New Rules for Registry of Real Property Guaranties in the Public Registry of Commerce

On August 27, 2009 reforms and additions to various provisions of Mexico’s Commerce Code (Código de Comercio) were published creating a new “Real Property Guaranty Single Registry” as an additional section within the Public Registry of Commerce. The Real Property Guaranty Single Registry will allow for the registration of all types of guaranties and encumbrances affecting real property, as well as decisions from commercial law cases through which such guaranties may be created, amended, transferred or cancelled. The reform seeks to create an automated system allowing Mexican notaries public to directly and through electronic means register or amend real estate guaranties within the commercial record file (folio mercantil) of the business person or entity involved, attempting to facilitate the process of recording such guaranties. The reform clearly establishes that a priority or preference will exist for guaranties granted in conformity with the commercial record file of the registry. It is important to mention that the reform establishes a registration term of one year for real property guaranties, which may be renewed, which will require creditors and debtors to closely monitor the status of guaranties they have registered in order for such not to expire, and thus extinguish the guaranteed obligation. The reform entered into force on the date following its publication, but the Department of the Economy granted a term of one year in order to organize and launch the new Registry.