Renting Your Mexican
Before we start, if you haven't read the first page of the series with the definitions, please do that now.
In this chapter we'll talk about:
The lease and rental laws:
Leasing and rental laws are largely left up to the states, so there will be some variations from state to state, but these general guidelines will apply in most places. Before entering into a long-term or expensive lease, you should seek the advice of a lawyer. One important point to remember: If a lease, or other contract, contains illegal clauses, the illegal clauses are not valid nor enforcable. More about that in the next section.
Leases are available in two forms:
A lease of unspecified length which is basically a month-to-month written agreement which may be terminated by either party on 15 days notice.
A conventional lease has a minimum duration of one year and a maximum of 10 years. This lease can be terminated early only by mutual agreement.
A simple short-term rental for a place to live while you search for your final place, can be a simple handshake without a lease or a lawyer. A more cautious approach would be to get a standard lease form from a papelería (stationary store), again without a lawyer. For a long-term lease, a lawyer and a custom lease may be wise. More about that in the Personal Experiences section below.
Rent is payable in pesos. A lease clause requiring payment in some other currency is invalid. It is not uncommon for landlords to want payment in dollars, especially in tourist areas. Sometimes this is a tax avoidance scam which, in theory, could come back to haunt the renter for participating by paying in dollars.
It is customary to pay a security deposit, usually equal to one month's rent. Leases usually contain a clause saying this deposit cannot be applied to the last month's rent. Common experience says it is unlikely you will ever recover this deposit, or if you do get it back, it may be up to a year later. Unlike common practice in the USA, Mexican leases usually do not require a last's month rent deposit. Rent is payable in advance each month.
The law limits rent increases to 10% per year on long-term leases. For a one year lease, the lease should stipulate limits on a rent increase at renewal time. The rent cannot be increased during the year.
Your lawyer should know if there are restrictions on the amount of rent that can be charged, and if there are any other local or state requirements which you should be aware of.
Rental laws are generally very pro-tenant making it very difficult for a landlord to evict a tenant, even for cause. Many landlords are happy to rent to foreigners in the hope that they will not know the law and that be more easily manipulated. In the horror story on the previous page, the landlord raised the rent by 25% after 6 months although the law allows only a 10% increase each year. He also evicted the tenants. If they had wanted to fight it, they could have stayed for a long time while he went to court to get them out -- perhaps as long as a year.
Things to watch out for:
Payments: We've already warned about landlords who want to be paid in dollars. Only pesos are legal for rent.
Repairs: The landlord is responsible of any repairs (except damages caused by the tenant). It is not legal to require the tenant to pay part of these expense. Some landlords try to insert a clause into the lease requiring the tenant to pay the first xx pesos of a repair. This is not legal, thus not enforceable.
Utilities: Often the water, power, telephone and cable TV services will be in the name of the landlord. Occasionally these are included in the rent, but more commonly the tenant is expected to pay the bills or reimburse the landlord for these expenses. This is legal. You should pay the bills yourself rather than reimbursing the landlord. That way you know the bill has been paid, and you know you are paying only for your utilities. If the services were in the name of the last tenant who left an unpaid balance, you may have a big chore avoiding paying the past due amounts. For a short-term rental, it is better to have these services in the landlord's name. For a long-term commitment, it may be better to have these in your name. As a rule, these service providers do not make it easy to change an account to your name.
Inspect the property carefully. Under the law, the owner or real estate agent has no obligation to tell you about defects. Check all of the water faucets to be sure they work. Flush the toilet, twice. Shake the toilet to be sure it is properly bolted to the floor. How many power circuits are there? Only one or two is common. Will that be enough to power all your electronics? If there is a water heater, does it work? If there is no heater, are there connections for one? Is there a hookup for a washing machine? If there are appliances (stove, fridge, air conditioning), do they work?
How did you find your rental?
We were looking up and down Pátzcuaro Centro, but not finding anything satisfactory in our price range. There was one decent, semi-furnished duplex apartment at Departementos Vicky, also better known as Gringo Hill. It was $350 USD a month, and slated to rise the following year.
Meanwhile, a longer established old expat, "M", said to me, "Why don't you come out and have a look where I live?. My landlords (good people) have a couple of houses available to rent."
