MEXICO Law and Practice Contributed by: Roberto Cannizzo, Carlo Cannizzo, Stefano Amato and Mauricio Moreno-Rey, Cannizzo
6.14 Tenant’s Ability to Alter and Improve Real Estate The federal and state civil codes stipulate that a tenant cannot alter the form of the leased prop - erty without the landlord’s express consent. If such provision is breached, the tenant is respon - sible for restoring the leased property to its origi - nal state and paying the damages caused to the landlord. Usually, improvements are paid by the tenant; in exceptional cases, the landlord must pay them if they are useful, urgent or authorised improvements. 6.15 Specific Regulations Premises used for commercial, industrial, office or retail purposes are usually subject to the same set of rules. The federal and state civil codes contain a specific set of rules for residential and rural properties. • Properties intended for residential purposes – specific rules are provided in the civil codes to address, among other things: (a) hygiene and health conditions, and mini - mum term of lease; (b) the preferential right of the tenant to acquire the leased property or enter into a new lease; and (c) currency for payment of the rent. Rules applicable to residential leases are usu - ally considered to be of public order and social interest, and, therefore, they are not waivable. • 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.
In addition to what was discussed in 6.3 Regu- lation of Rents or Lease Terms regarding 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. 6.16 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. 6.17 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 generally by giving 30 days’ written notice to the other party in the case of residential property and one year in case of rural, commer - cial 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 should be liable for damages.
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