Lease in Case of Fortuitous

Did you know that the Civil Code for Mexico City contemplates what to do in matters of leasing in the event of a fortuitous case or force majeure?

On 1 April 2020, Dr. Claudia Sheinbaum Pardo, Head of Government of Mexico City, issued the “third agreement determining extraordinary actions in Mexico City to deal with the declaration of a health emergency due to force majeure, in accordance with the agreement of the federal government’s General Health Council, for the purpose of preventing the contagion and spread of COVID-19”, which determines the suspension of activities which the agreement itself classifies as non-essential and in the absence of compliance with the agreement, the companies will be awarded a sanction equivalent to the value of 25 to 125 times the current Mexico City Unit of Account in accordance with the Commercial Establishments Act.

However, the Civil Code for Mexico City states that “in the event of fortuitous events or force majeure in which the use of the thing is partially prevented, the tenant may REQUEST THE PARTIAL REDUCTION OF THE RENT”.

From the foregoing, we could conclude that, as a result of the Government decree that established the suspension of so-called “non-essential” activities due to “force majeure“, many premises cannot be used for sale to the public, resulting in a loss of revenue. As such, they could apply for a lease arrangement in a fortuitous case.

However, it must be borne in mind that, on the one hand, the lessor needs the income which he intended to receive, and on the other hand, the lessee is not provided with the resources necessary to cover the rent payments.

It should be emphasized that, in the face of uncertainty and doubts about the proper application of such articles, Some governments, such as the Baja California Congress, made changes to their legislation and approved the suspension of lease payments in the event of a fortuitous case in homes and establishments until June. However, it is important to note that this DOES NOT MEAN REMISSION OF INCOME, BUT EXTENSION OF THE TERMS TO COMPLY WITH THEM.

If you are in this situation or have doubts about this topic, come to us, in Bandala | Díaz | García we have lawyers who have the necessary experience to provide the legal advice you need.

LEGAL NOTICE

The main purpose of this information is to provide guidance to the general public. It does not replace the provisions of applicable law. Nor does it replace the specialized legal advice or consultancy that can be offered by any of the lawyers and/or accountants of Bandala | Díaz | García