In Mexico, the process for recovering the property may be either judicial or non-judicial, depending on the type of agreement entered into by the parties.

Non-judicial procedures usually arise from a pledge agreement without transfer of possession (ie, a floating lien pledge), such proceedings will be contingent upon the willingness of the property’s possessor. Judicial procedures usually arise from the enforcement of a mortgage guarantee.

In Mexico, both judicial and non-judicial procedures are provided for foreclosing a pledge.

• Non-Judicial Process: The lender must submit a notice of default, if the debtor fails to remedy the event of default. The debtor will have a period of three business days to surrender the property, which must take place in the presence of a notary public. The lender shall have the right to appoint an appraiser to determine the property’s value.
• Judicial Process: Should extrajudicial enforcement not be successfully carried out, the lender must file a lawsuit in court, stating the owed amounts. Once the lawsuit is admitted, the debtor will be required to make the payment. If the payment is made, the property will be released. If the debtor does not make the payment, it must respond to the lawsuit and present evidence. Subsequently, a hearing will be held to evaluate the submitted evidence, after which the judge will issue the final judgment. If the value of the property is lower than the amount owed, the creditor may take possession of the property and pursue a deficiency judgment for attaching other assets of the debtor (ie, direct award). If the value exceeds the debt, the property must be sold in a judicial sale (ie, auction) and the balance, if any, is tendered to the debtor.

In accordance with the Commercial Code, the notice is an essential requirement in the non-judicial procedure. Likewise, the notice must be served through a notary public according to the Commercial Code.

The borrower has the right to receive payment of the total amount due, plus the agreed interest. In the event that a specific interest rate has not been agreed upon, a rate of 6% per year on the outstanding debt may be claimed, in accordance with the Commercial Code.

The lender may pursue both actions simultaneously; however, they must be brought in separate judicial proceedings: an oral commercial personal cause of action against the property owner and an in rem cause of action to foreclose the mortgage (special mortgage procedure).

In this context, the right of redemption will not be impeded since they will be separate legal procedures.

If the lawsuits are related to the same subject matter, they would not be admissible. However, if they pursue different objectives, they should be deemed admissible, as judicial authorities are required to supervise proceedings and avoid double payment.

Judicial proceedings typically take approximately six to eight months, excluding any legal remedies, appeals or amparo proceedings.

Non-judicial procedures would take approximately three months.

Prior to the auction procedure, the amounts owed to the lender must be quantified. If the value of the property exceeds the amount owed, the remaining balance shall be tendered to the owner. In the event of any deficiency, the lender has the option to file an appeal and subsequently seek relief through a constitutional challenge on the basis of a violation of human rights (e.g., due process, right to property), known as the “amparo” procedure.

The special purpose vehicle (SPV) for the joint venture is normally either a trust (fideicomiso) or a business organisation. Most of the time, the former requires the participation of a duly licensed financial institution (almost always a bank) to act as trustee, while the latter involves the incorporation of an entity, ordinarily the equivalents of a stock corporation or a limited liability company – ie, a sociedad anónima or sociedad de responsabilidad limitada, respectively.

Joint venture agreements ordinarily foresee the investment terms together with the creation of the SPV, its management, contributions and distributions (gains and losses), albeit some of these provisions can also be set forth under the relevant charter of the SPV itself.

In Mexican real estate joint ventures, partners’ rights and obligations are primarily contractual and governed by the shareholders’/partners’ agreement and the company’s by-laws, supplemented by applicable corporate law. Mexican commercial law recognises broad freedom of contract, allowing joint venture partners to define capital contribution obligations, governance rules, approval thresholds, and ancillary covenants such as confidentiality or non-compete clauses (if agreed).

If a partner breaches these obligations, available remedies typically include damages, court-ordered performance or injunctive-type relief (implemented in Mexico through precautionary or interim judicial measures and orders to do or refrain from doing certain acts), and contractual exit or dilution mechanisms (such as buy-sell or option structures), provided they are properly agreed. Corporate law remedies may also apply, including challenging shareholders’ resolutions, removal of managers or directors, and claims for directors’ or managers’ liability. Interim measures may be sought to prevent asset dissipation or unauthorised transactions while the dispute is pending.

