The Proposed Rental Ban on Social Housing
Peru’s Ministry of Housing published a draft regulation for the Social Interest Housing Law (Law 32379) in late July, introducing a strict occupancy requirement for households that receive state subsidies to buy a home. Under the proposal, beneficiaries must live in the property as their primary residence for five years and are explicitly barred from renting it out during that period. The rule is designed to ensure that public subsidies serve their intended purpose—reducing the country’s qualitative and quantitative housing deficit—rather than becoming a source of rental income for recipients.
Anyone who violates the prohibition would lose access to future state housing support and face administrative sanctions. The regulation also clarifies that if a beneficiary stops living in the home, leases it, or otherwise breaches the subsidy’s conditions, the state can act against them. Legal experts consulted by Gestion stress that the restriction is temporary, tied to the subsidy regime, and does not eliminate property rights; it only suspends the right to dispose of the property through rental for the agreed term.
The draft regulation is now under public consultation, and details—such as the exact sanctions and any possible exceptions for hardship—are still being defined. For potential applicants, the message is clear: accepting a subsidized home means committing to live in it, not running it as a business.
Legal and Practical Implications of Peru’s Social Housing Restriction
A Social Mission, Not a Property Grab
The government’s logic is grounded in Article 70 of Peru’s Constitution, which safeguards property rights but also mandates that property be exercised in harmony with the common good and within legal limits. Civil attorney Miguel Flórez Galecio, partner at Lawtech, points out that the proposed restraint is not an arbitrary seizure but a legitimate, time-limited condition attached to a state subsidy. “We are not facing an arbitrary infringement of property, but a temporary limitation tied to a special regime of access to a state subsidy,” he told Gestion. The rule expires after five years, after which the owner regains full freedom to rent or sell.
What Happens When the Rules Are Broken
The regulation would impose administrative consequences, such as the loss of eligibility for other public housing programs, without necessarily voiding a private rental contract. Fernando Castañeda, an attorney specializing in real estate law and partner at Aramburú Castañeda Boero Abogados, explains that unless the regulation explicitly declares a lease void, it could remain valid under civil law even if the owner faces state penalties. Criminal liability would only come into play in cases of fraud—for example, falsifying documents or making false statements to obtain the subsidy—since criminal law is a last resort.
Gaps Around Life’s Unpredictable Turns
The current draft lacks a clear catalogue of exceptions for extraordinary circumstances such as job relocations, serious illness, domestic violence, or force majeure. Flórez Galecio recommends that the final regulation incorporate objective mechanisms to address these cases without undermining the social purpose of the subsidy. Similarly, the text does not specify how restrictions apply during succession, divorce, or other involuntary transfers of ownership—a gap that could complicate enforcement for heirs or separated spouses.
The Role of Registrars and Notaries
To prevent illegal rentals, the system relies on public registries. If a property is flagged as belonging to the social housing regime, any notary, registrar, or potential tenant who checks the record would see the restriction. This transparency should discourage contracts that violate the ban: a would-be renter, aware that the property cannot legally be leased, would likely walk away, and notaries would refuse to formalize such a deal. The regulation thus turns the registry into an enforcement tool, though its effectiveness hinges on prompt and accurate registration of the restriction at the time of purchase.
What Beneficiaries, Notaries, and Policymakers Should Know
For potential beneficiaries: Understand that accepting a subsidized home under this program means committing to at least five years of continuous occupancy. The property cannot be used as a rental investment; short-term income plans are incompatible with the subsidy.
For notaries and registrars: Verify in the public registry whether a property is subject to social housing restrictions before authorizing any lease or transfer. Refusing to formalize a contract that violates the ban will be essential to avoid facilitating illegal acts.
For policymakers: The final regulation should include clear hardship exceptions—for example, job transfers, severe illness, or domestic violence—so that strict compliance does not create unfair outcomes. It should also address what happens in cases of inheritance or divorce to prevent legal uncertainty for families.
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