# Unusual rental laws



## Guest (Oct 6, 2011)

Are there any unusual rental laws in Mexico that do not exist in the States? My husband and I are considering renting an old run down house, with the intent of fixing it up at our own expense and living there for many years. We do not have the $$ to buy so our only option is renting and aren't really thrilled with what we've found in the rental market here in Taxco. We have the man power (two teenagers!) and the know how to fix up an old house as we have already done this in the States. (My husband is an electrician and has done extensive construction and plumbing work) We are in the beginning process of talking with the owner. I have tried to do research on-line about renting in Mexico but get swamped with vacation rental postings. I haven't been able to find anything specific to a Mexican rental/tenant law or proceedures. Can we expect a rental situation to be similar to the States? We are renting now and everything is very similar to what we would expect in the States. However, in a "fixer upper" we're not quite sure what to expect. Any advice on rental law or expectations that an American can have in Mexico as a renter?


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## DennyDaddy (May 3, 2011)

*Contract*

Don't know that much, but what I do know that the contract has to be in Spanish, and in your case you and owner can agree on terms, then do it with a Spanish lawyer, to make it legal.
I think there is a time limit, like one year, five years, or what ever. But I am only guessing but there is some reason why the mex gov don't want life time leeses appearing to replace a bank trust. But a lawyer should be involved. Cause I was told, ?????? that a contract has to be in Spanish or you have no recourse, and its not legal. And since you want to put money into the house, and not want to get kicked out after you do the expence and work.
All else its what you both agree on I guess, & remember 
that there is always somebody in what ever country will screw ya.

DD


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## RVGRINGO (May 16, 2007)

Unless you protect yourself very specifically in the lease, you can expect the rent to increase as soon as you make improvements. The logic here is that it is suddenly worth more. 
I would suggest a five year lease (the maximum) at a fixed rental for that period and, if possible, the option to renew for another five years at a slightly higher rent, fixed for the next five years.
You will need a notario to do this, in preference to a lawyer. Unless you exempt certain items, like appliances, lighting fixtures, etc., all improvements will become the property of the owner, as I'm sure you know.


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## Guest (Oct 7, 2011)

I appreciate the input. I'm trying to figure out the nuances of Mexican big city compared to Mexican small town life. We are renting a nice house right now but have no lease. When we were looking for a rental the lease option was never even mentioned. Taxco is a decent sized city but once you get passed the hustle and bustle of the silver shops it's pretty small town life here. We live in an outlying neighborhood (the old abandoned house is one property down) on a terribly rutted dirt road with pigs, chickens and ducks wondering around. The house is basically abandoned but the owner lives in town. It isn't "for rent" but when we talk with her we are going to see if she is willing to rent it to us. so it isn't a "business"rental house as such but simply and old abandoned property that she owns. I think she would want to sell it to us but as i mentioned we simply cannot carry a mortgage. Anyway, I'm trying to process the information and try to figure out if the lease and lawyer approach makes sense in our non-expat small barrio. Again, I really appreciate the advice. Keep it coming....I would love to hear from others who maybe live in a smaller non-expat area, to see if the legalities are necissary throughout Mexico. Thanks for your input everyone!


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## RVGRINGO (May 16, 2007)

You might be in a position to get free, or almost free rent, in exchange for specified improvements and furnishings that you will undertake for a five year period.


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## Guest (Oct 7, 2011)

That's what we were hoping for! There is a lot that needs to be done!


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## Guest (Oct 7, 2011)

A quick comment/question about a five year lease. we are somewhat nervous about that aspect simply because the house, "as is" is NOT inhabitable, not even in Mexican standards. If we signed a lease and found that the project was too large or had unforseen problems, we would be legally and financially bound to a house that we couldn't live in....so we're still tossing around the lease/no lease decision. I've read though that the law seems to be stacked in the tenants favor in Mexico. In any case, our friends and neighbors are friends with the owner...we might just opt to do it the old fashioned way with trust and friendship. I think our first concern, more than the home owner raising the rent, is that the house would then be sell able once we fixed it up. We'd hate to invest, time money, and our heart in a property only to loose it. Although, we put time, money and our heart into our home in Colorado and are right now going through foreclosure so there's never total security in any decision. There is risk in every decision though and sometimes the hoped for outcome is worth the risk. 
Any other advice????


