Commercial Security Deposits in Mexico: Rules and Usages

Governed by the Federal Civil Code (Código Civil Federal - CCF) via Article 2 of the Commercial Code (Código de Comercio), the commercial security deposit in Mexico is a realm of absolute free designation. Unlike residential leasing which tends to cap requirements at one month (Art. 2448-E), corporations, shopping plazas, or industrial warehouse owners draft negotiations anchored in strong private patrimonial protection.

Customary Amounts ("Full Freedom")

Without any limits within the Federal Civil Code for this B2B (Business to Business) classification, parties have full freedom to negotiate amounts under Article 1839 of the CCF (Freedom of Contract). Real estate administrators typically dictate highly solvent conditions as protection against physical damage:

1. Smaller Premises (Street Retail): Two months' rent as a baseline requirement to protect storefronts and investments in build-outs either performed or requiring subsequent demolition.
2. Shopping Plazas / Cinemas / Sub-anchors: Up to three (3) months' rent, plus a multi-risk policy or joint insurances.
3. Industrial Warehouses (BTS - Build to Suit): Figures run in the millions, and deposits or "Standby Letters of Credit" from banks function as guarantees for 10-year contracts, assuring the builder backing against early rescission.

The Controversial "Key Money" (Derecho de Guante)

It is a lawful practice in Mexico's commercial market to charge a "Guante" (Glove), permitted under the principle of "Autonomía de la Voluntad" (Article 1839 CCF). This is a non-refundable entry fee agreed upon by both parties for the privilege of securing a coveted space or to compensate for high structural costs. Since the "Guante" is an income "invoiced and taxed at 100% unilaterally", it is distinct from a security deposit and does not fall under the "Refundable" section of the lease. It is treated as taxable income for the landlord and is deductible for the tenant under different accounting treatments.

Holding Period and B2B Modality

Under Article 2422 of the CCF, the tenant must return the property in the condition it was received. The Federal Civil Code does not provide a specific statutory window (such as 60 or 90 days) for the return of the deposit. The deposit must be returned upon the termination of the lease and the fulfillment of all tenant obligations, such as the payment of utilities and repairs. Any specific return timeline for administrative review must be expressly stipulated in the lease agreement to be enforceable. This period is often used to review documents such as High Tension CFE (electricity) rates or mercantile licenses.

Tenant Improvements (Adecuaciones):

Under Article 2423 of the CCF, the tenant cannot modify the property without express consent and must restore it to its original state upon return. Landlords are legally entitled to use the security deposit to cover the costs of restoring the premises if the tenant fails to revert modifications (such as "drywall" partitions) to the original shell of the premises as agreed in the lease.

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