Real Estate Law in Argentina

The main provisions governing the acquisition of assets in Argentina are set forth in the Argentine Civil and Commercial Code (CCCN), which applies to all real estate located in Argentina. The CCCN came into effect on 1 August 2015, and introduced new categories in the real estate legal regime such as surface rights, indigenous community property, and real estate developments (e.g., country clubs).

Real estate rights are regulated by the CCCN under the numerus clausus principle, which limits the number and content of property rights to the forms expressly set forth in the legal system.

The main rights in real estate ownership are: (i) sole ownership right (dominio), which confers all the powers to legally and materially dispose of real property; (ii) joint ownership right (condominio), which is the right over a real estate property that belongs to more than one owner, where each title owner owns an undivided portion of said property; and (iii) real estate developments, which encompass all types of residential developments (e.g., country clubs, gated communities, commercial or nautical parks) in this type of development, common and individual areas coexist.

In addition to ownership rights, there are other alternatives to participate in the real estate market in Argentina, such as: (i) real estate trusts, mainly regulated by the CCCN; and (ii) participation as shareholder or quota holder in companies that own real estate, particularly for long-term commercial purposes.

Argentina is organized politically as a federal country and its provinces have jurisdiction over all matters that have not been delegated to the federal government through the Federal Constitution. Therefore, real estate property is also subject to local regulations related to the organization and use of properties (including zoning and edification regulations and the grant of permits when required), the protection of historic places and environmental regulations, which may vary depending on the relevant jurisdiction.

Acquisition structure usually applied in real estate transactions

Under the Argentine legal framework, the creation, transfer, and modification of rights over real estate property must be executed through a public deed before a notary public and must be registered with the real estate registry of the relevant province.

Despite not being mandatory, it is common practice in transactions to acquire ownership over real estate by executing a preliminary purchase agreement (boleto de compraventa), which establishes valid and binding obligations between the parties to grant the public deed and complete the transfer of ownership over the property. Among the legal implications of this type of agreement, pursuant to Section 1170 of the CCCN, a good faith purchaser who has entered into a boleto de compraventa has priority over seizure orders (embargos) or other precautionary measures on real property provided that: (i) the purchaser contracted with the legal title holder, or may be subrogated to the legal position of such purchaser by means of a perfect chain of title that links successive owners of the relevant property; (ii) the purchaser paid 25% or more of the purchase price before such precautionary measure; (iii) the date of the preliminary agreement can be accredited through sufficient evidence under the provisions of the CCCN; and (iv) the acquisition has sufficient publicity through possession or registration with the relevant real estate registry.

Furthermore, Section 146 of the Bankruptcy Law No. 24,522, as amended (Bankruptcy Law) and Section 1171 of the CCCN also provide protection to good faith purchasers who have paid 25% or more of the purchase price under a boleto de compraventa, which are considered to be enforceable against other creditors in case of a reorganization or bankruptcy proceeding of the seller.

Before the execution of the public deed, the notary public conducts due diligence that includes obtaining the certificate of title issued by the real estate registry, to prove ownership and the existence of taxes levied on the property or the existence of precautionary measures. More information on the role of the notary public is in section "Notary role in the real estate transactions".

Restrictions applicable to foreigners or to specific areas of the country or others, in real estate acquisitions

In Argentina, there are certain restrictions on foreign citizens and companies regarding the acquisition of real estate in certain areas considered as “security zones”, which are mainly located in border zones. In this regard, Decree Law No. 15,385/44 establishes limitations on the acquisition, lease, or other types of possession of real estate by foreign individuals or foreign companies in the areas defined as “security zones” by the applicable regulation. Such limitations entail the prior consent of the relevant federal agency.

Another restriction on foreign citizens and companies is related to certain acquisitions of rural land depending on the extension of the rural land and its location. Indeed, Law No. 26,737 (the Rural Lands Law or RLL) and its Regulatory Decree No. 274/2012, as amended and restated, sets forth limits to foreigners in the ownership and possessions of “rural lands” as such term is defined by the RLL and its Regulatory Decree. It is important to point out that as of 20 December 2023, presidential Decree No. 70/2023 (the Decree 70) abrogated the RLL in its entirety (Section 154 of the Decree 70). However, it is worth noting that until the publication date of the present chapter, several lawsuits against the abrogation has been filed bringing uncertainty to the actual validity of such abrogation that is pending final ruling from superior tribunals1. Nevertheless, the Decree 70 sets a precedent indicating a trend towards market deregulation.

Pursuant to the RLL provisions, foreign ownership or possession of rural lands is construed as any operation involving acquisition, transfer, assignment of possessory rights and/or the temporary extension thereof in favor of, among other cases: individuals of foreign nationality (with certain exceptions also provided by the RLL, such as individuals who have held residence in the country for over 10 years); legal entities incorporated under the laws of Argentina or abroad, when more than 51% of the capital stock or a portion thereof enough to prevail in corporate decisions is held by foreign individuals or legal entities; foreign public entities; etc.

