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When it comes to buying real estate in Argentina, making sure you fully grasp the property sales contract is essential.
Indeed, not fully understanding the document you will sign can lead to financial losses, including the forfeiture of deposits, payment of penalties, unexpected costs, legal expenses, and potential poor investment decisions.
We've heard countless stories of people making costly mistakes when signing their property agreement in Argentina. We want to help you avoid the same experience.
We'll give here a very brief overview regarding the property sales contract in Argentina ; if you want a full checklist, please check our property pack for Argentina.
What is the Boleto de Compraventa in Argentina?
In Argentina, the property purchase agreement for real estate transactions is commonly referred to as the "Boleto de Compraventa."
This is a preliminary contract that outlines the terms and conditions of the property sale. It's an essential step in the process of buying or selling property in Argentina.
The Boleto de Compraventa is legally binding. Once signed, it commits both the buyer and the seller to the transaction under the agreed terms.
This agreement serves as a guarantee for both parties, it ensures the seller that the buyer is committed to the purchase, and it provides the buyer with a legal claim to the property.
This contract typically includes details like the property description, the agreed purchase price, payment terms, and any other relevant conditions. It's signed after the initial negotiations are complete and usually before the final deed (escritura pública) is signed, which is the last step in transferring property ownership.
For the buyer, a deposit is required when signing the Boleto de Compraventa. This deposit, often around 30% of the total purchase price, demonstrates the buyer's commitment and is applied towards the final purchase price.
In terms of international buyers or non-residents, there are a few additional considerations.
Argentina does not impose significant restrictions on foreign property ownership, but non-residents should be aware of certain regulatory requirements. For example, they must obtain a Tax Identification Number (CDI) from the Argentine tax authority (AFIP) and may face additional scrutiny in the transaction process to comply with anti-money laundering regulations.
Comparatively, property transactions in Argentina might differ from those in other countries in terms of legal formalities, the role of notaries, and specific regulatory requirements for foreigners.
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What should be included in the property purchase agreement in Argentina?
In Argentina, the property purchase agreement, known as the "Boleto de Compraventa," is governed by the Argentine Civil and Commercial Code (Código Civil y Comercial de la Nación).
This legal framework sets the standard for what such an agreement should contain and how it should be executed.
The Boleto de Compraventa should contain several key elements to be considered valid and enforceable:
| Key Element | Description |
|---|---|
Identification of the Parties |
The full names and identification details of both the buyer and the seller must be clearly stated. |
Property Description |
A detailed description of the property, including its location, size, boundaries, and any relevant physical characteristics. |
Purchase Price |
The agreed-upon price for the property should be clearly mentioned. |
Payment Terms |
Details about how and when the payment will be made, including any deposit or installment arrangements. |
Date of Possession |
The agreement should specify when the buyer will take possession of the property. |
Ensuring that all local regulations and requirements for property transfer are met. A clause stating that all rights and obligations related to the property will be transferred from the seller to the buyer upon completion of the sale.
Stating the current condition of the property and any responsibility for repairs or maintenance before the transfer. Outlining penalties if either party fails to meet their obligations under the agreement.
The purchase might be contingent on the buyer obtaining a mortgage or other financing.
Allowing the buyer to have the property inspected and possibly renegotiate or withdraw based on the findings.
Authentication by a notary is a critical part of the process.
In Argentina, the involvement of a notary public (escribano público) is mandatory for the final deed of sale (escritura pública), which is the document that legally transfers property ownership. The Boleto de Compraventa itself may also require notarization to ensure its legality and enforceability.
Real estate agents in Argentina play a significant role in facilitating the transaction.
They help in negotiating the terms, ensuring that all legal requirements are met, and often assist in drafting the Boleto de Compraventa.
However, they are not a substitute for legal advice, especially considering the complexities involved in real estate transactions.
What's the signing process like?
In Argentina, the signing process of the property purchase agreement, or "Boleto de Compraventa," is a critical step in real estate transactions.
Here's a breakdown of the process.
Both the buyer and the seller are required to sign the Boleto de Compraventa.
It is possible for there to be multiple buyers or sellers. In such cases, all parties involved must sign the agreement. The agreement is bilateral, meaning it binds both the buyer and the seller to its terms.
Identification (such as a DNI for Argentine nationals or a passport for foreigners), proof of property ownership, and any other relevant legal documents pertaining to the property.
Identification and, in some cases, proof of funds or financing.
Initially, both parties negotiate the terms of the sale, including the price and conditions. Once terms are agreed upon, the Boleto de Compraventa is drafted.
Both parties review the agreement, possibly with legal counsel, and make any necessary revisions.
The signing typically takes place within a few weeks of the agreement on terms, depending on how quickly both parties review and agree on the final draft.
