Southern Mexico November 2010
The noise of the chain saw destroyed the silence of a beautiful sunny morning and finally became so abusive, I went out to the patio to see what was going on. I assumed the bomberos (firemen) were cleaning up the branches we had cut down yesterday and failed to remove. Instead they had cut almost every living plant down, leaving a barren dirt lot where there had been tall palms and old lemon trees. The property belongs to the government so there is no one to complain to. Why destroy healthy beautiful trees and plants which had taken years to grow. There is an endemic lack of rational reasoning here and the truth is an unknown entity.
This is the year of the fifth pilgrimage to our house in the tropics. I can’t call it my house because I own it with two other people. But it feels like my home because my partners visited once for two weeks in 2006. Since that time I have watched over it, repaired it, redecorated it, landscaped it and enjoyed it. Along with the pleasure came the frustration each year, trying to get the papers signed so we become the legal owners. The real estate broker, a heavy set American woman in her sixties, is infamous for her shady deals both here and in the States. The guy who sold us his house knew that the entire neighborhood was part of a lawsuit over land ownership and it was illegal to sell property without a free of lien certificate.
Our coup de foudre (falling madly in love) with the house set us up for the perfect scam. We paid the owner of the house before we had any of the legal papers. Infatuation as always can be dangerous. The lawyer who represented the seller and us as well, spent two years discovering her client had never paid his trust dues to the bank for ten years. She later admitted when I fired her that she knew about the land dispute as well. Here Mexican law is very flexible. It doesn’t matter who owes the money as long as someone pays the bill. So we paid the seller’s back fees totaling $5600 so the bank would process our fideicomiso for the house. Finally in November 2008, after two years of frustration and lies, I fired our lawyer in the office of my new notary. Within days he informed me that only the land had been recorded in the legal documents. So I hired an architect to draw plans of the house. It was appraised at $140,000. We had paid quite a bit more but we had to keep the seller’s capital gains tax low since we had to pay it. Assuming that we had finally reached the finale of this story, I was shocked when I heard that the seller’s two sons had to be removed as beneficiaries from the bank documents in order to move forward.
It took a year of emails, phone calls and letters until the seller’s two sons went to the Mexican consulate in the States and signed over their lean on the house to me. Notaries need to have a law degree but don’t expect any legal help or support from them. After two years working with the notary here, I realized he wasn’t representing my interests. Why did he suddenly discover after we had waited one year for the legal power of attorney from the two sons, that he didn’t have the seller’s deceased wife’s registered death certificate. My two partners had become feed up with this final run around so they insisted on hiring an American lawyer to get the last document, and make sure the fideicomiso was completed. As we all know about American lawyers, most of their work involves sending their clients bills and this was mostly what he did. He sent a lot of emails to the notary in Mexico and received the same reply for for 8 months. It should be ready soon or “espero que la próxima semana estemos listos para firmar.”
I finally began emailing the notary myself after this lawyer had billed $2000 and all we had was a death certificate, a power of attorney from my partners to myself and lots of mananas. As this saga continued without an end in sight. I suggested many times to my business associates that we threaten to bring a law suit against this seventy year old ex real estate developer, originally from New York who had relocated to the mid-west and probably screwed so many people over in his life that we shouldn’t feel singled out. My partners are not confrontational people, a characteristic of native-born Seattlelites, so until now, we have never taken legal action against the seller.
It’s November 2010 on the Pacific coast of Mexico. The sky is a light cobalt blue, the temperature is a warm 90 degrees and the ceiling fan is spinning as I sit at my computer describing the convoluted Mexican legal system. After numerous emails and promises that I would be able to sign the fideicomiso papers soon after I arrived in Mexico, I received a cost estimate of $20,000 from the notary a day before I left home in November. I was preparing myself for another battle. Within a day of arriving in Mexcio, I contacted a respected American real estate broker in town. She referred me to a Mexican attorney that she had worked with and trusted. I impressed myself with my language skills when I was able to explain the entire four year saga in Spanish. I complained I had gotten a runaround for 2 years with this particular notary. There always was a document that was needed each time I was preparing to sign the trust. The lawyer explained to me that notaries in Mexico, even though they hold law degrees, do not represent the client’s best interests. They are more like government accountants. Within the hour, while we were meeting with the notary, my new lawyer had uncovered the mystery of the $20,000 fideicomiso fee. I had been told two years ago the architect’s appraised value of the house was $140,000. This was denied by the notary who showed us an appraised value on the documents of $50,000. The difference between $50,000 and the amount we said we had paid was almost $90,000 and we were going to have to pay the seller’s capital gains. The reasonable solution, as my lawyer suggested, was to reappraise the house at the $140,000 level.