As an example of the restrictions set forth by the RLL, foreign ownership of rural lands must not exceed 15% of the total amount of “rural lands” in the whole Argentine territory or in the territory of the relevant province or municipality where the relevant lands are located. Additionally, individuals or legal entities of the same nationality will not be able to own or possess rural lands that represent more than 30% of the 15% previously mentioned. Another relevant restriction set forth by the RLL relates to rural lands adjacent to certain bodies of water, in which case the RLL prohibits foreign ownership.

Confirmed title to real estate requires the execution of a public deed, the transfer of the property, and the registration with the relevant real estate registry.

Due to the federal organization of Argentina’s political system, the provinces have exclusive jurisdiction over the organization of the real estate registries. There are 24 real estate registries in Argentina, one for each province and another one for the Autonomous City of Buenos Aires. Each real estate registry has its own particular rules and regulations; however, they must conform to the provisions established in the federal Law No. 17,801 on Real Estate Registers.

The main documents that must be generally filed and registered with the local real estate registries are: (i) public deeds that create, transfer, declare, modify, or extinguish property rights; and (ii) judicial rulings that order cessations (embargos) or any other type of preliminary injunction (medidas cautelares) on real property.

The information held in real estate registries is publicly accessible and available to any person with a legitimate interest in discovering the status of a real estate property. However, requests for information can only be signed by certain professionals (e.g., lawyers, notary publics).

The Argentine legal framework follows the civil law system, where the notary public is appointed to exercise a public function delegated by the state, which consists of conferring authenticity to all acts that passed before the notary public.

Moreover, in real estate transactions, the deed of conveyance must be executed before a notary public to complete the purchase and effect the transfer of ownership. The notary public is also responsible for (i) conducting title searches of the property before the relevant real estate registry; (ii) verifying that the seller has good title on the property; (iii) verifying that the property is free and clear of liens and encumbrances; (iv) checking the identity of the parties; (v) verifying the source of funds; (vi) withholding the percentage of the sale price subject to stamp tax, income tax and/or property sales tax, as applicable, property taxes and other taxes that remunerate the rendering of public services (e.g., lighting, cleaning services); and (vii) filing the deed of conveyance with the relevant real estate registry for its registration.

Pursuant to Section 20, paragraph 17 of Law No. 25,246 (as amended and restated, the Anti-money Laundering and Counter Terrorism Financing Law), public notaries are informing agents (sujetos obligados) that must collect general information of their clients and report to the Financial Information Unit (UIF as per its acronym in Spanish) the activities of individuals or legal entities that may imply an act or transaction that is suspicious of money laundering or terrorism financing, according to the regulation set forth by the UIF.

Real estate transactions are customarily negotiated on an “as is” basis. However, the CCCN provides for certain implied warranties on a sale granted by the seller to the buyer. These warranties imply: (i) that the seller has good and valid title, and that the property is free and clear of encumbrances (garantía de evicción); and (ii) that the property has no hidden defects (garantía por vicios redhibitorios).

Eviction warranty

It guarantees the existence and legitimacy of the conveyed right. In real estate transactions, the liability extends to any total or partial encumbrance of rights, whether prior to or simultaneous with the acquisition, and to all disturbances caused by the transferor.

Hidden defects warranty

The liability extends to all those defects that the purchaser did not know or could not have known about at the time of the transaction, and defects of the good existing prior to the transaction. Likewise, it extends to those defects that make the thing unfit for its purpose, whether by structural or functional reasons, or that reduce its usefulness to such an extent that, if the purchaser knew them, would not have acquired the asset, or its consideration would have been lower (vicios redhibitorios).

The CCCN establishes that liability for hidden defects in real estate expires after three years from receipt of the property.

Among the contractual representations and warranties commonly granted to the buyer by the seller, the more relevant include: (i) the title to the real property is good, valid, and marketable, free, and clear of all encumbrances, other than those permitted; and (ii) the absence of proceedings, claims, disputes, or conditions affecting any real property that might interfere with the use of the property.

Mortgages over real estate may secure the principal amount, accrued interest, and other related expenses owed by the debtor to the creditor.

Sections 2188 and 2189 of the CCCN set forth the “specialty” principle, which requires (i) proper identification of the underlying property; and (ii) proper identification of the maximum obligation secured through the mortgage in monetary terms. The principle will be regarded as fulfilled in case of conditional or undetermined obligations if a maximum amount of the guaranty is expressly established in the creation of the mortgage and the term of the guaranty does not exceed 10 years.

Pursuant to Section 2208 of the CCCN, mortgages over real estate must be created through a notarial deed.

