Proposal for amendments in the matter of housing lease agreements
As per the requests of associations and individuals promoters of the right to housing, on July 8, 2020, two deputies of the MORENA Parliamentary Group presented to the Mexico City Congress the “Initiative with the Draft Decree Amending and Adding Various Provisions of the Civil Code for the Federal District, in the Matter of Leasing to Ensure the Right to Housing in the Context of the Pandemic” (the “Initiative”).
The Initiative, according to its Statement of Reasons, is supported by the following:
(i) The health crisis resulting from the COVID-19 virus has caused the failure of housing tenants to comply with their obligations to pay rent, as a consequence of economic and social difficulties such as loss of employment, reduction in wages, and commercial inactivity.
(ii) Non-payment of rent can lead to (a) displacement of families with roots in neighborhoods, villages and colonies, (b) evictions, and (c) several people in a homeless condition.
(iii) The civil legislation of Mexico City in the matter of real estate leases does not provide tenants with the appropriate judicial guarantees, as it contravenes the principles of affordability, bearable costs, and legal security of tenure, all components of the human right to housing.
(iv) It is necessary to balance the relationship between the parties of a lease agreement in order to guarantee the right to adequate housing, which is foreseen in Article 4 of the Federal Constitution and Article 9 of the Political Constitution of Mexico City.
The Statement of Reasons of the Initiative refers to the Guidelines on the implementation of the right to adequate housing, issued during April 2020 by the former United Nations Special Rapporteur, which mention the need to take measures to guarantee the right to housing of individuals, such as (i) the cancellation, reduction and/or deferment of rents, and (ii) the implementation of supports and soft loans for homeowners.
In addition, the Initiative highlights the figure of mediation provided in the Alternative Justice Act of the Federal District Superior Court of Justice, as an effective instrument for resolving disputes arising from housing leases.
Specifically, the Initiative proposes to modify the Civil Code for Mexico City, in accordance with the following
- Amendment to Article 2398.
- The housing lease is defined as “that which contributes to the fulfillment of the human right to housing of the lessee in exchange for a certain price in favor of the lessor“.
- The housing lease agreement must be subject to a mandatory term of three years, except as provided by the lessee.
- Addition of two paragraphs to Article 2406.
- The vacancy legal proceeding shall be inappropriate if the landlord does not submit a written lease of housing agreement, even if the proceeding is based on failure to pay rent.
- The landlord will lose the right to keep the deposit in case of anticipated termination of the housing lease agreement, or an equivalent amount in the case of the termination of the agreement.
- Addition of Articles 2406 BIS, 2425 BIS, and 2431 BIS.
- In the absence of a written agreement, the tenancy shall be presumed to exist if it is demonstrated that a party has consented the occupation of its own property by the other party in return for the payment of a certain price.
- In order to exercise any action derived from the breach of the essential clauses of the agreement, it will be sufficient to make a statement under oath in the sense that a lease relationship exists, in the understanding that the parties still may prove their claims to the court.
- The following rights are provided for tenants (a) not to request more than one month’s advance payment; (b) not to demand bail or any real estate guarantee; (c) not to be subject to “arbitrary, illegal and/or forced evictions”; (d) to notify the court order to vacate two months in advance of the date of the eviction; (e) to have staff from specialized institutions present at the eviction so that they can provide assistance to vulnerable persons such as children, women victims of violence, indigenous people, immigrants, etc; (f) access to measures to avoid leaving people homeless, such as temporary shelters and incorporation into housing programs; and (g) should fortuitous cases arise, access to mediation for the modification of the terms of the agreement.
- In cases of national emergency, natural disasters, declarations of environmental, natural or health emergencies, or any other situation of force majeure that paralyzes economic activities and prevents the lessee from complying with the agreement, the lessee may request the temporary or definitive renegotiation of the lease agreement, in accordance with the provisions of Article 1796 of the Civil Code.
The Initiative has been strongly criticized for considering that, if approved in its terms, it would violate contractual freedom, allow housing tenants to stop paying rent, and violate the rights of landlords, such as the right to property, thus discouraging investment in the real estate sector. Activists involved in the drafting of the Initiative, for their part, have stressed out the need to encourage written leases to provide legal certainty for tenants.
We hope that the discussion of the Initiative in the Mexico City Congress will be carried out through a deep, measured, and unbiased debate. Furthermore, that it contemplates the participation of litigants and judges and other sectors, in order to avoid deficiencies that could negatively impact the effective implementation of the legal provisions. Finally, we propose to be incorporated into the discussion, the feasibility of implementing supports such as those referred to by the United Nations Special Rapporteur, both for homeowners and tenants.