Renting Property in Mexico: Guidelines and Expert Insights
We had talk about buying property in Mexico a lot in this blog, but how about renting?
A lot of you had asked us to give some quick guidelines about renting a place in Mexico, either for long term, short term, vacations, office, warehouses, etc.
So that is why today we delve into the intriguing topic of renting property in México, a subject of great relevance to expats seeking to relocate or currently residing in this beautiful country. Our aim is to provide valuable insights and expertise, ensuring a beneficial and informed experience for our esteemed readers. So, without further ado, let us explore the intricacies of what you need to know about renting property in México.
When individuals relocate to México, renting property often becomes the preferred choice for securing temporary but relatively long-term accommodations. As an adviser with extensive experience, I wholeheartedly recommend this approach, particularly advocating for six-month leases at the outset. This timeframe allows for exploration of various areas within the same city, comprehensive understanding of available property types, and even the opportunity to experience different cities or states. Ultimately, this exploration aids in making an informed decision regarding the ideal state, city, and property for long-term residence.
Nevertheless, it is important to acknowledge that the property search process can be accompanied by certain challenges, particularly in navigating the intricacies of leases from different property owners or realtors. Hence, the focus of this post is to shed light on the essential aspects that must be examined within leases to ensure the prevention of unfavorable renting experiences.
Before we proceed, I would like to clarify that the forthcoming discussion should not be misconstrued as an indictment of property owners, realtors, or real estate agencies. México boasts numerous individuals occupying these roles with integrity and professionalism. Nonetheless, it is prudent to exercise caution, particularly in the early stages of such relationships, in order to safeguard one’s interests.
Establishing Responsabilities
First and foremost, it is imperative to establish a balanced set of responsibilities between the owner and the tenant. While this may appear self-evident, it is disconcerting how frequently leases are encountered wherein all responsibilities are unfairly shouldered by the tenant, especially when the tenant lacks fluency in Spanish. Hence, it is essential to ensure that the lease allocates the tenant’s responsibilities to the appropriate scope, encompassing the property’s everyday use and maintenance, while reserving the owner’s responsibility for preventive maintenance, structural issues, and significant electrical and plumbing problems. It is crucial not to enter into a lease where the tenant assumes excessive responsibilities, even if the property seems like a dream and the owner or realtor appears pleasant. Of course, you can contact us at online@roelatam.com to help you through the process by drafting a clear bilingual (English and Spanish) lease agreement, or reviewing the one your landlord provided.
Exit Clauses
Furthermore, it is of utmost importance to ascertain the presence of an exit clause that protects the tenant’s interests. While most leases in México incorporate an exit clause for the owner, delineating circumstances under which the contract may be terminated if the tenant fails to fulfill their obligations (e.g., non-payment of rent for three consecutive months), very few leases include an exit clause for tenants. Thus, it is essential to include a clause within the lease that outlines the circumstances in which the tenant may nullify the contract if the owner fails to fulfill their obligations. Additionally, it is crucial to consider extreme circumstances that could render the property unsafe for the tenant’s habitation, such as earthquakes, storms, or other risk factors. Under such circumstances, tenants should not be compelled to continue paying for a property that jeopardizes their well-being.
Meet Your Neighbors
While optional, it is highly recommended to engage in dialogue with neighbors or previous tenants, if possible, especially when considering rental options within a building or complex. These individuals possess firsthand knowledge regarding potential issues concerning common areas or the overall condition of the building. Their insights can prove invaluable in understanding the reasons behind a previous tenant’s departure, as well as their likes, dislikes, and overall relationship with the owner.
Written Agreements
The importance of ensuring written agreements cannot be overstated. Although verbal agreements, or “acuerdos de palabra,” are commonplace in México, primarily among long-standing friends or individuals who have consistently demonstrated their trustworthiness, the dynamics change when it comes to business transactions. Even if the owner or realtor appears amiable and congenial, it is vital to document all agreements in writing. Should changes to the contract be negotiated and agreed upon, they must be incorporated into the contract before signing. In the event that an agreement is reached subsequent to the signing of the contract, a separate document must be drafted, outlining the revised terms and duly signed by both parties. To provide an additional layer of protection, it is advisable to secure the signatures of two witnesses.
Receipts For All Payments
Equally important is the necessity of obtaining written receipts for all payments made. Although seemingly obvious, this practice is closely tied to the previous point of documenting agreements. The purpose of obtaining written receipts is to preempt any potential misunderstandings or disputes that may arise in the future. While it may initially feel awkward to request a receipt, particularly when the provider should have furnished it proactively, it is essential to recognize that informality is ingrained in Mexican culture. Therefore, it is incumbent upon the tenant to proactively seek the issuance of a receipt, ensuring proper record-keeping and accountability.
Pagarés
Let us now turn our attention to the utilization of promissory notes, known as “Pagarés” in México. These notes typically serve as a formal commitment to payment within the context of agreements, including rental payment commitments. They represent a prudent measure designed to safeguard the owner’s interests in the event that the tenant defaults on rent payments while continuing to occupy the property. Should your landlord or realtor request the signing of these notes (typically one per month of rent, until the final month of the contract), there is no cause for alarm, provided you possess an exit clause and honorable intentions. However, it is imperative to be mindful that for every month of rent paid, the corresponding promissory note must be returned to you, in addition to the accompanying receipt. This ensures that the landlord or realtor cannot falsely claim non-payment in the future.
Property Inspection
Before signing the lease, it is strongly advised to enlist the expertise of an electrician and a plumber to assess the property’s condition. As mentioned earlier, the tenant assumes responsibility for maintaining the property’s systems and services in the same condition as when initially rented. Therefore, it is crucial to ascertain the current state of these systems and services. Consider capturing photographic evidence on the first day of tenancy as an additional precautionary measure. If the property is in optimal condition, there is no further action required. However, if any repairs or maintenance are necessary, it is imperative to notify the landlord or realtor and establish an agreement regarding the resolution of these matters.
Hire An Expert
Lastly, but certainly not least, it is highly recommended to engage the services of a bilingual professional with expertise in interpreting and assessing lease documents. Relying on Google Translate or a friend with basic proficiency in Spanish or English may prove insufficient for this task. Most owners or realtors do not provide English leases, and even if they do, it is advisable to seek professional review. Opting for an impartial interpreter experienced in lease interpretation will ensure that your interests are safeguarded, allowing you to navigate the process of finding your dream home with confidence and peace of mind. At ROE Latam Lawyer Firm, we are pleased to offer lease review services. Whether you prefer remote or in-person assistance, please do not hesitate to contact us at online@roelatam.com should you require our expert guidance in this matter.
In conclusion, I sincerely hope that the information provided will empower you as you embark on your journey of renting property in México. By arming yourself with knowledge and taking proactive steps to protect your interests, you can ensure a favorable renting experience that aligns with your expectations and aspirations.
Finally, if you want to learn about buying property in Mexico, we suggest you check these posts:
- How To Purchase Real Estate In Mexico: Consice Key Points
- Expert Advice: What You Need To Know When Buying Real Estate Outside Mexico’s Restricted Zone
- Top 8 risks when buying Real Estate in Mexico
And please, feel free to contact us at online@roelatam.com we will be glad to hear from you.