We have written on this subject twice in the past 14 months, but it continues to be a growing problem. In the past two months we have seen an increase in problems associated with contracts. We have been involved recently with four cases of people being robbed of their deposits. Three of these are deposits for purchasing a house, the other for a rental. These three cases total $38,500 USD. All four people in question deserve to have their money returned, but probably will lose it all or receive only 50% through arbitration because they did not get an original of the contract they signed. Please, always make sure you get an original of anything you put your signature on. Buyer, beware!
This is our advice.
Unfortunately, we see contractual disagreements every week. They include property sales/purchases, leases, labor, and contractor agreements. These contracts come in English, and/or Spanish, and sometimes are written in such a way as to be illegal according to federal or state law. The phrase that applies to these matters is due diligence. It is always better to spend a little now to protect yourself from something big in the future.
When contracts in Mexico are signed, the excuse “well I didn’t know it said that” will not assist you in court, whether you sue or the other party takes you to court. Also note; if you sign a contract that has broken federal or state laws, you are in turn agreeing to break these same laws, whether or not you knew they were illegal.
Whenever you hire a contractor to make renovations or repairs on a home, or even build you a new home, make sure you get what is agreed upon in writing. By having these details in writing, you will be protecting yourself down the road should things go wrong. You may be asked up front for a percentage of the job, sometimes as much as 50%, but never agree to pay fully until the job is totally completed.
To make some matters worse, we occasionally see contracts that are not signed by all parties, and sometimes our clients only have copies. Please make sure your contract is an original, and that it is signed. Often enough, it is much easier to sign an original and then make a copy of that original. Unless a notary puts his seal to the photocopy, it will not stand up in court if necessary. If the contract is copied before the signatures go on, this is okay, as long as the signatures are original.
In addition to contract problems, some of us do not know our rights in Mexico. When you are purchasing property, the real estate agent involved will always have a notary with whom they usually deal. The realtor can, and often does recommend one to you. Some of our clients have even been told that they have to use the real estate company’s notary. This is false. You have the right to choose the notary of your choice.
To some of you, this may be simple common sense, but not knowing the way certain things are done in a foreign country can be intimidating. Make it a point to find out. When you are unsure of something, or if something just doesn’t feel right, it is your responsibility to find out about it. There are many different sources that will help you, such as your attorney. The Lake Chapala Society and community organizations in other cities and towns have a great wealth of information. Remember, if you ask 12 different people on the street, you will probably get at least 14 different answers. Consult an expert.
- As a buyer of real estate, always have someone advise you or look out for your best interest.
- Always make sure you get an original of the contract, especially the signatures.
- Always have a proper lien check done on the property you are purchasing.
- Always get any agreements or modifications to contracts in writing, hand shakes do not work in court.
- Seek advice from a professional.
- Never take a photocopy of signatures on any contract.
- Never assume anything. Things are different in any foreign land, so make sure you get the facts on everything.
- Never agree to anything with a hand shake.
- Never pay heed to rumors, as that is all they ever are.