So we did, driving the 10 miles out from Pátzcuaro to this beautiful valley and mountain vistas.
The first house was a little ranch style, 1 bedroom house. We didn't like it because none of the rooms connected inside. For example, if you had to get up in the night to pee, you had to go out on the porch, do it into the garden, or walk a few yards to the baño. It was also very close to a mucky cow corral. Rent: $1500 pesos a month.
The other house is situated on a large lot, at the end of the paved street, above and more distant from the cow lot. It wasn't very attractive from the outside; a drab, white, flat-roofed concrete structure. But inside, it was beautiful. Two bedrooms, full bath; enclosed garage with a tiled floor, with services for a laundry; big living room/dinning room, GREAT KITCHEN!!!! Rent: $3000 pesos a month
The rent has stayed the same at last year's renewal, and we expect it to stay the same when we renew this year. I was very pleased last year that when we started to develop a few roof leaks, the owners contracted an albañil to build a new, traditional tile roof over the old concrete slab, painted the exterior of the house, and never charged us a centavo for it. We think we are extremely fortunate to have such good landlords.
How long were you looking?
About two months.
Where did you live while you were looking?
We were house sitting a large, old house for an old acquaintance from back home, down on the highway, 150 feet from the RR tracks. (Whoooooo. Whooooooo Whoooooooo!!!!)
We were there from April, 2006 to August 2006. Rent was "free", but maintenance was costly as was electricity, as an adjoining neighbor was allegedly stealing power. Other problems, as well. Ceiling leaks, possums in the ceiling crawlspace, etc.
The first place we lived in was a 2 bedroom wooden cabin, furnished, owned by an American couple. It was a nice, upland woodsy setting, but there was lots of dust due to the unpaved road right behind our bedroom window, security was next to nil (nothing ever went missing, I'll say that.) Worst of all, it was nearly impossible to stay warm. It was $350 USD a month, utilities included and was convenient for a fast move-in soon after we arrived in the area. I read about it on the MoreliaConnect Yahoo Group. We acted on it immediately, went to see it, talked with the owners, and rented it within 3 or 4 days.
Was moving a hassle?
Moving from NOB was a major, stressful hassle. We pulled a 12x6 ft cargo trailer with a Ford Windstar. Forget it! That's an epic tale in itself. Moving from the icy cabin to the house-sitting gig was fairly easy. Moving from the house-sitting gig to our present home was very easy. Of course, we had to shop for appliances, stove, fridge, etc and a bed, as we hadn't brought any. We did have numerous household furnishings, especially cookware, lamps, bedding, etc.
Do you have a formal lease?
Yes. The actual owners of the house are a couple living in San José, California. She's a younger daughter of our neighbor landlords. She and her husband are both from here. The daughter wanted a formal contract, with Notario supervision, as they apparently had had a less than satisfactory tenant previously. We and Señora C (the Mamá) went to a Notario and had reams of turgid legalese and paperwork to wade through. It cost her around $500 pesos. After, she said that next time, we'd just get a standard form from a papelería.
We have a very good relationship with our landlords. We visited the daughter and her husband in San Jose when we were there last summer. The brother-in-law and family, here for a visit, are coming over here a ratito for café, chocolate y postre. Nice folks.
Was negotiating with the owner a good experience?
Yes. The only negotiating necessary was giving her the rent for July even though we couldn't move in until early August. That was to "hold" the place for us, as some other expats were getting interested. She told us we could start moving our things in immediately (that was late June) but I preferred to wait until July 1st, for which we'd actually paid.
Later, other Americans came and rented the other two casitas at least part time. They are good friends. We are also very friendly with the people of the ranchería, although not on as intimate terms as our American nomadic friends.
Anything else that might be helpful to a newbie?
In our case, we needed to go the La Presidencia of our Municipio in order to get a declaration from el Presidente indicating where we lived. That was needed for INM as our landlady paid the power bills and we pay her, so our names are not on the comprobantes. This declaration was also useful in setting up a Banamex account, although to this day, our statements of account come very sporadically if at all. Probably few, if any other expats would encounter a similar situation, but the point is to be flexible, creative, and patient in working out any snags. Don't get frustrated.