Leases in PV – Part I: Essential Clauses to Protect Landlords and Tenants

In a real estate market as active and changing as Puerto Vallarta’s, lease agreements are necessary and indispensable tools to protect both owners and tenants. The accelerated growth of residential and vacation rentals, along with the constant arrival of foreigners looking to rent homes on a seasonal basis have generated new dynamics and legal challenges that are important to understand in depth.

With this panorama in mind, the Vallarta Real Estate Guide editorial team presents the first part of a special article aimed at offering clarity on some of the most important clauses to consider when drafting or signing a lease agreement. For this, we approached attorney Cristo Camacho, a specialist in real estate law with the law firm Gómez Pérez & Asociados, which has more than 30 years of experience in the region.

Knowing the essential clauses of lease contracts is key to guaranteeing legal certainty.

LEASE VS. RENT: IS THERE A DIFFERENCE?

One of the first points that Camacho clarifies is the indistinct use of the terms “rent” and “lease.” Although “rent” is the most common term in everyday speech, “lease” is the correct legal word. “In legal terms, ‘lease’ encompasses the formal contract by which one person (the lessor) grants another (the lessee) the temporary use or enjoyment of a good (movable or immovable) in exchange for a certain price. On the other hand, the ‘rent’ is the certain price that the lessee is obliged to pay to the lessor as consideration for the use and/or enjoyment of the property subject to the lease,” explains the lawyer.

MOST FREQUENT TYPES OF LEASES IN PUERTO VALLARTA

The tourism dynamic of our region has created different types of rentals:

• Short term: stays of less than six months, typically for visitors.
• Medium term: from six months to a year, common among foreigners who spend winter seasons, like snowbirds.
• Long-term: more than one year, common among permanent residents or foreign workers.

“In Puerto Vallarta, medium-term leases are very common, especially among foreigners looking to spend the winter season here,” Camacho says. This diversity of rental demand requires contracts that are appropriate for each case.

Cristo Camacho, attorney specialized in real estate law with the law firm Gómez Pérez & Asociados.

ESSENTIAL CLAUSES TO PROTECT OWNERS

Every lease agreement must include clear and specific clauses that protect the lessor’s investment. According to Camacho, these are some of the most important:

• Security deposit: establish the amount, conditions of use and return.
• Conditions of use of the property: clearly define conditions regarding subletting, making modifications, allowing commercial use, etc.
• Contract term: start and end dates.
• Penalties for non-compliance: they must be detailed as to which cases they would apply, how they should be executed, and what consequences they could entail.
• Physical condition of the property: include an inventory and photographs to avoid later disputes.

“It is crucial to be specific in the penalty clauses: when they are applied, under what conditions and how they are enforced,” the lawyer stresses.

ESSENTIAL CLAUSES TO PROTECT TENANTS

A good contract must also look after the rights of the tenant. Among the clauses that should be included are:

• Peaceful use of the property: ensuring that the tenant can inhabit the space without undue interruptions.
• Maintenance of the property: define the responsibilities of the landlord in major repairs.
• Conditions of the property: that it is habitable at the time of delivery.
• Protection against arbitrary evictions: specify the valid causes for the early termination of the contract.
• Stipulation of services included: clarify who will be responsible for payment for things including water, internet or maintenance.

MAINTENANCE AND CONDITION OF THE PROPERTY: A COMMON SOURCE OF CONFLICTS

“A well-structured clause on this topic can avoid disputes about how the property should be delivered at the end of the contract,” says Camacho. A detailed inventory, accompanied by photographs and the signature of both parties, can be a simple but very effective tool to avoid misunderstandings.

This has been the first part of a special article designed to provide informative tools for those involved in the rental market in Puerto Vallarta. Throughout this content, we have covered the main clauses that should be included in every contract to protect the interests of both parties, as well as the different rental modalities available in the region.

In the second and final part of this article, which will be published in the August 2025 edition, we will once again feature the guidance of attorney Cristo Camacho to address other key topics related to lease agreements. These include: Which is better: a private or notarized contract? Current legal and tax specifications in both Jalisco and Puerto Vallarta, conflict resolution mechanisms like mediation and arbitration, common mistakes when drafting contracts, general recommendations for landlords and tenants, and specific considerations for real estate investors, among other relevant aspects.