When you buy or sell real estate in Mexico brokers and agents sometimes tell you that everything is done differently in Mexico than in the USA. While in many respects, there are some differences, many parts of the process are remarkably similar to the USA. Therefore, you should make sure your contract contains the same protective clauses and paragraphs you will find in a US contract of sale. (Editor’s note: Most of the MLS BCS agents in Baja California Sur use contracts utilizing many features found in NAR contract, adopted to Mexican laws)
Where there may be some differences in the law, there are huge differences in the enforceability of the contract. Why? The difference arises due to the Mexican legal systems, courts and the extremely long time in many areas of Mexico it takes to get a judgment or decision. It can easily in some areas of Mexico take 5 or more years to get a judgment and sometimes due to factors not usually encountered in the US, the decision in any lawsuit may not be the correct one.
What is the solution? Write a good contract and in the event a dispute arises, make certain it contains a mediation and arbitration provision. The arbitration laws are excellent in Mexico and if you and the other party agree to arbitrate it is likely you will resolve your dispute within 8 to 12 months. That decision is then entered into the Court as a judgment. Most arbitration are binding and cannot be appealed (unlike most Court judgments in Mexico which are often appealed adding many more years to the final decision).
The Author: Don D. Nelson is a US Attorney and retired CPA with over 35 years experience in business, real estate, estate planning and tax law. He lives in Los Cabos. He can be reached at email@example.com
If you want to learn more about arbitration or mediation, the clauses to put in your next contract, and how to have a dispute arbitrated or mediated, email us at firstname.lastname@example.org If all parties agree, you can even remove your case from the Courts and have it decided by arbitration. It is even legal to have the arbitrator be a US attorney or a panel of US and Mexican attorneys with real estate experience. Due to the speed of the process, you may save a lot of money in costs and attorney’s fees.