Real estate owners have a duty to pay for real estate property taxes (impuesto predial) as well as for real estate acquisition taxes when the realty is acquired. Income tax and other taxes (like VAT) may stem from the operations at the facility. Depending on the type of facility (commercial or otherwise), certain duties associated with licences and permits may apply, which are determined at the state and municipal levels.

A property delinquent on its taxes or duties may be subject to administrative and tax procedures that may result in an attachment over the property, thereby preventing its transfer or its use as collateral and eventual securitisation.

In the absence of arbitration and mediation (which are the most common dispute resolution mechanisms in JVs (see 6 Arbitration)) provisions agreed upon by the parties, the parties must turn to the federal commercial courts. The courts will aim to resolve the dispute in a manner that most closely aligns with the organisation’s corporate purposes, as originally intended by the parties, while adhering to legal principles.

Even in the case of default judgments due to the absence of a defendant, edicts and attempts to serve process must be established. Foreclosures of promissory notes entail summary execution processes that are ancillary to (or isolated from) overall JV transactions. Some guaranty trusts foresee automatic execution processes allowing the trustee to dispose of assets once default notices and cure periods have been exhausted, although these operate as previously agreed termination scenarios by the parties and not as summary judgments per se.

For emergency cases, a party may seek provisional remedies for preventing the destruction or abscondment of assets (please see 7 Provisional Remedies).

Depending on the SPV (trust or company), the winding down must account for creditors, including tax authorities and workers’ rights, which may not allow for the winding down until cleared.

In Mexico, guarantees in real estate transactions vary based on deal structure, risk level and secured obligations. The most common include:

• Non-Recourse Carve-Out (“Bad Boy”) Guarantees: These are not explicitly recognised in Mexico, but lenders often impose personal liability clauses for misconduct (eg, fraud or fund misappropriation).
• Security Trust Guarantee (Fideicomiso en Garantía): Property is placed into a trust and managed by a duly licensed financial institution. Upon default, the trustee can enforce the guarantee without court intervention. Such guarantees are common in cross-border financing.
• Joint Obligations: Multiple parties share full liability, acting as an indirect surety.
• Parent or Corporate Guarantees: These are used in real estate financing, where a parent company or affiliate guarantees a subsidiary’s obligations.
• Escrow Agreements: Funds are held in escrow to ensure availability to complete real estate projects.
• Mortgage: The property serves as collateral. If the borrower defaults, the creditor may commence foreclosure under federal and local laws.
• Bond: A third party (issuer) assumes liability for a debtor’s obligations. They are common in lease and construction agreements for different purposes (ie, payment, quality of materials, quality of works, timely delivery, etc).
• Lease Guarantees: Security deposits or guarantors (sureties) cover unpaid rent or damages in residential or commercial leases.
• Completion Guarantees: They are not explicitly regulated, but structured through existing legal mechanisms, such as performance bonds, trust guarantees, corporate guarantees or escrow agreements. They are commonly used in real estate development to ensure timely project completion.
• Title Insurance: See 1.5.1 Types of Guarantees in Tenancies.

Non-recourse carve-out (“bad boy”) guarantees are not explicitly regulated under Mexican law. However, lenders often include contractual provisions imposing personal liability on borrowers for specific prohibited actions (eg, fund misappropriation, misconduct, or fraud).

To enforce or dispute completion guarantees or a similar legal mechanism, clear and precise agreements and compliance with local laws are essential. Important factors include:

• Type of Guarantee Used: The guarantee may be structured as a corporate guarantee, performance bond or guaranty trust.
• Clear and Precise Terms: Obligations, enforcement triggers and deadlines must be clearly specified.
• Judicial v Non-Judicial Enforcement: Some guarantees, such as mortgages or pledges, can be enforced without court intervention, while others require a lawsuit. The enforcement of such guarantees may be either judicial or non-judicial, depending on the agreement reached by the parties at the time of executing the corresponding contract. In the absence of an agreement on non-judicial enforcement, such enforcement must be realised with court intervention.
• Legal Standing of Beneficiary: Only legitimate creditors or beneficiaries may enforce the guarantee.

