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Monday, November 6, 2000

Be careful buying home in Mexico

Diana Washington Valdez
El Paso Times

The recent case of U.S. citizens and other expatriates losing their homes on Ensenada Bay in Baja California ought to serve as a warning that it can be risky to buy real estate in foreign countries.

United States Embassy officials in Mexico apparently were unable to help the U.S. retirees who were ordered evicted from their homes in the Baja Beach & Tennis Club. According to the Associated Press, Mexico's high court decided that although the Americans likely were tricked into building homes on disputed property, they don't have a right to remain in those homes.

The case affects 23 houses and calls into question the legal status of 500 to 600 residents on the Lengueta Arenosa sand pit. Many of these people are retirees who invested their life savings.

Regardless of how the Americans were misled into building houses on the land, the incident will not sit well with foreigners who already may be skittish about investing in Mexico.

Research law, owners

El Pasoan Rose O'Hara said she has a relative who is interested in retiring in Guadalajara, but the Ensenada incident has made her hesitate. "She's not going to do it if she's going to lose her only home down there," she said.

Guadalajara has a significant expatriate community, and some of the longtime American residents can share experiences. Information about Guadalajara can be found on the Internet (www.mexweb.com).

Like buying real estate in any place, especially in foreign countries, it's important to know in advance about rules and restrictions involving foreign property ownership.

Experts advise consulting with a reputable real estate lawyer to determine whether the potential buyer can legally own the property, and whether the property has a clear title -- can be sold.

In the Ensenada case, the property's ownership was in dispute, a fact that should have alerted homeowners.

This holds true whether the real estate is in Juárez or Mexico City.

Watch for ejidos

The disputed property in Baja California dated back to a 1973 land grant, or ejido. The Mexican supreme court ruled that agrarian reform officials took away 45 acres from the legal owners, and granted the property to others who eventually allowed the Americans to build homes there.

Jorge Vargas, a professor at the University of San Diego School of Law, told the Los Angeles Times that "Ejidos are in a legal state of flux, so it's very risky for anyone to invest in one."

Does having Mexican nationality help? Being a dual national might help, in some cases. However, check with your nearest Mexican consul's office on how this works.

The consul's office can't do a title search, but it can provide general legal information.

For details, it's best to consult a lawyer.