Recent developments in connection with the Rural Land Law

On April 25, 2013, Regulation No. 1/2013 (the “Regulation 1”) enacted by the National Registry of Rural Land (the “National Registry”) was published on the Official Gazette.

Regulation 1 implements aspects of Law No. 26,737 (the “Rural Land Law” or “RLL”) and of the implementing regulations approved by Decree No. 274/2012, which imposed limits to the acquisition of rural land by foreign individuals and legal entities.

In addition, the media has recently reported that the NRRL completed the census of rural land provided by Section 15 of the RLL.

1. Regulation 1 of the Registry

The RLL establishes that the National Registry is empowered to grant authorization certificates. These certificates authorize the transfer to foreign individuals or entities of property or possession rights over rural land.

Regulation 1 deals with several aspects related to the authorization certificates:

i. It provides that the acquisition of rural property by a foreigner without an authorization certificate shall empower the National Registry to seek the nullification of the transaction.
ii. It clarifies that the authorization certificate shall be requested only in respect of those acts that fall within the transactions governed by the RLL.
iii. It identifies the documents to be filed by foreign individuals who are exempted from the restrictions imposed by the RLL, as stated in Section 4 of the RLL.
iv. It specifies the documents that shall be particularly considered for determining the nationality of foreign legal entities.

Regulation 1 provides that the authorization certificate shall be requested via Internet, signed in all its pages by the applicant, and submitted by mail to the National Registry. The applicant may be an individual, an attorney in fact, a legal representative or the intervening notary, as long as any of them has sufficient authority for this purpose.

The authorization certificate is valid for 60 calendar days. Therefore, the transfer deed shall be executed within that term.

Regulation 1 provides that no authorization certificate will be required for the transfer of property or possession rights over real estate properties that, independently from their cadastral nomenclature, are located in an “Industrial Area” or an “Industrial Park” duly registered before the National Registry of Industrial Parks, and which was created before the transaction took place.

Under the terms of Regulation 1, if a property is located in an industrial area or an industrial park, any act of acquisition, transfer or assignment of possessory rights over that property executed after the creation of such area or park, would not involve the transfer of rights over rural property; therefore, it would fall outside the scope of the RLL, independently of the acquirer’s nationality.

In that event, the intervening notary shall include in the transfer deed a statement asserting that the authorization certificate is not required since the property is located in an industrial area or an industrial park. The notary shall also mention the municipal or provincial legislation that has created the industrial area or the industrial park.

2. The Census of Rural Land

Section 15 of the RLL imposed on the National Registry the obligation to perform, within 180 days from its creation, a census in order to determine the property and possession of rural lands.

On June 9, 2013, the media reported that the National Registry would have completed such census.

As reported, the census has revealed that approximately 8% of the rural land in Argentina is owned by foreign individuals and foreign legal entities. This is more than half of the 15% limit set forth by the RLL.

The percentages corresponding to each province and municipality have not been reported, though the limit of 15% provided by the RLL is applicable to the national, provincial and municipal territory.

The percentages corresponding to the nationalities of the rural lands’ owners have not been reported. This fact is important since, according to the RLL, within that limit of 15%, foreigners of the same nationality may not own more than the 30% of the land.

If the census provided by the RLL has effectively been completed, it is possible that in the coming weeks the National Registry will release official information on this regard.