Rental Periods

Rental agreements are by law (as per the Civil Code) for one year, although extensions or different periods may be agreed upon. The law establishes tacit renewal for rental agreements – after the contract expires, the tenant may continue to occupy the property and pay rent under the same terms and conditions as agreed to in the original contract. However, tenants may be asked to sign a new contract at the end of the original agreement, which should be reviewed carefully before signing.

If no time period was specified in the rental agreement, either party may end the agreement at any time, but must provide at least 30 days’ notice. If the time period is specified, the tenant or landlords must provide 30 days’ notice before the contract’s expiry.

If the property is sold during the period of the rental agreement, the tenant continues to pay rent to the new owner for the duration of the contract or they can negotiate a new contract, which is advisable to do, especially for the new owner. However, the new owner may terminate the contract with 30 days’ notice.

A penalty for breaking a rental agreement is applicable unless there is an exit or diplomatic clause in the contract, which should specify the conditions for early termination and the amount to be paid as a penalty. This amount may vary between 1 and 2 months rental fees, but in some contracts it may be equal to half the amount due for the remaining months of the original lease. For example, if 10 months remain before the expiry date, five months’ rental amount would apply. The Civil Code lays out circumstances in which tenants may leave or withhold rent, for example if landlords fail to meet the obligations outlined in the contract.

Note: subletting a property for short or long term occupancy is only permitted with the written owner’s permission. With the increase in short term rental platforms the owners are especially strict about this in order to discourage unauthorized temporary rental of their properties by their tenants.

The process of buying, selling or renting any type of property or land is regulated at a state level in Mexico. While some procedures in the property purchase process may be identical in all states, others may differ. This page gives an overview of what is involved in buying a property in Mexico, prepared by certified real estate agents who are experts in the Mexico City property market. It contains advice that should not be considered a legal document nor should it imply any liability for its authors in case there are some discrepancies with the processes involved for the sale or rental of a property. It should also be noted that for particular practices and requirements in areas other than Mexico City, advice should be sought from professionals familiar with the property market in that state.

Information provided by Carmella Peters-Romero, Vanessa Kerr and Hector Romero of Peters & Romero Bienes Raíces, Tel: 55 3713 0985 / 55 6708 4772 / 55 4341 3131