Traditionally, both parties would be physically present for the signing, often in the presence of a notary.
With advancements in technology and legal acceptance of digital signatures, remote signing may be possible, though it’s advisable to check current local regulations and practices.
There’s no fixed deadline for signing; it depends on the agreement between the buyer and seller.
The contract's validity usually lasts until the final deed (escritura pública) is signed and the property is officially transferred.
The signed Boleto de Compraventa should be registered with the relevant local property registry to ensure legal recognition. Once signed, making amendments to the contract typically requires consent from both parties and may involve additional legal steps.
The completion of all necessary paperwork and approvals can vary greatly but usually takes several months. This process involves legal checks, obtaining necessary approvals, and preparing the final deed of sale.
It's crucial to ensure all details are accurate and agreed upon before signing. Both parties should ideally seek legal advice to navigate this process.
The registration of the agreement with local authorities is an important step for legal validity.
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How is the payment handled when signing a property purchase contract in Argentina?
Understanding the financial aspects of a property purchase agreement in Argentina is crucial for a smooth transaction.
Here's a breakdown of what you need to know.
Upon signing the Boleto de Compraventa (sales agreement), you are typically required to pay a down payment. The typical down payment is around 30% of the total purchase price, but this can vary based on the agreement with the seller.
Besides the down payment, there may be other upfront costs like notary fees, real estate agent fees, and any legal fees if you have engaged an attorney.
Payments are often made directly to the seller, but using an escrow account is also a common practice to ensure security for both parties.
The down payment is usually due at the time of signing the Boleto de Compraventa. Specific terms, including the payment schedule for the remainder, should be outlined in the agreement.
There are tax implications for both the buyer and seller. For the buyer, property transfer taxes (Impuesto de Sellos) apply, which can vary by province. The seller may be subject to capital gains tax depending on the circumstances of the sale.
You can negotiate the down payment amount with the seller, though much depends on market conditions and the seller's preferences.
If the sale falls through, whether the down payment is refundable depends on the terms of the Boleto de Compraventa.
Often, it's non-refundable unless the agreement includes specific contingencies, such as a failed inspection or financing falling through.
Typically, the down payment comes from personal funds. However, using a mortgage loan for the down payment is possible if arranged in advance, though this is less common.
A real estate agent or attorney can facilitate the payment process, ensuring all legal and procedural requirements are met. They play a crucial role in drafting the agreement and guiding you through the financial aspects.
Always request a receipt or confirmation of payment when making the down payment. This serves as proof of transaction and is important for your records.
Besides property transfer taxes, as a buyer, you might also need to consider ongoing property taxes. The seller is responsible for any capital gains tax on the sale.
What are the potentials risks and pitfalls?
You might be interested in reading our article about the common risks and pitfalls surrounding a property transaction in Argentina.
Understanding the risks and pitfalls in the property purchase agreement during a real estate transaction in Argentina is essential for both buyers and sellers.
Both parties can potentially withdraw from the agreement, but this is subject to the terms specified in the Boleto de Compraventa.
In Argentina, there isn't a standardized cooling-off period in real estate transactions. Any such period would need to be explicitly agreed upon in the contract.
Withdrawal generally requires a valid motive, aligned with the terms of the agreement.
For example, a buyer might back out if they are unable to secure financing, but only if this was stipulated as a contingency in the contract.
If one party fails to fulfill their obligations, penalties will depend on the contract terms. They often involve forfeiting the down payment or paying compensation.
If the buyer withdraws without a valid reason or contingency, they may lose their down payment. If the seller fails to honor the agreement, they might be required to return the down payment with additional compensation.
The process in Argentina can differ from other countries, particularly in terms of legal requirements, the role of notaries, and specific clauses in the sales agreement.
For international buyers, additional complexities such as currency exchange, tax implications, and legal differences must be navigated.
Key risks include misunderstandings of the contract terms, failure to properly inspect the property, or issues with securing financing.
Buyers should be wary of unclear property titles, unapproved building extensions, or undisclosed debts tied to the property.
Disputes can arise over property conditions, payment terms, or failure to disclose relevant information. Disputes are typically resolved through negotiation, mediation, or, as a last resort, legal action. The terms of the Boleto de Compraventa often dictate the dispute resolution process.
If defects or issues are discovered after signing, the buyer may seek legal recourse if these were not disclosed prior to the sale. The outcome will depend on the contract terms and the nature of the defects.
Real-life disputes might include a seller backing out due to a higher offer, or a buyer discovering post-sale that the property has structural issues not disclosed earlier.
These disputes are often resolved through financial compensation, renegotiation of the sale terms, or legal proceedings if necessary.
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.