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Posted by Ernie Gorrie from ( on domingo, julio 21, 2002 at 13:35:14 :

In Reply to: Re: Earnie is.... posted by Bob from Colo from ( on sábado, julio 20, 2002 at 15:02:37 : owning a slice of Mexico a good or risky venture?"


I think there are some serious risks in owning a slice of Mexico. The legal system is different. Culture is different, so what gringos anticipate in a business deal may not occur. The gringo may then feel cheated, while the Mexican doesn't understand why there is a problem. Or the gringo may do something because it makes good business sense, while the Mexican may feel like a fundamental personal trust has been violated.

Perhaps the biggest issue though is an attitude that some gringos have that, because they are in Mexico, there are NO rules. An American friend of mine who has been successfully owning and operating businesses in Mexico for over a decade commented to me, "The biggest problem that most Americans have in Mexico is that they leave their brains at the border."

People "buy" real estate in Mexico without having the transaction registered. They would never consider that at home. They "buy" property from a member of an ejido, but would never consider "buying" property from an individual if the property was on an Indian reservation at home. People who would never buy property at home without involving a real estate agent and a lawyer plop down thousands of dollars in cash with no professionals involved.

Now some people do all of the above and live their dreams. (Is it St. Jude who protects fools?) Others do the above and discover they have bought nothing more than a nightmare.

I considered property in Troncones for several years, but the land was ejido and "buying" it was buying no more than a handshake. We waited until legally registered titles were available, paid about double the price, but now have the security of having properly registered land through our fideicomiso.

We used a lawyer for the purchase. That added several thousand dollars, but saved us potential tremendous grief. The lawyer and vendor had gone through the entire purchase process up to the point of signing the sale documents. As the lawyer was reviewing the documents one final time he reminded the vendor that swearing false information was very serious and could land a person in jail. The lawyer then confirmed that the vendor was not married.

The vendor paused, then confirmed that it was like he had never been married. In his eyes, because they didn't have children together it was like they had never been married. The lawyer stopped the process, researched the court records, determined that the vendor had been married and never divorced, assisted the vendor to obtain his divorce and obtained a written agreement from the ex-spouse that she had no claim on the property.

We then went through the whole purchase process again. Without using a lawyer who caught this, we could have faced the prospect of the ex-wife surfacing years after the sale and claiming that the vendor had no right to sell this "community property".

Instead, we have our beachfront home built in Mexico waiting for our retirement and are generating revenue from rentals in the meantime.

Bad real estate transactions are not unique to Mexico though. Here in Vancouver we had a recent case of a person buying some waterfront recreational property and building a house. More than a year later it was discovered that the person who "sold" the house had forged the signature of the true owner, an elderly American who never visited the property. It was only when the owner realized he hadn't received a tax notice for the year that he investigated and discovered that his property had been "sold".

The outcome of this was that the true owner recovered his property, but the purchaser had bought nothing but a nightmare.

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