Real Estate Law: Things to Consider When the Lessor Is Not the Owner of Leased Real Property

In general, lessors own the real property they lease to their lessees. However, several exceptions provided by the local civil codes allow a person other than the owner to lease real property in Mexico based on: (i) instructions received from the owner, in which case the agreement will be considered as if executed by the owner; (ii) the owner's authorization of a certain person for such purposes, in cases in which the authorized individual will grant the lease directly without intervention by the owner; (iii) authorization to the lessee to sub-lease, either generally or by means of specific authorization from the owner; and (iv) the express authorization by law conferred upon individuals such as guardians, executors and those who have parental custody, in accordance with the limitations established by applicable local civil codes. It is important to review the legal capacity to grant a lease with respect to real property by one who is not the owner, including the temporary limitations and legal effects that this may imply. For example, numerous civil codes establish that an executor may not lease real property for a period greater than one year unless he/she has the consent of the beneficiaries. This limitation is five years with respect to guardians and those with parental custody. In the case of a sublease, it is common for local civil codes to establish exceptions under which the sub-lessee may assume the obligations of the sub-lessor with respect to the lessor, depending on the form in which the lessor authorized the execution of the sublease agreement. Even though the scope and effect of these provisions are greatly debated, they result in practical consequences of great importance. Consequently, in the event one is looking to grant or receive real property pursuant to a sublease agreement, or lease real property from someone other than the owner, it is highly advisable to review the provisions of the civil code applicable to the location of the real property in order to evaluate corresponding restrictions, requirements and implications prior to executing an agreement.

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