Sublease Agreements

January 23, 2007
Sublease Agreements

Precautions for sublessees. In recent years it has been common practice in the Mexican real estate industry for a lessor to grantuse of real property through a sublease, which allows for various tax and legal strategies of developers. In this respect, one mustkeep in mind that a sublease agreement is a contract that is subordinated to the lease agreement on which the sublease is based.The general nature of the state civil codes in force throughout the Mexican Republic establishes that a lessee may not subleaseproperty or assign its rights without the consent of the lessor/owner. With this in mind, if the lessor/owner expressly approves thesublease agreement, unless agreed otherwise, the sublessee assumes all the rights and obligations of the lessee/sublessor, whichmay not be known by the sublessee, much less desired by the sublessee. Based on the foregoing, sublessees must obtain a releasefrom the lessor/owner from any assumption by the sublessee of the rights and obligations of the lessee/sublessor, as well asrecognition on the part of the lessor/owner that the sublease agreement will continue in force in case the original lease agreementis terminated for any reason.

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