MEXICO Law and Practice Contributed by: Roberto Cannizzo, Carlo Cannizzo, Stefano Amato and Mauricio Moreno-Rey, Cannizzo
• Rural property – specific rules are provided in the civil codes to address, among other things: (a) the terms for payment of rent; (b) the rights of the tenant in the event of lack of productivity of the leased property; and (c) the minimum term of the lease. No specific COVID-19 legislation has been enacted. In addition to what was discussed in 6.3 Regulation of Rents or Lease Terms regard - ing the “unforeseeability theory”, it should be noted that judicial criteria have established that such a theory does not apply to commercial acts; therefore, its application to commercial leases could be challenged. 6.15 Effect of the Tenant’s Insolvency The Law on Commercial Insolvency ( Ley de Concursos Mercantiles ) provides that a ten - ant’s commercial insolvency does not terminate a lease agreement. However, the conciliator appointed for the insolvency procedure may ter - minate the agreement, in which case the com - pensation agreed in the lease must be paid to the landlord, or, failing that, an indemnity equal to three months’ rent, for early termination. 6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations The most common security requested by land - lords to ensure tenants’ compliance under lease agreements are: • security deposit ( depósito ), usually one or two months’ rent; • bond policy ( fianza ), issued by a bond insti - tution, which guarantees the fulfilment of a tenant’s obligations; • letter of credit; and/or
• a joint and several obligation by a third party ( obligado solidario ). 6.17 Right to Occupy After Termination or Expiry of a Lease Generally, a tenant is not entitled to continue occupying the leased property after the termi - nation of the lease agreement, and the landlord is entitled to enforce eviction. However, if the tenant continues to occupy the property without any objection from the landlord, the lease agree - ment will continue for an undetermined period. In such a case, either party may terminate the agreement by giving 30 days’ written notice to the other party in the case of residential prop - erty and one year in case of rural, commercial or industrial properties. 6.18 Right to Assign a Leasehold Interest The tenant may not sublet the leased property or a portion thereof, or assign the tenant’s rights, without the consent of the landlord. If breached, both the tenant and subtenant will be liable for damages. 6.19 Right to Terminate a Lease Pursuant to the federal and state civil codes, a landlord is entitled to terminate a lease in the following cases: • failure to pay the rent; • failure to use the property for the agreed- upon use; • subletting of the property, without the land - lord’s consent; • material damages to the leased property attributable to the tenant; and • where the tenant modifies the form of the leased property, without the express consent of the landlord.
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