Commercial Lease Laws in Mexico: National Guide
A comprehensive overview of commercial leasing laws in Mexico: land use, evictions from business premises, freedom of contract, and tax considerations.
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The leasing of commercial properties (offices, retail stores, warehouses, and industrial parks) in Mexico is governed by principles of extreme contractual freedom. Unlike residential leasing, which has nuances of social protection towards the tenant, a commercial relationship is considered an agreement between business entities, where the terms negotiated in the contract act as the supreme law between the parties.
Key Differences: Commercial vs. Residential
Security Deposits and "Key Money" (Derecho de Guante)
In the commercial sector, the owner dictates the deposit amount based on the risk of the business or the investment (the build-outs). It is standard to require 2 months' rent as a deposit. Furthermore, in highly sought-after locations or shopping centers, the practice of "Derecho de Guante" (also called key money) exists in Mexico. This is a non-refundable payment from the tenant to the landlord simply for the privilege of accessing the location.
For more details, see our Commercial Security Deposits guide.
Freedom of Rent Increases
Article 2448-D in CDMX and strict residential protection regulations do not apply to businesses or industry. Rent can be increased freely as agreed. The standard is to establish a fixed annual increase (e.g., 6% or 8%) or an increase linked to inflation (INPC). Many retail contracts also incorporate a "Variable Rent" (Percentage Rent), where the tenant pays a percentage of their gross sales in addition to the base rent (very common in modern Mexican retail).
For more details, see our Commercial Rent Increases guide.
Land Use and Civil Protection Responsibilities
One of the main causes of conflict (and business closure) in Mexico is bureaucratic paperwork. The landlord usually provides the space, but it is the total responsibility of the lessee (commercial tenant) to process and obtain the Operating License (Licencia de Funcionamiento), the specific Land Use Certificate (Uso de Suelo) for their twist/business type, and the Civil Protection Visto Bueno (Approval). If Civil Protection shuts down the premises due to the tenant's non-compliance with safety measures, the landlord is usually protected if the contract specifies the delimitation of liability.
For more details, see our Commercial Required Disclosures guide.
The Commercial Eviction Process
A commercial eviction (Commercial Lease Controversy) also requires a civil judicial process. However, commercial landlords in Mexico assume another type of risk: labor lawsuits. If the tenant's business goes bankrupt and its employees sue it before the Conciliation and Arbitration Board (now Labor Courts), there is a risk that the authority will seize movable assets inside the premises before the landlord achieves eviction, or worse still, if there's simulated collusion.
For more details, see our Commercial Eviction Process guide.
Strict Contractual Requirements (B2B)
Commercial contracts are extremely detailed instruments. They strictly must stipulate:
- That the destination is strictly commercial or industrial (Art. 2412).
- Build-out Clauses (Adecuaciones): What type of civil work the tenant can carry out to adapt their business and whether those improvements will "remain for the benefit of the property" or if the tenant must revert them upon handing over the unit.
- Mandatory Civil Liability Insurance.
- Ratification of signatures before a Notary Public.
Furthermore, due to the demands of the SAT (Tax Administration Service), issuing a CFDI (electronic invoice) is unavoidable so that the corporation can deduct profitability and endorse income transfers, ISR (Income Tax), and IVA (VAT).
For more details, see our Commercial Lease Requirements guide.
How Landager Helps
Managing a portfolio of industrial warehouses, clinics, retail spaces, or corporate suites in Mexican territory demands above-average automation. Landager ensures that maturity dates projected to five or ten years can efficiently calculate the annual collection adjusted to the automatic INPC in all its modules, also keeping safe in its cloud the structural polygons, the notarized deeds that prove each agreement, and the civil liability policies tied to your commercial tenant.
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