Jul 03, 2025This is a true story and case study that we are sharing with you.
US citizens or any foreigner to Mexico, buying property in Mexico are often attracted to homes or condos under development in scenic areas, which promise to offer the combined advantages of attractive locations and modern amenities. Entranced by the vision of what could be, they may sign a contract without closely examining the terms or thinking that they need independent representation to complete the transaction. While this can be done, it is not ideal and can leave a buyer without much recourse if problems crop up later.
A recent client we had, who was purchasing a condo in a luxury development under construction in Cabo San Lucas, illustrates the value of bringing in outside counsel to represent a buyer’s interests in this kind of purchase. (Don’t be alarmed—this story has a happy ending!) Our efforts on their behalf to manage the transaction, confirm that there were no legal impediments, and to negotiate better terms smoothed the process and provided reassurance throughout.
Buying a property pre-construction is very common in Mexico, as the country does allow a property to be sold before it is ready to be delivered. Of course, buying a unit in a development in the process of being built involves a certain amount of trust, as the buyer could end up taking a potentially unknown financial hit should the property not be completed on time, to say nothing of other possible legal complications that can affect real estate.
Our team began working with our client by reviewing the documentation the family needed to sign. These preliminary documents are not the final documentation, but they set the rules of the transaction between the parties—what is to be sold, the agreed upon price, the down payment, delivery date, and penalties for failing to meet the terms of the agreement.
The seller in this situation was the developer. We spoke to them and to the broker to inform them that we would be representing the client, a revelation that is not always well taken by either broker or developer in this type of scenario. Understandably, they may not be enthusiastic about the involvement of an outside attorney, as having an independent review could slow down the process. However, it is a vitally important step that is worth the couple of weeks it took in this case to ensure that everything was ready legally to move forward.
Our job was to verify first that our client was buying what they thought they were buying. This included research on any liens, easements, or other legal issues that could be a future problem to the buyer. It is essential for anybody purchasing property in Mexico to understand that the broker is not an attorney, and they usually have more loyalty to the developer (who will, after all, eventually be paying the broker’s fees). Even though these individuals are operating in good faith, it is always in the buyer’s best interest to have independent counsel who is focused on looking out for their best interests.
Our next task was to negotiate favorable terms for our client. We were able to negotiate a better down payment as well as more robust penalties in case the developer didn’t deliver on time. After all, a property is not the same investment if the buyer can use it on day one, compared to if they have to wait six months past the date they were assured it would be ready. It’s important to have legal strategies in place to have leverage in the future in case a developer is not compliant with the timelines established in the contract. This gives the buyer legal grounds to deliver on time, or as fast as possible under the circumstances.
The development also included a number of amenities that were governed by internal rules for their use. Some had restrictions for some of the owners, so we had to dig deeper into those rules to make sure that none of our client’s rights were affected. The purpose was to confirm that they would have more free use of the amenities and would not bump into any restrictions or problems with the owners in the future.
We kept representing the client throughout the course of construction to make sure everything kept progressing as expected. Our client only had to be minimally involved as we took care of any complications or headaches that tend to accompany this type of transaction along the way. We made sure all the formalities were signed as needed, and he only had to be there on the last day when the deed was signed and he received the keys. Speaking our own behalf, that was the most satisfying moment of the transaction—when we got to see our client finally getting the property the family had always wanted.
If you’re considering buying your dream property in Mexico, but you’re concerned about navigating the legal and financial details of purchasing property abroad, Mexico Business Lawyers can help. Our team of professionals will be by your side through every step to complete a successful transaction. To schedule your consultation, contact us here today.
Yes, that’s true—but in Mexico you can still purchase coastal property using a fideicomiso (bank trust) or a Mexican corporation. This ensures legal ownership even within the restricted zone.
Good point—buyers must verify liens, easements, and confirm clean title via public registry research. Associate a notario público and an independent attorney to dig into title history.
Contracts are in Spanish and often benefit the developer. You should hire bilingual legal counsel to review every clause—especially payment terms, penalties, and delivery dates.
Exactly—that’s why independent representation is critical. Brokers typically favor developers. Having your own lawyer ensures your interests are prioritized.
Delays are common. Insist the contract includes clear completion timelines, penalty clauses for late delivery, and payment schedules tied to actual construction milestones.
Always verify the developer holds all necessary construction permits and utility approvals. Missing permits can cause major legal and logistical issues during or after construction.
Yes—you can use a Mexican corporation or fideicomiso to hold the asset. Ensure your attorney sets it up correctly—missteps here can lead to tax or ownership issues later.
Avoid lump sum payments. Instead, use staged payments tied to milestones and always channel funds through a notario público or escrow arrangement when available.
That happens. Always review finishes and brands upfront—ask for model-unit checks and written specifications. Don’t assume the sample pictured matches what you’ll get.
You need explicit legal clauses around penalties and enforcement. With your own attorney, you’ll have leverage—otherwise, you might end up powerless to act.
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