Are short term rentals legal in Mexico?
The law does not provide a minimum term for rentals under Mexican Law, although it provides a maximum term: For residential rentals, the term cannot exceed ten years. This means that a minimum term could be as short as 1 day, 3 days or a month; Weekly or month-to-month basis. Now, the trend and practice on short term rentals use several online platforms such as Airbnb; this practice, although it could be lucrative and practical, in many cases have been creating legal issues, and from the legal stand point, it also generates confusion, as to the nature of the agreement we are dealing with. Consequently, it may not be clear when it comes to rights and obligations between the parties, and before third parties or even the Government. This being said, let’s keep in mind that short term rentals can have this distinctive ingredient: An intermediary online platform such as airbnb. This is not a party to the rental. This is only a platform, or even considered as a virtual broker, but nothing has to do with the tenant and landlord’s rights and obligations. From the business stand point, it is practical and it may be profitable. However, there are legal ramifications that need to be taken into consideration: resort CC&R’S (HOA regulations), fiscal implications, nature of the agreement (rental or hosting), etc. There should not be a general understanding or practice when it comes to these type of short term rentals, and rather, treat the situation on case to case basis, by putting in place the proper agreements and comply with the local law and regulations.
Written by Eduardo Rosales, Attorney at Law, located in Baja Mexico with federal license to practice nationwide.