Unconditional guarantees are enforceable if they comply with contractual, regulatory and public policy requirements. Key considerations:

• Legal Validity: Guarantees must be explicitly stated, clear and voluntarily agreed upon by the guarantor.
• Public Policy: Guarantees obtained through fraud, misrepresentation or duress are unenforceable.
• Bankruptcy Limitations: If the principal obligor enters insolvency, enforcement may be restricted or subordinated under federal laws.
• Judicial Review: Courts may limit or adjust liability if enforcement violates good faith, public order or reasonable commercial practices.
• Waivers of Defences: While certain defences may be waived, statutory rights (eg, fraud, lack of consent, or insolvency protections) cannot be overridden.

In Mexico, the waivers of defences in guarantees are enforceable. However, in the case of agreements between merchants, it is not possible to claim ignorance or lack of awareness of the terms as such parties are presumed to possess a higher degree of knowledge (ie, professional) in such transactions.

In Mexico, the following special legal proceedings exist:

• special mortgage foreclosure procedure;
• pledge foreclosure procedure;
• bankruptcy and insolvency procedures (ie, commercial priority contest); and
• foreclosure of floating lien pledge and guarantee trust.

In Mexico, there are procedures for claiming the enforcement of guarantees, which may be ordinary or special. However, the lender must choose only one of these procedures.

Arbitration in Mexico has grown over time, but it is debatable whether its growth is comparable to that of other jurisdictions. There are various institutions in Mexico that are dedicated to arbitration and also promote this dispute resolution method as an alternative to litigation. As a result, arbitration has been progressively used in major transactions conducted in Mexico, particularly when foreign parties are involved in such transactions.

It is important to note that Mexico has a legal framework regulating domestic arbitration under the Commercial Code. However, in disputes involving high-value transactions and international elements, such as the nationality or location of the parties, it is advisable to choose international arbitration.

For this reason, in real estate transactions where both national and foreign parties are involved, it is common practice to submit disputes to international arbitration. To ensure this, the contract (regardless of its nature) must explicitly state that in the event of a dispute arising from it, the parties agree to submit it to international arbitration. The arbitration clause should specify:

• the arbitration institution (national or international) chosen for the dispute resolution;
• the procedural rules applicable to the arbitration (usually the chosen institution’s rules);
• the governing law for the proceedings (any framework from any jurisdiction);
• the number of arbitrators who will resolve the dispute; and
• the place of the seat of the arbitration proceedings.

The proper implementation of an arbitration clause in a real estate contract creates a legally binding obligation for all parties to resolve disputes through either domestic or international arbitration.

Finally, under the New York Convention (to which Mexico is a signatory) and Mexican law, it is possible to enforce arbitral awards in Mexico even if they were issued in a different jurisdiction.

Like any dispute resolution method, arbitration has both advantages and disadvantages.

Among its advantages, the most notable is the parties’ autonomy in choosing to submit any conflict to arbitration and in selecting all the elements that will govern the proceedings. Another significant advantage of arbitration is the duration of the whole process, since in most cases, arbitration proceedings are resolved faster than litigation proceedings.

However, arbitration also has its disadvantages. One of the main disadvantages is the cost associated with arbitration before an arbitral institution. Unlike litigation, arbitration involves fees, which can be high, as the parties must pay both the arbitral institution and the arbitrators undertaking the dispute.

Consequently, it is crucial to take into consideration all these factors before taking a decision on the appropriate dispute resolution mechanism.

Following the 2024–2025 judicial reform implemented in Mexico, the application of alternative dispute resolution mechanisms has become increasingly prevalent, seeking to address disputes outside the judicial system.

Mediation is another dispute resolution mechanism that can be used in real estate conflicts. Unlike arbitration, mediation does not involve submitting the dispute to the mediator’s judgement or decision. Instead, the mediator acts as a facilitator, guiding the parties towards a peaceful resolution while seeking to preserve their business or commercial relationship.