After three trips to the architect, a week or more in time passing and of course a fee, it was reassessed back to the original appraisal. I was never able to find out why I was told one thing in 2008 and in 2010 it was completely different. I have never received a reasonable answer to most of my questions. The next hurdle was convincing one of my partners who has a Mexican passport to put the house in their name to avoid yearly bank fees and a 28% capital gains tax when the property is sold. The answer was negative, without any explanation for the refusal. A few days later I receive an email from the notary asking for my partners birthdays and home addresses. I suddenly began to question the person I had been working with for two years. I had been in town almost 5 weeks and he was still throwing curve balls, anything to keep us from getting title to the house.
It was November on the Pacific coast of Mexico, usually a popular destination for Europeans, backpackers, and surfers. This year there are predominantly only the expat homeowners who live here full time or come down to escape the winter. The state department has Mexico on its current travel warning site and the American newspapers have been extremely descriptive and sensational in reporting the drug wars. The restaurants are empty, the tourist shops are struggling and most hotel owners say it’s the worst season in ten years. Included in the bad economy, is the stagnant real estate market. This makes it almost impossible to sell our dream house even if we actually owned it.
I was sure that I would finally, after four years, be able to sign the house trust. My lawyer had told the notary that I was leaving December 10 so he would have the papers by December 15. He did not have the papers on the fifteenth and promised that by Friday or Saturday the17th or 18th, ojala*, it would be finished. Today is December 16. Taking a break from the computer, I had just jumped into the turquoise blue water in the pool in our non-gated community. Enjoying the solitude, having an empty pool to myself, my cell phone rang. Leaping out of the pool, I was sure it was the locksmith I had just called. It was my Mexican lawyer informing me that the notary could not get the fideicomiso done unless we had a current copy of the seller’s passport, the copy on file showing that his passport had expired in 2004. The seller had given us a copy of an outdated passport back in 2006. This was outrageous and my neighbor, who was as well one of my few friends in town, suggested our notary probably wanted a mordida, known to many as a bribe. When I mentioned this to the lawyer, she insisted that was not possible.
She, as well as the notary, sent a pleading email to the malevolent seller. I assured her that the odds were against us. My lawyer decided it was finally time to get a new notary. The amazing part of the story is that the notary keep the same polite, gracious expression even as we told him we were no longer using him and we wanted all the documents
The challenge now was to obtain a copy of the seller’s current passport. This guy who we shall call Mr. B, had refused to cooperate with us from the moment he left Mexico and had blocked my emails since 2006.. My lawyer, and my partner D. in the U.S. wrote an email to the seller Mr. B., explaining we needed a current copy of his passport to finish the transfer of the house.. We received an email from him “D, My passport was issued in 2004 and is valid until 2014. Good luck B. My partner emailed him back explaining again that we needed a valid passport copy. There was no response until my lawyer and I approached the other half of this real estate deal, the agent who sold us the house. She was charming and gracious as ever and agreed to write an email to B exactly as we dictated it and without spell check. The punch line of the message was “ if we don’t receive a current copy of your passport and a check for $10,000 to cover 13 years of fideicomiso payments and $3000 for your capital gains payment for the sale of your house, I will contact the IRS and report the sale of your house in Mexico and a copy of the agreement directing us to wire the money to your girl friend’s account in Colorado”. We received the passport copy the next day along with his rebuttal to our email accusing us of threats and blackmail. My lawyer tried to convince me not to dwell on the negative.
But the next day as I was packing for my flight, she called to tell me there was no way for me to sign the documents before I left Mexico since we were now missing
copies of the passports for the two sons of B who were beneficiaries on his
fideicomiso. Why weren’t they included in the request in 2009 when we asked for their powers of attorney. The new notary had spoken to the person at Bancomer handling all our documents. They informed her they had sent our previous notary over five weeks ago, the list of documents needed to finish the fideicomiso. The mystery for me is why this person who received 9000 ($750) pesos when he began the project, mislead and lied to us for two years. Was he being paid by B to keep us from having title to the house or was he one of the locals who resented the gringos who came with their large bank accounts and American ways. Or possibly this was the disorganized, corrupt Mexican legal system. We have emailed the sons of B, asking for their current identification.
The parting farewell news was the renewal of the lawsuit on all the land and houses, including the one we still don’t own, in our area.
P.S. we are waiting for the passport copies from the two sons and hopefully I , who hold the power of attorney for both sides, will finally sign the fideicomiso. To be updated
*(from the Arabic inshallah ..translated if god wills it.)
Threats and blackmail seem to be the only way to do business in Mexico. I have absolutely no desire to travel there, as I value having my head attached to my neck!