A clear explanation for landlords and tenants in Mexico City

When renting a property, it is common to find a clause called “Asset Forfeiture” or “Extinction of Ownership”.

This term often creates fear or confusion—especially for tenants who think it leads to automatic penalties.

In reality, asset forfeiture is an exceptional legal scenario, and its presence in a lease does not create an automatic risk for either party.

Here’s a clear and practical explanation.

What is asset forfeiture?

Asset forfeiture is a legal mechanism under Mexican law that allows the State to take ownership of a property only after a final court ruling proves the property was used to commit serious crimes, such as:

• Organized crime
• Drug trafficking
• Kidnapping
• Human trafficking
• Vehicle theft