Most arbitral institutions also offer mediation services. It is important to note that in real estate contracts (regardless of their nature), the arbitration clause can include mediation as the first step in dispute resolution. A common approach is to use a “two-tier clause”, where the parties first attempt mediation, and if the dispute remains unresolved, they proceed to arbitration.

Contracts commonly provide for tiered dispute resolution mechanisms, beginning with the least complex and escalating to more formal procedures (negotiation, mediation and arbitration).

Finally, Mexico actively promotes mediation as an alternative dispute resolution method through the Alternative Justice Centre. However, like arbitration, when a real estate transaction involves international parties, it is common practice to seek the services of international mediation institutions for resolution.

In real estate disputes, the most common provisional remedy is property retention. The effect of this remedy is the registration in the Public Registry of Property to secure the property and prevent any modifications, such as sale, or other encumbrances.

In addition to the above, there is the possibility to register a lien on the property, which would grant priority in the event of a judicial sale to secure payment of the outstanding debt.

To obtain the provisional remedy, a court order is required, and the following requirements must be met:

• The remedy is granted when there is a reasonable fear that the property in question may be concealed, squandered, or transferred.
• A clear, quantifiable, and legally enforceable debt must exist.
• The value of the claimed obligations must be established.
• A guarantee must be provided to cover any potential damages or losses that may result from the implementation of the provisional remedy.

Requirements are established in the National Code of Civil and Family Procedures and the Code of Commerce.

In the event that provisional remedies are improperly used, the court may order the payment of damages and losses, which shall be assessed based on the harm caused, thereby benefiting the party against whom the provisional remedies were granted.

In Mexico, it is common for courts to grant provisional remedies related to real estate transactions. However, all requirements established in the applicable legal framework must be met.

In a real estate dispute, the following may be considered irreparable harm:

For residential properties:

• violation of the human right to housing;
• loss of property rights; and
• loss of possession.

For commercial properties:

• disruptions to business operations;
• loss of reputation; and
• loss of profits.

The foregoing is considered irreparable as it cannot be easily compensated; therefore, the court must decide on the remedy for the damage caused by the dispute.

In Mexico, all liens must be issued by a judicial or administrative authority to be registered in the state’s Public Registry of Property and take legal effect.

Bulk purchases and management of residential units by private equity firms and Mexican REITs (Fideicomisos de Inversión en Bienes Raíces or FIBRAs) are regulated by securities, competition, real estate and leasing regulations, enforced by:

• the National Banking and Securities Commission for matters of security oversight;
• the Federal Economic Competition Commission for antitrust enforcement;
• the local civil courts and state housing institutes for tenant and lease dispute resolution;
• the Ministry of Agrarian, Territorial and Urban Development for zoning and urban planning; and
• the Financial Intelligence Unit and the Tax Administration Service for AML compliance and tax enforcement.

FIBRAs operate under a specialised framework combining securities regulation (public offerings and disclosure) with a tax pass-through regime conditioned on statutory requirements (including mandatory distributions and asset/income composition tests).

In Mexico, recent federal decrees have continued to evidence the use of expropriation mechanisms to advance public interest infrastructure projects, including the Tren Maya and other strategic development initiatives. While 2024 saw multiple expropriations of ejido land in Campeche for the Tren Maya, additional decrees have been issued thereafter. For instance, further expropriations for the Tren Maya were published in late 2025 and throughout February 2026, including multiple ejido-affecting decrees in Campeche (eg, Calakmul, Candelaria and Escárcega) and Quintana Roo. These measures confirm that land acquisition for railway infrastructure and “complementary works” remains an active tool for the implementation and expansion of strategic projects.

These actions reflect the government’s focus on large-scale infrastructure endeavours, which can influence the operations of Real Estate Investment Trusts (REITs) and Single-Family Rentals (SFRs). The possibility of expropriation for public utility necessitates that investors conduct thorough due diligence to assess potential risks associated with properties located in areas earmarked for public projects. Understanding the legal framework governing expropriations and staying informed about government plans is essential for making informed investment decisions in the Mexican real estate market.