Research using the words complaints, and problems before buying in Mexico. There are over 600 court cases that have been filed in the last 14 months against developers in the northern Baja area, and the number will be in the thousands soon. Many have put down deposits for homes and condos that have never been built, or sold to multiple buyers. The scams are endless. Never believe what you see on real estate companies web sites. Coldwell Banker of Rosarito is one of a dozen recent bankrupcies filed in the San Diego area leaving hundreds of customers with six figure losses.
This is from this site:
Lic. J.E. Beaulne, LL.B. provides us another interesting article about legal terms in Mexican real estate.
I conducted a personal survey on this matter and found that 90% of the salespersons are not qualified when it comes to the legal matters during a real estate transaction in Mexico and, to cover their ignorance they just simply lie instead of saying “Sorry I do not know”.
I have found this to be true of all the websites posted by the real estate agents in order to lure foreign investors to Baja. They do not inform buyers of the need for caution. In fact, they try to make it sound like waiting to make a decision will cost. This is not true, especially now that the market has taken a drastic downturn. My agent did not even suggest I offer less on the property I was negotiating. I went back a few weeks later and offered $250,000. on a house the seller was asking $275,000.00 and they settled for $263,000. and paying $15,000.00 of the closing costs. The agent I had gone to was letting me take the asking price. What kind of help is that. Read more Baja real estate complaints to get a clearer picture of the situation.
This is now a buyers market. But remember it is always buyer beware.
This is important information. Don't listen to agents and sales people who want to make a buck off of you. Baja real estate guide for homes, land and condominiums for sale in Rosarito Beach, Los Barriles, East Cape, Cabo San Lucas, Tijuana, Ensenada, Mexicali, Tijuana, La Paz and Loreto.
Buyer Beware: Be advised that there are no laws which regulate the sale or management of real estate in Mexico and abuses do exist. It is always prudent to ask for local references and obtain competitive bids for all services when possible.
The Mexican Constitution prohibits direct ownership by foreigners of real estate within 100 kilometers (about 62 miles) of any border, and within 50 kilometers (about 31 miles) of any coastline. In order to permit foreign investment in these areas, the Mexican government has created a trust mechanism (contrato de fideicomiso) in which a bank has title to the property, but a trust beneficiary enjoys the benefits of ownership. The Bank Trust Agreement (contrato de fideicomiso) allows for renewable long term leases that may be sold or enjoyed by your heirs.
A foreigner may be the sole and exclusive stockholder of a Mexican corporation which may hold fee simple title to non-residential property in the prohibited zone. There is a broad definition for "non-residential" property.
Buyer Beware: Mexico real estate prices that seem too good to be true are usually too good to be true! Many of these "bargains" are located on what is commonly referred to as "Ejido" or communal tracts of land. It is highly recommended that you consult with a Mexico attorney regarding Ejido land rights. Any agreement between the "Ejido" and a foreigner may be revoked or canceled without cause, notice or recourse!!
Caution: Mexican law recognizes squatters' rights, and homeowners can spend thousands of dollars in legal fees and years of frustration in trying to remove squatters who occupy or rent their property. Always inspect the property and be certain that your property is not occupied by a Mexican citizen in any manner whatsoever. Anyone who occupies the property on behalf of the owner should be totally removed/gone from the property prior to closing. Warning: A Mexico citizen may simply refuse to pay rent and continue to occupy your rental property for a long, long time - maybe years.
American property owners in Mexico should exercise caution when hiring employees to serve in their homes or on vessels moored in Mexico. Several American property owners have faced lengthy lawsuits for failure to comply with Mexican labor laws regarding severance pay and social security benefits.
Caution: Exercise extreme caution when considering time-share investments and be aware of very aggressive tactics used by some time-share sales representatives. Buyers should be fully informed and take sufficient time to consider their decisions before signing time-share contracts, ideally after consulting an independent attorney. Mexican law allows time-share purchasers five days to cancel the contract for unconditional and full reimbursement. U.S. citizens should never sign a contract that includes clauses penalizing the buyer who cancels within five days.
