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Construction Insights November 2023: Mexico

20 November 2023
Legislation regarding the practice of real estate agents and intermediaries aims to reduce the rate of fraudulent operations amidst high-value transactions and projects.

Mexico’s states legislatures strive for federal regulation on real estate agents

In July 2023, Jalisco joined the list of Mexican states that have passed legislation regarding the practice of real estate agents and intermediaries. This legislation will provide certainty in connection to the activity of this type of professionals and aims to move towards a greater professionalization of the activity and, consequently, reduce the rate of fraudulent operations amidst high-value transactions and projects.

Among the most relevant provisions of this new legislation, the implementation of specific rules and procedures governing the performance, registration and accreditation of real estate service providers are included; this will allow to certify those professionals who have the necessary qualifications, knowledge, and proved skills to carry out the activity with a certain degree of standardization.

In addition, it is worth noting that the obligation for this type of service providers to register as such will not be mandatory for the first part of the implementation process of the legislation. Despite this, both the congress members and participants of the construction on and real estate industry involved in the discussions and passing of the law also stated that a fully functional registry and quality control system for real estate agents and professionals will only be viable when Mexico’s federal congress passes the corresponding law as to homogenize the more than 20 local pieces of legislation in the matter.

The bigger question now is how this new requirement for service providers will coexist with the federal regulations on professions. Just earlier this year, Mexico’s Supreme Court of Justice declared that Jalisco’s law requiring all professionals to apply for a state license for the execution of their profession was unconstitutional, as the power to issue such licenses was exclusively of federal jurisdiction. Therefore, it is reasonably expectable, then, that the government in Jalisco will proceed with caution to ensure the proper implementation of this new law, and it is also likely that other states will follow on urging their legislatures to emulate the process followed by the state.

Ultimately, in a country where real estate and investment opportunities, especially those derived from nearshoring, are growing tremendously, the need for specialized, high-quality professionals in the real estate sector will prove to be vital as well.

In our opinion, now it’s a matter of time that the Mexican Congress will address these issues and act in consequence for the betterment of the real estate and construction industries.

For further information contact Juan Carlos Izaza, PCGA

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