Consumer Protection-Related Dispute Resolution Services


At PeninsuLawyers, we specialize in securing your investment in real-estate in the Yucatan Peninsula, whether by providing unparalleled closing services or consumer protection-related dispute resolution services.

PROFECO – The Champion of Consumers in Mexico

In Mexico, consumer protection in real estate acquisition is governed by federal laws, ensuring a fair and transparent process. PROFECO, the consumer protection agency, plays a crucial role. When acquiring real estate, sellers must provide accurate information about the property, including its condition and legal status. If any issues arise, consumers can turn to PROFECO for assistance.

PROFECO’s role involves resolving disputes, ensuring contractual compliance, and mediating between buyers and sellers. They have the authority to investigate and sanction any deceptive practices or violations of consumer rights. Consumers have the right to clear and truthful information, fair contractual terms, and protection against misleading advertising. PROFECO empowers buyers by upholding these rights, promoting a trustworthy real estate market in Mexico.

01. Conciliation procedure before PROFECO

Real estate transactions can sometimes hit unexpected roadblocks, and as a foreign buyer, it’s essential to know your rights and avenues for legal recourse. Mexico has established consumer protection mechanisms to safeguard the interests of property buyers, one of which is the conciliation procedure facilitated by PROFECO.

The conciliation procedure is a formal process through which disputes between consumers and service providers, including real estate developers, can be resolved. Here’s a brief overview of how the process typically works:

a. Filing a Complaint

If you encounter issues with a real estate developer, start by filing a complaint with PROFECO. Provide detailed information about the dispute, including documents and evidence supporting your case. At PeninsuLawyers, we are experts in preparing compelling Complaint Writings, which are the base and most important part of the procedure.

b. Notification to the Developer

PROFECO will notify the real estate developer about the complaint and initiate the conciliation process. The developer is given the opportunity to respond and engage in negotiations to reach a resolution.

c. Conciliation Meeting

A conciliation meeting is scheduled, where both parties, along with a PROFECO representative, discuss the issues at hand. The goal is to reach a mutually agreeable resolution. Having legal representation, such as a bilingual lawyer, during this process is indispensable to ensure your interests are protected.

d. Agreement or Legal Action

If an agreement is reached during the conciliation meeting, it is formalized, and the dispute is considered resolved. However, if an agreement cannot be reached, PROFECO may issue an opinion where, depending on developers’ breaches to the contract and/or violations to the Federal Consumer Protection Act, PROFECO determines the amount to be paid to consumer by developer, plus, in case developer has incurred in abusive practices or included abusive clauses in the contract, a bonus payment of up to 30% of the transaction price.

02. Conciliation procedure VS. traditional litigation

Opting for a conciliatory procedure before PROFECO, as opposed to traditional litigation in a court of law, offers several advantages for foreign real estate buyers in Mexico, including but not limited to:

a. Cost Efficiency

Conciliation through PROFECO tends to be more cost-effective than litigation. Legal proceedings often involve substantial fees, while PROFECO provides a platform for dispute resolution at a lower cost, making it more accessible for foreign buyers.

b. Time Efficiency

Traditional litigation can be a lengthy process, potentially taking years to reach a resolution. On the other hand, PROFECO’s conciliation process is designed for quicker resolution, offering a more expeditious way to settle disputes.

c. Informality and Accessibility

The conciliation process is generally more informal than courtroom proceedings, making it accessible to individuals without an in-depth understanding of legal intricacies. This informal approach can simplify the resolution process for foreign buyers who might find the legal system unfamiliar.

d. Expertise in Consumer Protection

PROFECO specializes in consumer protection matters, including real estate disputes. Its expertise in this area allows for a more focused and efficient resolution process tailored to the specific concerns of foreign real estate buyers.

e. Mediation and Negotiation

PROFECO emphasizes mediation and negotiation, fostering an environment where parties can reach mutually agreeable solutions. This collaborative approach contrasts with the adversarial nature of litigation, potentially preserving relationships between buyers and developers.

f. Preservation of Business Relationships

Opting for conciliation over litigation may preserve the relationship between buyers and developers. A less confrontational process can be conducive to continued business interactions, which might be vital for ongoing property management or investment matters.

