Reforms to the Civil Code and Housing Law in Mexico City: Implications for the Real Estate and Corporate Sector

On August 28, 2024, the Government of Mexico City published in the Official Gazette reforms to the Civil Code and the Housing Law (Ley de Vivienda), with the objective of curbing the excessive increase in housing rents and promoting the public production of affordable rental housing for lower income people.

Amendments to the Civil Code

The amendment to article 2448 D of the Civil Code establishes that rent increases may not exceed the inflation rate reported by the Bank of Mexico for the preceding year. Previously, the Civil Code allowed rent increases of up to 10% per year, which in some cases significantly exceeded the inflation rate. This amendment seeks to protect tenants from disproportionate increases in rents and to provide greater legal certainty in contractual leasing relationships.

In addition, the creation of a digital registry of leases, to be immediately authorized by the Government of Mexico City, has been established. Lessors must register their contracts within 30 days of their execution. Existing contracts must be registered within 90 days from the date the reform becomes effective. The purpose of this registration is to provide greater transparency and control in the real estate leasing market.

Amendments to the Housing Law

The amendments to the Housing Law lay the groundwork for the Mexico City Government to promote the public production of affordable rental housing for people with lower incomes. This includes workers, single mothers, young people between 18 and 35 years of age and priority groups. The reform seeks to guarantee the right to housing and reduce the gap between supply and demand of affordable housing in the city.