Updates on Country Clubs and Real Estate Associations

On February 14, 2024, the Public Registry of Commerce (IGJ) issued General Resolution 4/2024, which modified IGJ Resolution 25/2020 and repealed IGJ Resolution 27/2020, both regarding country clubs and real estate associations.

The previous IGJ regulations required country clubs and real estate associations organized as civil associations under the form of corporations according to article 3 of the General Companies Law 19550 (LGS) to, within a strict deadline, adapt to the provisions of the real estate regime of horizontal property, following article 2075 paragraph 3 of the Civil and Commercial Code (CCCN).

Non-compliance with this requirement enabled the IGJ to reject the registration of corporate acts from these civil associations, and even to impose sanctions to their administrators and statutory auditors, as established in article 302 paragraph 3 of the LGS.

Highlights of IGJ Resolution 4/2024

As from the date the IGJ Resolution 4/2024 becomes enforceable (February 14, 2024), the obligation of adaptation imposed through IGJ Resolutions 25 and 27/2020 is repealed. Consequently, the adaptation procedure of article 2075 paragraph 3 of the CCCN becomes optional for country clubs and real estate associations that existed before the reform of the CCCN (passed in 2015).

The main aspects of IGJ Resolution 4/2024 are:

1.            If an existing country club or real estate association opts for the adaptation regulated in the CCCN, they must (i) adapt their bylaws and (ii) issue an Adapted  Regulation including the current regulations—if they exist—, adjusting them or approving new ones that adapt the operations of the entity to the CCCN regulations regarding real estate associations.

2.            It eliminates the registration restrictions of corporate acts from these civil associations.

3.            These civil associations may change their domicile to another jurisdiction without the IGJ being able to demand functional adaptation, following the general procedure established in IGJ General Resolution 7/2015 article 90.

In short, IGJ Resolution 4/2024 has limited the IGJ’s scope of competence regarding real property matters, providing greater autonomy to existing country clubs and real estate associations, their governing boards, and their owners, as to their organization and operation.