Contracts have their general regulation in the Common State Regulations, in this case the civil code of the state of Nuevo Leon.

Contracts represent a legal act in which the will of the parties is manifested.

Structure of the contract:

• Proem: Corresponds to the superior part, where the type of contract is expressed.
• Antecedents: The origin of the object of the contract is explained.
• Statements: It includes the identification of the parties involved in the conclusion of the contract.
• Clauses: These contemplate the rights and obligations to which the parties are subject.

Some of the different types of contracts related to real estate are the following:

• Purchase and sale of real estate.
• Promise of sale.
• Transfer of use and temporary enjoyment.
• Lease of real estate.
• Express commissory agreement.
• Contract for the rendering of services.
• Trust agreement.

Within the contracts for the rendering of services, the one that is considered as one of the real estate contracts with more boom in the day to day of the real estate, is the Flat-rate unit price contract; this is when the businessman directs the work and puts the materials.

In the real estate practice, it is necessary to be very careful, and it is advisable to go to a professional, since the promise to contract or promise of purchase and sale can be considered as a fraud crime, question foreseen in the Penal Code.

The Real Estate Trust.

The real estate trust is a type of trust contract whereby real estate and/or financial resources are transferred to the fiduciary to be managed and administered for the purpose of developing a new commercial, industrial, tourism or housing project. At the end, and following the instructions of the contract, the constructed real estate is transferred to the beneficiaries, or the purpose of the trust is fulfilled.

Three main parties are involved in this type of trust:

• Trustor: Individual or legal entity that contributes to the trust the real estate and/or covers the cost involved in the work (it may be one or several persons).
• Fiduciary: Financial institution that receives the capital to carry out the construction of the work and registers it in its name temporarily under certain conditions instructed by the trustor through the contract.
• Trustee: The individual or legal entity that receives the domains, or the benefits of the trust, i.e., they are the ones who receive the property built based on the characteristics requested. Sometimes, the beneficiary may be the trustor himself.

Some of the advantages of a real estate trust of this type are the following:

• Lower execution costs in construction and/or real estate projects.
• Separate assets from personnel/partners/investors.
• Provides special legal security to the agreed project.
• Generates confidence to the investors participating in the project.
• Trust rights can be negotiated between the parties.
• It is the ideal vehicle for investment in all types of real estate developments, since the trustee is in charge of fulfilling the object agreed in the contract.

It should be noted that it is not the only type of trust that exists, some other options are:

• Patrimonial trust.
• Shareholding Control Trust.
• Administration Trust.
• Guaranty Trust.
• Deposit Trust.
• Infrastructure and Real Estate Trust (REIT).
• Investment Trust.

If you have doubts about any specific real estate contractual operation, looking for ways of financing real estate projects, or the delimitation of a real estate trust, do not hesitate to contact us.

Lic. Elmer Aguirre.

Senior Associate.

eaguirre@g-r.mx