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## tepetapan (Sep 30, 2010)

My understanding is that owners can legally increase the rent up to 5% a year. It would be something to check, weather it is a state law or Federal law. Having a written agreement on a set price would give you protection from huge rent increases as time goes on. A verbal agreement will leave you open to much higher rent increases and it would be their word against yours.... not a good thing.


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## RVGRINGO (May 16, 2007)

Before you make any decisions, you must know exactly what you will have to do, have to spend and the time frame; double the last one! Then, a lease will protect you and set the terms.


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## Guest (Oct 7, 2011)

I like that, "double the time!" been there done that! Thanks for the input!


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## conklinwh (Dec 19, 2009)

We live in a very small, historical town of about 4000 people with a lot of ruins. I think documentation a real key before you get into any deal. Trick, based, on your input is how to protect yourself without committing you beyond where you are comfortable. As usual, I think RV ****** on the right track. 
Would think that you will need have multiple discussions with the owner to have a feel for their objectives. Then expect that you will need to spend a lot of time looking at the property and what needs be done. Mexican construction bears little resemblance to the US. I might even spend a little to have an architect or building engineer go through the property with you as you will definitely find things you don't expect. Not sure if in a designated historical area but if so, INA requirements need be part of the discussion. BTW, historical area designations often include very unlikely neighborhoods.
Only after I've done this research would I even think about initiating an agreement. BTW, research should also include what ownership documentation exists. Without a registered escritura in name of person that you are talking to makes the whole discussion useless. Even then, significant improvement could well uncover conflicting claims.


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## gypsymoth (Oct 10, 2011)

"Always do business in such a way that if you and the other party to the agreement are smashed by a truck in the next hour, your heirs can take care of business"
In other words, get a good solid lease through a Notario (the Mexican version of lawyer) in which you spell out the important parts.


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## RVGRINGO (May 16, 2007)

Abogado = Lawyer; for criminal stuff, etc. Cannot do real estate documents, etc.
Notario = Specialized, state approved for real estate, wills, & other formal documents.


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## gypsymoth (Oct 10, 2011)

Thanks for the clarification, but it looks like our OP definitely needs a Notario, a good lease and some caution before trusting the landlord to "do the right thing".


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## johnleeward (Oct 17, 2011)

*Leasing property in Mexico*

Hi Raquel,

I am a licensed Mexican attorney. You can sign a long term lease in most states up to 20 years. I would suggest a shorter term with an option to renew up to the 20 years. Any lease over 5 or 6 years (depending on the State) must be filed in the local Registro Publico de la Propiedad. 

Another option is to negotiate a buy option or a rent to buy option and place that in the lease. If your financial situation changes in the future, you may be able to buy the place. Rent increases should definitely be stipulated in the lease. I have used two methods to specify increases in the future. One is to quote the lease in UDI's (a fictitious currency whose value against the peso is adjusted for inflation by the Bank of Mexico) or by pegging the increases to the inflation rate as published by the Bank of Mexico. 

Bottom line is that there is sufficient "rule of law" in Mexico that you can negotiate a lease that will protect your interests and will be enforceable. 

Regards,

John Lee Ward
Córdoba, Veracruz


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## surfrider (Oct 4, 2011)

There is a web page called mexicolaw.com/lawinfo24.htm#realestate that gives consumer protection in Mexico in real estate matters.


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## RVGRINGO (May 16, 2007)

That is a California law firm trolling for business, probably through a Mexican associate.
It does list the laws, but PROFECO is usually the most effective approach; the federal consumer protection agency. They get results and are free.


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