U.S. citizens should be aware of the risks inherent in purchasing real estate in Mexico, and should exercise extreme caution before entering into any form of commitment to invest in property there. Investors must recognize the absolute need to obtain authoritative information and to hire competent Mexican legal counsel when contemplating any real estate investment. Mexican laws and practices regarding real estate differ substantially from those in the United States. Foreigners may be granted the right to own real property only under very specific conditions. Whether investing through a trust mechanism in border and coastal areas or by outright purchase in Mexico's interior, U.S. citizens are vulnerable to title challenges that may result in years of litigation and possible eviction.
Title insurance is virtually unknown and untested in Mexico.
In addition, Mexican law recognizes squatters' rights, so homeowners can spend thousands of dollars in legal fees and years of frustration in trying to remove squatters who occupy their property. Buyers should be fully informed and take sufficient time to consider their decisions before signing time-share contracts, ideally after consulting an independent attorney. They should resist pressure to sign a contract the very day that they see the model unit. Mexican law allows time-share purchasers five days to cancel the contract for unconditional and full reimbursement. U.S. citizens should never sign a contract that includes clauses penalizing the buyer who cancels within five days.