A formal complaint against any merchant should be filed with PROFECO, Mexico's federal consumer protection agency. PROFECO has the power to mediate disputes, investigate consumer complaints, order hearings, levy fines and sanctions for not appearing at hearings, and do price-check inspections of merchants. All complaints by Americans are handled by PROFECO's English-speaking office in Mexico City at [protected]. You might also complain about the lack of an English translation for the PROFECO web site.
What I Learned the Hard Way About Mexican Real Estate. Problems at Las Olas Mar y Sol: BY MICHELLE MARINA...
I saw a show on CBS Sunday Morning about the Baja Dream. I went to a Coldwell Banker Baja office thinking since it was an American based company I could be safe. I ignored what I saw about getting legal council. I put $5,000. down to hold the property, being told that I would get the check back when I sent the down payment to them. A few months after sending the down payment I discovered Coldwell Banker cashed the check. When I called them they said the developer told them to use it for commissions. I had a receipt, but the deposit was not mentioned in the contract. Then the developer never delivered the house. They said they could not build it and they would give me a lot instead. The contract said they would deliver the house in November 2005, tentatively. The word tentatively gives them all the time in the world. A good attorney reviewing the contract would never have let them put that word in. There were many things about the contract my attorney said should not have been there, but I did not have him before I signed. Now I have him trying to get my money back. So, don't think you are smart enough to do this on your own, and don't trust the real estate agents or developers, they have a vested interest in the sale.
I want to alert others that it is very important to listen to the advise of agencies in the United States about how to buy real estate in Mexico. I did not, and now I have a lawsuit.
Here is a link to a pdf file published by the State of Arizona real estate department. It explains the differences in buying real estate in Mexico and the U.S. especially Arizona:
You will understand why it is important to use an attorney, not just a real estate agent.
I say this, because I went to Coldwell Banker in Baja, and decided not to use the attorney. I wanted to save money. I thought I could research on my own on the Internet. Short version of the story, I now have an attorney, and a lawsuit to recover my deposit and damages. Though I was told my $5,000.00 deposit would be returned when I put down my down payment, Coldwell Banker cashed the check. They said that the developer told them to use it for commissions. I had a receipt for the deposit, but nothing in the contract about it. They also did not have my down payment put in an escrow account. I thought Coldwell Banker could be trusted because it was an American company. Again, learn from my mistakes, and follow the guidelines.
This is from the United States State Dept. website, http://travel.state.gov/travel/cis_pa_tw/cis/cis_970.html#real_estate
REAL ESTATE AND TIME-SHARES: U.S. citizens should be aware of the risks inherent in purchasing real estate in Mexico, and should exercise extreme caution before entering into any form of commitment to invest in property there. Investors should hire competent Mexican legal counsel when contemplating any real estate investment. Mexican laws and practices regarding real estate differ substantially from those in the United States. Foreigners who purchase property in Mexico may find that property disputes with Mexican citizens may not be treated evenhandedly by Mexican criminal justice authorities and in the courts. Time-share companies cannot be sued in U.S. courts unless they have an office or other business presence in the U.S. Consumers should contact a Mexican attorney, the Mexican consumer protection agency PROFECO, or other consumer information agency for information on companies that operate outside of the U.S.
I was sent this link from a friend who knows I was thinking about buying in...
If you buy property that a seller is getting rid of because of structural problems, they do not have to be exposed. So if someone tells you they are only selling because they want to live closer to their grandchildren, you move in and find out that the foundation is eroding, because the ground is unstable, you have NO recourse. That is what happened in Real Del Mar in Baja. It is truly buyer beware. Have an expert inspect any property before putting money down. You will be spending good money after bad to either fix it or try to sue. But if the person has left the country, and the transaction happened in Mexico, you have to get them to go to Mexico in order for you to sue them, and they have to have assets in the area of Mexico that you can trace. You really need to think about the differences before thinking about taking the risk. If you want to live there, rent.
I have seen numerous new complaints posted against developers in Baja. The business practices of Real Del...