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Renting Property

Mexico - Renting Property


The process of renting out property in Mexico is regulated by each state. Many of the residents in this country, especially expats, prefer to rent their homes because mortgage down-payments are on the higher side.

In general, finding a house, condominium, or apartment on lease is quite easy for locals as well as foreigners. Fortunately, there are no restrictions on rental of property by expats, as long as they have the required paperwork.

If the tenant is of a different nationality, landlords may insist on a local guarantor, which could become a challenge without the support of a full-time employer. Prospective tenants should therefore check for this aspect and set expectations before making an offer to rent out any property.

Costs & inclusions

The real estate market in Mexico City is a lot more active compared to most of the other cities and towns, though the rental costs are relatively high. There is generally a great variation in lease amounts, even within the same city. At times, landlords bring down the rent in exchange for certain concessions such as a long-term contract.

Rents quoted usually include maintenance charges and parking space (if available). At times, the cost of water is included in the maintenance amount but this isn’t always the case. Utilities are almost never included in the rent. Properties that have amenities such as a pool, gym, clubhouse, terrace, or garden are likely to be a lot more expensive.

Unfurnished houses in Mexico usually don’t even include kitchen cabinets or a stove. Semi furnished houses have nothing more than a stove, cabinets and shelves. People renting out these houses need to bring their own furniture, mirrors, window dressings and kitchen appliances.

Properties listed as “furnished” could mean different things. Some of them come with basic furniture like sofas, tables, beds, and cupboards. Others include carpets, curtains, telephone lines, air-conditioners, and TV sets.

Tenants should also be prepared to shell out additional amounts pertaining to minor repairs. While the property owner is usually responsible for all expenses related to structural repairs, it is best to seek clarification at the time of preparing the contract.

All landlords usually ask for a deposit amount (generally 1 or 2 months’ rent) for leasing out the house. This amount acts as a guarantee for future rent payments and damage to the property. A thorough inventory of the place by the tenant is therefore recommended before signing the contract. The deposit is returned (in full) within 30 days of vacating the premises. Owners usually conduct an inspection of the property to make sure that everything is in order before returning the entire amount. In case there is any damage to the property or outstanding utility bill by the tenant, the landlord has the right to deduct the expense from the deposit.

Rental agreements

Once the rental amounts and terms are agreed upon by the tenant and the landlord, both parties sign a written agreement. It is advisable (but not necessary) to get this agreement reviewed by a lawyer before notarization.

Normally, owners rent out their properties for a period of one year. However, they often consider short-term leases too if required.

When the rent agreement expires it may be renewed if both the parties wish to do so. In such cases, a new contract is drafted and signed by the tenant and landlord. The terms and conditions may change or remain the same, depending upon what is agreed upon by both parties.

Either party may choose to terminate the rent agreement at any time. The termination notice period is generally specified in the contract. If it isn’t, a 30-day notice period should be given to the other entity.

Unless there is an exit clause in the contract, both parties are liable to pay a penalty for breaking the agreement. The fine is usually equal to 50% of the amount due for the remainder of the months.

Landlords are allowed to sell properties that have been leased. In such cases, the tenant continues to pay rent to the new owner. However, the new owner too has the right to terminate the contract giving a 30-day notice.

Tenants can only sublease the premises after getting written permission from the landlord.

Payment terms and methods

The most common way of making rent payments in Mexico is cheque or bank transfer. Cash payments are discouraged by the Federal Law for the prevention of money laundering. However, in case of a short-term rental contract, some of the landlords will accept cash payments in advance, i.e., before the rental period commences.


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Expat Health Insurance Partners


Aetna

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