Although “subdivision” (subdivisión) and “urban development” (fraccionamiento) appear to be similar terms,from a Mexican legal standpoint, they are different. According to the General Law of Human Settlements (LeyGeneral de Asentamientos Humanos), Mexican states have the authority to legislate in the area of humansettlements and urban developments. Consequently, differences between both concepts should be reviewedaccording to the local laws on urban development. Nevertheless, the following provides some of the principaldifferences generally accepted in local laws. Subdivision implies the partition of property into two or moresections, with each of the sections having access to public roads. Each of the subdivided lots must comply withthe minimum surface area established by the urban development plans applicable to such location. Depending onlocal law, the subdivision of real property may trigger the obligation to relinquish or pay for municipal land areas,while some legal ordinances allow for the deferment of this obligation. In subdivisions, there may be a need forinfrastructure for utility services that may be fulfilled by works performed by the particular entity or individualrequesting the subdivision. As a general rule, the requirements and response times to obtain an authorization for asubdivision are shorter than those applicable to urban developments. An urban development implies a division ofproperty which requires the establishment of public access roads, in addition to the establishment of infrastructurefor utility services (water, gas, sewage, electricity, paving, etc.). In this case, developers must assign or donateland to the municipalities and utility entities in order for such municipalities and utility entities to provide theirrespective services to owners of the lots resulting from the urban development project. Various types of urbandevelopments exist, including residential, industrial, commercial or mixed purposes. Each type of urbandevelopment has different specific requirements that apply to it, according to local laws, including those relatedto the establishment of green and recreational areas which, as a general rule, must be assigned or donated to themunicipality. The procedure to authorize an urban development entails compliance with significant requirements,such as road surveys, public comment, the obligation to construct infrastructure improvements for utility services,as well as compliance with particular legal requirements in accordance with the local official urban developmentplan. When analyzing the acquisition of real property, it is important to consider these differences in the duediligence process, in addition to determining the condition and availability of utility infrastructure andcompliance with all legal requirements that apply to land use and the type of development.
