MEXICO Law and Practice Contributed by: Roberto Cannizzo, Carlo Cannizzo, Stefano Amato and Mauricio Moreno-Rey, Cannizzo
3.9 Effects of a Borrower Becoming Insolvent Under Mexican law, a borrower’s security interests in favour of a lender cannot be deemed invalid solely due to the borrower’s insolvency. However, if a borrower’s grant of security affects their creditors and leads to the borrower’s insolvency, the creditors may request that the security be declared void, as long as their claim precedes the grant. 3.10 Taxes on Loans As indicated in 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security , lenders’ and borrowers’ payment of recording fees or similar charges in connection with mortgage loans are gen - erally imposed at the state level and can vary from one state to another. Additionally, there will be the notary fees; in practice, the borrowers will absorb the aforementioned fees in relation to mortgage or mez - zanine loans, though this may vary depending on the transaction and the agreement between the parties. In Mexico, municipalities are the entities authorised to regulate planning and zoning matters, following cer - tain guidelines established by the Federal Congress and the states. At the state level, the applicable provisions are con - tained in State Development Plans and Partial Devel - opment Plans. At the municipal level, regulation is established through Municipal Development Plans and Urban Development Plans, which govern land use, zoning, urban density, and development param - eters. 4. Planning and Zoning 4.1 Planning and Zoning Framework These planning instruments commonly establish requirements related to the protection of natural resources, the proper implementation of urban ser - vices and integration with the surrounding environ - ment. They also impose legal restrictions, such as prohibitions on urbanisation in certain areas, require - ments to leave specific areas free of construction and limitations arising from the presence of infrastructure such as railways, drinking water systems, drainage,
electricity networks, telecommunications facilities and roads. Construction activities are further governed by local construction regulations issued by each state or municipality. These regulations control the design, appearance and method of construction of new build - ings or the refurbishment of existing buildings. In addi - tion, various aspects and limitations relating to the construction and refurbishment of properties may be included in local condominium by-laws and rules. The authorities responsible for administering and enforcing these controls depend on the relevant jurisdiction. Municipal authorities generally oversee zoning compliance, planning permits and construc - tion licences, while state authorities may participate in broader urban development planning. For certain projects, the federal authorities may also become involved, particularly where environmen - tal, archaeological or historical considerations arise. Examples include the Ministry of the Environment and Natural Resources, which oversees environmen - tal matters, and the National Institute of Anthropol - ogy and History, which regulates projects affecting archaeological zones and historical monuments. 4.2 Development Process, Challenges and Enforcement To obtain development rights in Mexico, developers must obtain a construction licence at the local level, which authorises activities such as building, extend - ing, modifying, repairing, installing, demolishing or dismantling structures or installations. Depending on the nature and location of the project, additional per - mits may be required. Certain jurisdictions require additional documentation prior to construction. For example, in Mexico City, water feasibility documentation may be required due to water supply constraints. In some cases, developers must also obtain environ - mental approvals, such as an Environmental Impact Authorisation. These procedures may include public participation mechanisms, such as public consulta - tions or opportunities for neighbours or affected com -
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