The Board of Directors of the Central Bank of the Argentine Republic (BCRA) today approved the incorporation of the “surface right” as a bank guarantee. The measure will improve the conditions of access to bank credit for many agricultural producers and other sectors that have a right to exploit a piece of land but are not its owners.
The “surface right” was introduced into the Civil and Commercial Code of the Nation through the reform of Law 26,994. It is a new temporary right in rem, which is constituted over someone else’s property and grants its owner (the “surface”) “the power of use, enjoyment and material and legal disposition of the right to plant, forest or build, or over what is planted, forested or built on the land, the flight or the subsoil” (Article 2114).
Its use is frequently used in sectors such as agriculture, construction and forestry, in which a producer economically exploits a property in the medium or long term, but without owning it, which prevents him from accessing traditional mortgage financing.
By virtue of this change provided by the BCRA, entrepreneurs who do not have their own real estate will be able to carry out investment projects through bank financing, offering as collateral the flow of funds from commercial exploitation.
The “surface right” appears with a similar treatment in the regulations of several countries, such as France, Spain, Germany, Belgium, Portugal, Japan, Switzerland, Austria, Bolivia, Peru and Brazil.
In this way, the BCRA continues to expand the availability of credit for productive activity. The changes developed in the last year have generated a growth in commercial loans of 45% year-on-year and 26% in the first seven months of 2017.