In summary, PROFECO’s conciliatory procedure provides a more cost-efficient, timely, and accessible alternative for resolving disputes between foreign real estate buyers and developers in Mexico, fostering a consumer-friendly environment that aligns with the principles of fairness and efficiency.

03. Most Usual Claims

At PeninsuLawyers, we can assist foreign real-estate buyers in the Yucatan Peninsula, to resolve any dispute that may arise with developers, via a conciliation procedure before PROFECO in many cases, including, but not limited to, the following:

a. Reimbursements

Occasionally, situations deviate from the client’s expectations, whether due to factors within their control or the developer’s. In these instances, the buyer may have a legitimate claim for a refund from the developer. Unfortunately, developers often withhold refunds without justification. We can aid you in recovering both your principal amount and accrued interest promptly.

b. Refusal of Assignment of Rights

Many buyers view property acquisitions in Mexico as investments. During the sales process, developers, cognizant of this, assure buyers that they can freely assign their rights under the promise agreement to a third party (referred to as “resale”) before finalizing the property title. However, when this moment arrives, developers deny authorization for the assignment or resale, detrimentally impacting the buyers. PeninsuLawyers intervenes, utilizing the Consumer Protection Act to compel developers to permit such assignments or resales.

c. Payment of Penalties for Late Deliveries & Rescission

Timely possession of the property by developers is a rarity, often accompanied by delays varying in duration. Developers, however, typically resist compensating buyers for these delays, sometimes attributing them to a “force majeure” event without substantiating the claim. PeninsuLawyers can advocate for your rights, ensuring developers pay penalties for these delays or, if necessary, facilitating rescission.

d. Hidden Defects Claims

In Mexico, developers engage in an unfair and illegal practice by limiting the guarantee term for property defects to one year, contrary to the Consumer Protection Act’s provisions. The Act stipulates a 5-year term for structural defects, a 3-year term for waterproofing issues, and a 1-year term for minor defects. PeninsuLawyers can support your claim for the rightful and extended guarantee periods mandated by law.

04. Non-Compliance in The Registration of Adhesion Contracts

As you embark on the exciting journey of investing in Mexican real estate, it’s essential to be aware of the legal framework that protects your rights as consumers. In accordance with the Federal Consumer Protection Act in Mexico, it is mandatory for real estate developers to register their contracts as “adhesion contracts” before. Failure to do so can result in fines and penalties for the developers.

Understanding Adhesion Contracts

An adhesion contract, in the context of real estate transactions, refers to a standardized contract where the terms and conditions are set by one party (the developer) with little to no room for negotiation by the other party (the buyer). Recognizing the potential power imbalance, Mexican consumer protection laws require developers to register such contracts with PROFECO to ensure transparency and fairness.

a. Legal Compliance

Registering contracts as adhesion contracts is a legal requirement outlined in the Federal Consumer Protection Act. It ensures that developers comply with regulations aimed at protecting consumers’ rights.

b. Transparency and Fairness

Registering contracts with PROFECO promotes transparency and fairness in real estate transactions. It allows regulatory authorities to review and assess the terms of the contract to ensure they adhere to consumer protection standards.

c. Consequences for Non-Compliance

Fines and Penalties: PROFECO has the authority to impose fines and penalties on developers who do not comply with the registration requirement. These financial consequences serve as a deterrent against unfair practices.

Legal Scrutiny: Non-compliance may trigger legal scrutiny, potentially leading to investigations and legal actions against the developer. This can be a powerful mechanism to protect the interests of buyers.

d. Your Rights as Consumers

As foreign buyers, it’s crucial to be informed about your rights under Mexican consumer protection laws. The registration of contracts as adhesion contracts is designed to protect you from unfair terms and practices, ensuring a more equitable real estate transaction.

e. Seek Legal Advice

To navigate the intricacies of real estate transactions in Mexico and ensure that your rights are upheld, it is advisable to seek legal advice. Engaging a seasoned bilingual lawyer, such as PeninsuLawyers, can provide you with the guidance and assurance needed to navigate the legal landscape effectively.

In conclusion, as you embark on your real estate journey in Mexico, be vigilant about the registration of your contract as an adhesion contract with PROFECO. This not only

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