RENTERS RIGHTS TO OWN THE HOUSE AFTER 5 YEARS

This post on the "sold the house" thread has the following included"

But, I have a question: does this mean you have to move every 5 years. A friend of mine living lakeside for 25 years said that there is a law in Mexico that if you rent a home for 5 or more years, you become the owner of it, and the real owner has no rights to the house. She told me a story about something that allegedly happened to her....she's a gringa who was renting to another gringa. She did not know of this law, but her renter did. The renter had been there 7 years, and was planning to do the claim to the property. However, fortunately for my friend, she had to remodel in the rental house due to leaky roof, some walls needed fixing, floors, etc. So she asked the renter to move to an apartment she owns while the remodeling went on. It was lucky for her, because with this renter OUT of the house, she lost her right to make a claim for ownership. WHen the remodeling was done, the renter was going to move back in and talked to my friend about how it was her house now and thank you for remodeling at your expense. THe owner was shocked and called a lawyer. He said NOPE she lost her right by moving out, go change the locks. So the renter took her to court and sued her for the house, but fortunately the renter lost on that one technicality...that she moved out. The renter tried to claim that the owner tricked her into moving out, but it didn't stick. Anyways, that's the story I was told, don't know if it is true or not. Check that out maybe..."

As owners of rental property, we would greatly appreciate your information about this "law" we never heard of until now???

Long term leases over 5 years much be registered and have other nuances. Also there is the legal right of derecho del tanto which means the people in possession of a property can acquire ownersip rights and then a percentage of the property and as such their payments might go from being for rent to being for buying out the other person.

Also, if you are a landlord, have a good lease drawn up to avoid problems. A good legal advisor will think of things and situations you never will but when they happen, you have a greater level of protection.

Thanks. The case in point is a five year lease; standard residential type, properly executed in English and Spanish.
Are you saying that if they are allowed to continue paying rent and residing past the end of the five years, they acquire buyers' rights?
If that is the case, it looks like we would need to terminate their residency at the end of the lease. ??

A standard lease? So you mean the person made up their own lease or bought it for 10 pesos at a paper store? Who made the lease? Was it made with the parties and property in mind? What was the educational level of the person making the lease and their knowledge of the Spanish language?

Was there a lease at one time and then nothing in writing after? Just oral continuations? Each situation is different so one cannot paint with a broad brush, if you have a well written contract with written extensions then that is better than oral or contracts you paid 10 pesos for.

I don't think a contract in English will hold up in Mexico, right? One rental house contract signing was very technical. Our co signers had to be present with their own home deed andthe owner of the home always came with her attorney. That was for a one year contract. Plus we paid the year in advance for a better deal. Lakeside is another story with all the rental companies running things nob style. Be careful gringal!! Good that you know this now!

Intercasa wrote:Long term leases over 5 years much be registered and have other nuances. Also there is the legal right of derecho del tanto which means the people in possession of a property can acquire ownersip rights and then a percentage of the property and as such their payments might go from being for rent to being for buying out the other person.

Can you give an example of renters acquiring property by exercising their derecho del tanto or how exactly they acquire a derecho del tanto?

My understanding is it applies to the acquisition by co-owners of another owners share of a property if one decides to sell their share. In which case the non-selling owner has the first right at buying the share for sale.

Hey...........I'm not a lawyer, but do have some horse sense. lol.

Tenants are college educated U.S. citizens on FM visas here. They have been in the property for less than two years of a five year lease, which was written in English and translated into Spanish by an "official" translator, since we understand that it must be written in Spanish to be legal in Mexico. It is a multi-page document covering any normal situation in a residential lease.

My only concern here is whether we must evict them before the lease runs out, lest they acquire some unanticipated rights such as '57 Chevy spoke of in her post.

Apparently the board's pseudo legal advisor has no concrete answer to any of the above questions seeing he posted earlier today on the thread promoting his "law firm" but nothing here.

The truth is that I have no business asking for free legal advice and expecting Spencer to take time to find the answers for me. If he happened to know the answer and gave it, I would have been appreciative.......but down the line in the lease, I'll go see a lawyer if need be....and expect to pay.

gringal wrote:The truth is that I have no business asking for free legal advice and expecting Spencer to take time to find the answers for me. If he happened to know the answer and gave it, I would have been appreciative.......but down the line in the lease, I'll go see a lawyer if need be....and expect to pay.

