Leasing industrial warehouses is a crucial practice for companies seeking to expand their operations without incurring the high costs associated with property ownership. An industrial lease involves granting the use of a property for purposes other than housing, in exchange for payment. This document outlines the rights and responsibilities of both the landlord and tenant during a defined period, specifically regarding business activities.
In Mexico, this sector has seen notable growth in recent years, driven by demand for logistics and manufacturing space. However, understanding the legal regulations and key elements of these contracts is critical to ensuring efficient operations and avoiding legal disputes.
How does industrial leasing work in Mexico?
Industrial leasing involves a contract between a property owner and a company that will use the space for commercial, storage, or manufacturing purposes. Leasing a warehouse involves several legal and financial considerations. To ensure a fair and transparent agreement, it’s crucial to understand the key elements of the contract:
- Lease term: The term must be clearly defined. Industrial leases are typically medium- to long-term, often ranging from 5 to 10 years with renewal options.
- Rent and payment terms: The lease must specify the monthly rent and payment terms, including rent adjustments.
- Permitted use: The allowed use of the property must be clearly stated. Specific licenses may be required depending on the activity. Unauthorized use can result in legal or contractual consequences.
- Liability for damages: It’s important to specify who is responsible for damages. Usually, the tenant is liable for incidents arising from their activity and must obtain civil liability insurance for the entire lease term.
- Maintenance and repairs: The lease should outline responsibilities—typically, the landlord handles structural repairs, while the tenant covers repairs resulting from normal usage.
- Dimensions and extra space: The warehouse’s dimensions, including usable indoor space and any external areas, must be clearly stated. This is vital for companies that require additional space for loading, unloading, storage, or vehicle movement.
- Delivery and Return Conditions: The agreement should establish the conditions under which the warehouse must be delivered and returned at the end of the lease term.
Key regulations in industrial lease agreements in Mexico
Mexico’s Urban Leasing Law governs industrial lease agreements, defining the rights and obligations of both landlords and tenants. Unlike standard commercial leases, an industrial lease may include essential business assets such as equipment, furniture, licenses, clientele, and goodwill.
Differences between commercial and industrial leasing:
- Object of the lease: A commercial lease typically covers only physical space, whereas an industrial lease encompasses operational business elements.
- Legal framework: Commercial leases follow the Urban Leasing Law (LAU) and, secondarily, the Civil Code. Industrial leases are governed solely by the Civil Code.
- Security deposits: Commercial leases usually require a deposit equivalent to several months’ rent; industrial leases typically do not.
In an industrial lease, the landlord delivers the business in operational condition, handles essential repairs, and guarantees peaceful use. The tenant pays rent, adheres to the agreed use, and assumes the cost of formalizing the agreement.
Legal regulation:
- No specific law—governed by Articles 1546 and onward of the Civil Code.
- The Urban Leasing Law does not apply.
Lease term and renewal:
- Ends on the agreed date without prior notice.
- If the tenant continues operating for 15 days without the landlord’s objection, the lease is automatically renewed:
- Annually, if rent is paid yearly.
- Monthly, if paid monthly.
- Daily, if paid daily.
Causes for termination:
- Non-payment of rent
- Lease expiration
- Breach of contract terms
- Improper use of the business
Post-contract consequences:
- The business must be returned in the condition it was delivered.
- Tax and labor obligations are transferred.
- If the landlord resumes operations, they may assume outstanding debts incurred during the lease.
Access control and security in leased industrial warehouses
Access control and security are critical to safe industrial operations. When leasing a warehouse, consider the following:
- Surveillance systems: Ensure 24/7 video monitoring.
- Access control: Utilize restricted systems, such as ID cards, biometrics, or security codes.
- Emergency protocols: Establish fire, earthquake, and emergency response plans.
- Liability insurance: Protect your investment with coverage for property damage and third-party liability.
Leasing an industrial warehouse is a strategic move to drive business growth. However, understanding the legal and operational aspects is essential to reduce risks and maximize benefits.
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