MEXICO Law and Practice Contributed by: Roberto Cannizzo, Carlo Cannizzo, Stefano Amato and Mauricio Moreno-Rey, Cannizzo
6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time Mexican civil law recognises four arrangements that allow a person to occupy and use a real property for a limited period, without buying it outright: • the lease – ie, the agreement through which one of the parties grants to the other party the right to temporarily use or enjoy a property, and the other party agrees to pay a certain price for such use or enjoyment; • the commodatum or free lease – ie, the agreement through which one of the parties grants to the other party the free use of a property; • the real right of occupation, which grants to the right-holder the right to freely occupy part of another person’s house, for themselves and/or family members; and • the real right of usufruct – ie, the real and tempo - rary right to enjoy another person’s property and to receive all the fruits, whether natural, industrial or civil, which it produces. 6.2 Types of Commercial Leases Mexican civil law recognises only one type of lease agreement, although specific rules are provided in the federal and state civil codes, depending on the pur - pose or location of the leased premises. 6.3 Regulation of Rents or Lease Terms Lease terms are freely negotiable, but federal and state civil codes impose binding provisions, mainly for residential leases and, in some states, commercial leases (eg, a 20-year maximum duration). Reviewing state Civil Codes is essential. It should be noted that Civil Codes already contain legal provisions applicable to the impediment of the use of leased premises, mainly in commercial leases where the leased premises cannot be operated due to a force majeure. For example, Article 2431 of the Fed - eral Civil Code, also applicable to commercial leases, provides that, if, by reason of an Act of God or force majeure, the tenant is completely prevented from using the leased premises, no rent shall be due while the impediment lasts, and if such impediment lasts
5.5 Applicable Governance Requirements Stock Companies and LLCs The obligations of a stock company and LLC are imposed on the directors by law, and by the com - pany’s by-laws. The directors are jointly liable with the company for compliance with legal and statutory requirements as follows: • in relation to the dividends; • for the existence and maintenance of the account - ing, control, recording, filing or reporting required by law; • for the fulfilment of the shareholders’/partners’ resolutions; • for the creation of the reserve fund required by law; and • for compliance with applicable regulatory obliga - tions, including tax, anti-money laundering and beneficial ownership disclosure requirements. Some other special liabilities are provided by law. Generally, a company’s officers include at least one director (who, in such a case, will act as sole adminis - trator). Furthermore, stock companies must designate one or more statutory auditors; this requirement does not apply to LLCs, unless voluntarily provided in the by-laws. Directors or employees of a company cannot be internal auditors for that company. FIBRAs FIBRAs must comply with certain corporate govern - ance standards and best practices among sharehold - ers, investors, management and the technical com - mittee, like all companies listed on the BMV. 5.6 Annual Entity Maintenance and Accounting Compliance In Mexico, there is no annual fee/tax for the simple existence of a company. Since companies must peri - odically comply with administrative and tax require - ments, the maintenance cost will depend on the nature, complexity, volume and frequency of the transactions and operations carried out.
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