If you’re facing a legal issue with a real estate developer in the Riviera Maya, one question is likely top of mind: “If I win, can the other party be forced to pay my lawyer’s fees?” This is a critical financial concern for any investor. However, the rules for recovering legal fees in Mexico real estate disputes are very different from those in the United States. Understanding this difference is key to making smart decisions.

In short, recovering your legal fees in Mexico is difficult. Furthermore, it is only possible if you go through a full lawsuit and win. The process is not automatic, and the final amount is up to a judge. Let’s explore what this means for you.

The First Steps: Negotiation and Conciliation

When a problem arises, the first steps are usually direct negotiation or filing a complaint with PROFECO, Mexico’s consumer protection agency. These paths are designed to find a faster, less expensive solution than going to court. For example, you might negotiate a penalty payment for a late delivery. You might also use PROFECO to help mediate a resolution.

However, it is crucial to understand one thing. During the negotiation and conciliation stages, you cannot recover your legal fees. Each party is responsible for its own attorney costs during this phase. As a result, these initial steps are about reaching a compromise to avoid the greater expense of a lawsuit. The goal is to solve the problem efficiently, with both sides covering their own legal expenses to get to an agreement.

The “Loser Pays” Myth in Mexican Courts

The only scenario where you might recover legal fees is in a formal lawsuit, known as a juicio. This happens when all negotiation and conciliation efforts have failed. Even then, the idea that the “loser pays” automatically is a common myth. In Mexico, a judge will only order the losing party to pay the winner’s legal costs under specific circumstances.

This is based on the legal principle of “temeridad y mala fe,” which translates to recklessness and bad faith. To award legal costs, a judge must determine that the losing party acted recklessly or dishonestly. For example, they may have filed a lawsuit with no real evidence. Or, they may have used delay tactics just to cause problems. Proving this bad faith can be challenging.

Furthermore, even if a judge awards you legal costs, the amount is rarely 100% of what you actually paid your lawyer. The judge calculates the amount based on a state-specific tariff or schedule of legal fees (arancel de costas). This amount is often significantly lower than the real-world cost of hiring an experienced litigation attorney.

How This Differs from the U.S. “American Rule”

For investors from the United States, this system can be confusing. The U.S. primarily follows the “American Rule.” This rule states that each party pays its own legal fees, regardless of who wins or loses the lawsuit. The outcome of the case does not typically matter for legal costs.

However, there are important exceptions to the American Rule. The most common one in real estate is a contract clause. Many U.S. contracts include a “prevailing party” clause. This clause specifies that the loser of any dispute must cover the winner’s reasonable attorney fees. This contractual agreement makes recovering legal fees in the U.S. much more straightforward if it’s in the contract. While Mexican contracts can include similar clauses, their enforcement depends heavily on the judge’s final decision regarding bad faith.

What This Means for Your Investment Strategy

The Mexican system for recovering legal fees in Mexico real estate matters encourages resolving disputes early. Since you cannot get your fees back in negotiation or at PROFECO, these stages offer a powerful incentive to find a practical and cost-effective settlement. Going to court is a serious financial decision. You must be prepared to fund the entire lawsuit, even if you have a strong case and ultimately win.

Therefore, working with an experienced legal team is vital. An expert can help you assess the strength of your case. They can also guide you on whether the potential outcome of a lawsuit justifies the costs involved. A strategic approach focuses on resolving your issue in the most efficient way possible.

Facing a real estate dispute in the Riviera Maya? Don’t navigate it alone. Contact PeninsuLawyers to protect your investment and secure your property rights.