In order to be effective vis-à-vis third parties, mortgages must be registered with the public real estate registry of the jurisdiction where the property is located, and such registration expires after 35 years if renewed before

Priority in case of more than one mortgage over a real estate asset will depend on the chronological order in which each mortgage is registered with the public real estate registry of the jurisdiction where the property is located. The general rule is that the first creditor to record it prevails over subsequent creditors. Foreclosure is conducted through a special summary proceeding allowing the property to be sold at a public auction.

Leases – intended for residential and commercial use – are mainly governed by the CCCN, as amended by Decree 70 which main purpose was to deregulate several economical activities including this type of contracts. Rural leases are subject to a specific legal regime established by Law No. 13,246 (Rural Leases Law).

Certain provisions of the CCCN and the Rural Leases Law (which mainly intend to protect the lessee) are considered mandatory (public order “orden público”). However, many provisions traditionally considered as of public order were modified by Decree 70. Indeed, Section 1198 that regulates the term of the contract was replaced eliminating the obligation of a minimum term of two years establishing that the lease term will be the one agreed upon by the parties. If no minimum term is expressly stipulated, the law presumes a term of two years for leases intended for permanent housing and three years for other purposes. Furthermore, regarding lease contracts, it is important to point out other modification brought by Decree 70, since it has established that the payment currency of the lease agreements can be set either in local or in foreign currency (Section 1199 of the CCN as amended by the Decree 70). In addition, it allows the parties to freely set the index by which the price of the lease agreement will be adjusted.

The maximum term for commercial leases is 50 years.

Rural Leases Law stipulates a three-year period as the legal minimum term for rural leases.

Urban development in Argentina is mainly governed by provincial and municipal zoning regulations and building codes; therefore, they differ in each jurisdiction.

In the Autonomous City of Buenos Aires, the Urban Code (Código Urbanístico) approved by Law No. 6,099/2018 (as amended by Law No. 6564/22) and its Regulatory Decree No. 99/2019 provide regulations for the use of land and subsoil, the transfer of public space, the subdivision and the opening of public roads and the application of building standards. Furthermore, the Building Code (Código de Edificación) approved by Law No. 6,100, provides a set of rules that specify the standards for construction in the city. The Building Code requires obtaining several permits and authorizations prior to the commencement of the construction. Additionally, sufficient notice of commencement of construction (Aviso de Obra), with detail of its scope, must be filed with the relevant authority prior to the initiation of the works.

There are also national and local regulations that foresee the protection of historic monuments when a particular property has been declared of “public use”.

Pursuant to Section 1757 of the CCCCN, damage caused as a consequence of the development of dangerous activities, including environmental damages, is subject to objective liability. Any injured person may seek compensation from the owner or custodian of an asset that produces environmental damage. Similarly, the transferor of an asset that has a defect and later causes environmental damage may be liable even after the transfer.

The federal government sets the minimum environmental standards for the protection of the environment, and the provinces and municipalities establish specific standards and implementing regulations. The provinces have also enacted environmental laws requiring companies to prepare and file environmental impact statements in order to obtain the relevant permits.

The National Environmental Policy Law No. 25,675 (EPL) establishes that for collective environmental damage caused by legal entities, liability can be extended to their managers, directors, statutory auditors, or other officers who participate in the company's decision. Furthermore, any activity that could affect the environment or any of its components, or affect the quality of life of the population, is subject to an environmental impact evaluation procedure before the relevant authorities prior to its initiation. The environmental impact evaluation must contain, at least, a detailed description of the project of the work or activity to be carried out, the identification of the consequences on the environment, and the actions intended to mitigate the negative effects.

Within the framework of the EPL, the National Secretariat of Environment and Sustainable Development and the Housing Secretariat issued the Joint Resolution No. 2/2019 dated 2 October 2019 (Resolution 2/19) which implements the Sustainable Housing Federal Strategy (Sustainable Housing Strategy). The Sustainable Housing Strategy aims to promote bioclimatic housing design; expand the scope of existing programs in order to achieve more efficiency, housing comfort and sustainable development; and facilitate access to financing.

Certain local jurisdictions have enacted laws and regulations with the purpose of improving the sustainability of newly constructed and existing buildings, such as: Law No. 13,059 of the Province of Buenos Aires, which establishes thermal isolation conditions in the construction of buildings for a better quality of life and reduction of environmental impact; Law No. 4,428 of the City of Buenos Aires which establishes a reduction of municipal taxes for buildings that implement green terraces; and Ordinance No 8,757 of the City of Rosario regarding efficient use of energy in the construction of new buildings.

For the sale of property, and for properties acquired as of 1 January 2018 income tax will be levied at a rate of 15% of the sale price minus cost. If the property has a housing purpose, an exemption applies and the sale in principle will not be subject to tax.

Chapter authors and key jurisdiction contacts: Eduardo Patricio Bonis | Deloitte Legal | Argentina

Download: Handbook for Real Estate Transactions