Why not? He offers. And uses this site to self promote. Plus he already chimed in with some "advice". Just wasn't the answer people were looking for.

True enough..

However, I'd be foolish to seriously rely on legal advice posted on the internet if push comes to shove down the line. That post about 5 years to ownership from the OP wouldn't do my tenants much good in court, either.

I can't picture any of the parties going to court over the issue and saying "but I read it on the internet". LOL.

I've not had any personal experience with the issue so I am hesitant to say anything concrete because unless I've experienced it personally, I have no basis one way or another. The issue was brought to my attention by an accountant a year ago with reference to a restaurant in Ajijic who has leased their space for years and done improvements and the accountant said he has seen some cases as described above but really as in any case it depends on the fine details which are unknown and being applied to a speculative situation. Usually the principle applies to partnerships and is akin to first right of refusal. I'm meeting tomorrow with my attorney partner and will post what he says, he is good and is also a law professor at the U de G.

I asked my mother in law and girlfriend (MOL is attorney) but no concrete answers, my partner will know more.

The derecho de tanto is a widely used legal procedure that anyone graduating from law school here should have a pretty good understanding to situations when it applicable.

When Salinas reformed the law on ejidos, the derecho de tanto principle was one of the more important and well known mechanisms in privatizing ejido property. This is where I came aware of it when my suegro subdivided one of his parcelas into residential building lots. The land had to be first offered to other members of the ejido (at his asking price) and then to anyone who had worked the parcel on his behalf. Again, the seller set their price.

It is also commonly found in corporations when partners decide to divest. It says who gets first dibs on the share being sold.

Spoke to my attorney partner, he is of the opinion that a tenant cannot exercise that right against their landlord. It seems to be a rumor that one can do it (which i've heard from other professionals) , I haven't seen any files in court and per my conversation today wouldn't think you'd have to boot your tenant out every 5 years, just have a well written lease that conforms to the Jalisco State Civil Code.

I asked my attorney daughter and she said there are cases when a tenant acquires this right. But not merely by residing in a dwelling for a period of 5 years.

What she said landlords must avoid are improvements made my the renters at the renters expense. If these are major expenses (like a whole new roofas an example) then they can press for a derecho al tanto. But that does not mean they take ownership of the property outright but can become a sort of vested partner. When and if the property comes up for sale they have the first shot at it.

She said it is covered in the Jalisco Civil Code but told me to look it up!

That makes sense to me. Keeps the landlord responsible for upkeep.

Also depends on the contract, each case is different and that is the hard part of giving advice or looking for it on the internet, unless you know every detail, you can give or receive bad advice. The civil code has certain provisions but also they may be waived.

This is an old topic I happened to stumble across just now...and since my story is what started the discussion, I figured I'd add a post. My friend who had this happen to her - well, maybe none of the lawyers involved knew what was going on, and were relying on rumors, as Intercasa mentions above. The reality is that she had to get a lawyer and pay him, and go to court to fight off this renter's assertion that she had a right to own the house after 7 years of renting it. It has something to do with squatters rights and harkens back to stories about squatters in Mexico living on land owned by someone else, and if they make an improvement - which can be a ramshackle hut - they can push a claim. Well, my friend's daughter is a lawyer in Mexico, at age 20. I'm not sure what the law school course is in Mexico, but it seems to be they start after high school and it is rather more like a tech school degree...a couple of years and bingo, they are licensiados. I have talked with lawyers in Mexico about various things from adoption to real estate to suing someone for fraud, and I don't get concrete stuff from them....it's been loosey-goosey...so, maybe using someone elderly who has been practising a very long time, and who actually has read law books and had hundreds of cases in the area of interest would help. If you have interest in the law, and can translate it, maybe it's good to sit down and look up the Jalisco codes yourself. I have looked at several websites in Jalisco having to do with real estate law, and the law does favor the renter. It is the opposite from the way things are done NOB.

Renter's rights are per code but also contract and a properly drawn up contract will save you future hassle as you can place in verbiage to waive certain potential rights or claims of a tenant.