Leasing Process in Mexico

1. BACKGROUND
Historically, in Mexico, the law favored the tenant, making it harder for the landlord to increase the rents and/or evict the tenant upon the termination of the contract. Consequently, contracts were designed to the protect the landlord as much as possible, but in 1993, the law regarding leases in Mexico City (Federal District) was modified in order to expedite the lawsuits against the tenants, with the resulting benefits for all.

As each state in Mexico has different laws regarding leases, it is advisible that a lawyer or a reputable real estate broker be consulted before signing any agreement.

Some years ago, the housing leasing market in areas such as Mexico City, had a very high demand with minimum supply. Therfore, rents, in general, were relatively high.

Presently, the situation has reverted because property owners, unwilling to sell due to the economic situation are choosing to lease as an alternative to selling, as a result, markets reflect a tendency for lower rents.

2. TERMS
The normal and basic terms of lease agreement are:
A.- One year contracts are common, particularly in housing. Commercial and industrial properties are normally leased for longer terms with predetermined formulas to adjust the rent annually.
B.- In some cases a co-signer or a bond is necessary in most cases.
C.- A deposit equivalent to 1-2 months rent is normally required.
D.- Generally, refurbishing is responsibility of the tenant.
E.- All utilities as well as condo maintenance fees, telephone, cable vision and other optional services such as special area security, are usually paid by the tenant.

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