Renovations in Mexico, Protect Your Real Estate Investment with a Legal Contract

If you plan on renovating or building a new home in Mexico, you need a legal contract between you and the contractor. As in any country, you would not hand over the money and trust someone with such a large investment. Entering into a legal contract with your contractor will protect you and your property from budget overruns, fraud, and litigation.  

Living in Mexico you may notice that prices and quotes change, and mañana may not mean tomorrow, home construction can be one of the most stressful events in your life, you need to know you can rely on your contractor to get the job done professionally and as soon as possible.

Have a lawyer in Mexico prepare a contract between you and the contractor before you begin construction.

Just a Few Important Points to Include in a Professional Services Contract:

• Both parties enter into the contract with the legal faculties and ability to perform the tasks, and the owner has the legal authority and ability to offer the project.
• Specific details regarding the project, the cost, the materials and of course the timeframe. The project’s start date and the delivery date, include any penalties if the project is not delivered on time.
• How will you deal with project delays? This will depend on whether the delays are caused by either party, unforeseen defects in the existing construction or due to an act of God.
• Define the work schedule, how many days a week and hours the crew is expected to be on site.
• Payment schedule, the property owner should never pay in full before the job is complete, yet the contractor will require installments during the project for his salary, employees and purchase materials. The lawyer will draw up a payment schedule to satisfy both parties.
• Regarding subcontracting, you may specify the contractor may not hire subcontractors without the owner’s approval.
• Employer – Employee Relationship, the contractor, and the client are solely independent parties bound; consequently, there is no employer-employee relationship between them.
• It should be made clear; the contractor is the employer of his crew, he is responsible for paying the employee’s Social Security. The labor laws are very strict in Mexico, and as the property owner, you need to protect your property against any issues the contractor may have with his employees. The contractor is responsible for all individual or collective claims made by the employees. Protect your investment by ensuring disgruntled employees can not include you or your home in a legal dispute.
• Building permits and strict adherence to the norms, rules and valid legal provisions of Quintana Roo, Jalisco or Nayarit depending on your state.  
• Penalties involved if either party decides to terminate the contract.
• Warranty, be sure to include a construction warranty in the contract.

Remember the contract will be executed simultaneously in both Spanish and English versions, and both shall constitute the same document, but nevertheless in the event of doubt in its correct interpretation, the Spanish version shall prevail. Understand what you are signing by hiring a bilingual Lawyer.

For more information on how to protect your investment during construction or renovations contact the MEXLAW legal team.