type of transaction. It is usual for an offer (reserva) to be made to the owner, with the parties then entering into a preliminary sale and purchase agreement (boleto de compraventa), while the public notary obtains all reports from the Real Property Registry and is ready to grant the transfer title deed, which will later be registered with the Real Property Registry.
If a preliminary sale and purchase agreement is executed, between 25% and 30% of the purchase price is paid to the seller and the balance upon execution of the transfer title deed. If a preliminary sale and purchase agreement is not executed, the parties may request the transfer title deed to be granted directly, in which case the full purchase price is paid to the seller at that time. Please note that this alternative needs to be reviewed because of the impact it may have under current exchange control regulations.
Yes. Under Argentine law, the owner of real estate will be liable for the propter rem obligations. This concept refers to obligations of the debtor that are based on the relationship that it has with the real estate (e.g., owner). In other words, propter rem obligations are those that “follow” the real estate. Under this scenario, the owner of real estate will inherit liability for matters relating to the real estate, even if they occurred before acquisition (e.g., municipal fees, taxes or water services).
Yes. Under Argentine law, the seller will, in principle, retain liabilities relating to latent or hidden defects (vicios redhibitorios or vicios ocultos) and any breach of the warranty of good and marketable title to the real estate (garantía de evicción).