Caveat Emptor (Let the Buyer Beware) vs. Caveat Venditor (Let the Seller Beware) When Buying Real Estate in Mexico (March 2011)

by Enrique (Henry) Saldana

Caveat Emptor is Latin for "Let the buyer beware" and is a warning that notifies a buyer that the goods he or she is buying are "as is," or subject to all defects.

This rule is not designed to shield sellers who engage in fraud or bad faith dealing by making false or misleading representations about the quality or condition of a particular product. It merely summarizes the concept that a purchaser must examine, judge, and test a product considered for purchase himself or herself.

The modern trend in laws protecting consumers, however, has increased responsibilities placed upon the seller, and the doctrine of Caveat Venditor (Latin for "Let the seller beware") has become more prevalent. Generally there is a legal presumption that a seller makes certain warranties unless the buyer and the seller agree otherwise.

If both the buyer and the seller are negotiating from equal bargaining positions, however, the doctrine of caveat emptor would apply.

With regards to my last article, “Foreign National Investor's Important Information", I received an e-mail that was questioning the reason for my chosen topic, and further questioned a "hidden" agenda as to my reasons for publishing such an article.

And, although the e-mail did not surprise me, based on where it came from, it did appall me to think that as the general saying goes, we are, "trying to cover the sun with one finger," being that there is already a long history of problems in Mexico with regards to these type of cases, as per our previous article.

Not to mention, may I add, that the fact that there is no real estate regulatory entity for real estate practitioners, makes it very difficult for any individual not to feel uncomfortable at any given situation,when purchasing property in Mexico.

This, however, does not mean that every deal can go bad, or that you must constantly look to ensure that there is no negative fine print in the documents you sign in your real estate transaction that might affect you in the long run. It only means that you must practice the Caveat Emptor Doctrine, to ensure you have a smooth closing.

That should not be difficult or a complicated task when you hire the right real estate professional, and/or consultant that, regardless of the Caveat Emptor Doctrine, may somehow or somewhat practice the Caveat Venditor Doctrine, so as to protect your interest, as well.

Cases like the one described in the "Foreign National Investor's Important Information" article, are not just common to Mexico's real estate. I can recall one major case that took place in Florida by a Land Developer back in the late '70s. And, I am sure, if we do more research on the subject, we will find many similar cases throughout the world.

However, when cases like these "hit home," they ought to be dealt with in a conscious and professional manner, so as to avoid any generalizations and misrepresentations, which it is basically our aim.

And, for the record, here is another recent case, which has ended in a positive outcome:

In a Twist, Developer in Mexico Returns Deposits
by Kevin Brass

After two years of acrimony and suspicion, the developer of The Tides in Playa del Carmen, Mexico, has returned more than $13 million in deposits to buyers.

"It’s been a long road," said Adam Hebener, a Colorado banker who bought a penthouse in the oceanfront project.

The Kor Group also paid interest—8 percent for one year, 12 percent for the second year—to more than 100 clients who put down deposits. Most paid between $80,000 and $350,000 to hold units in the 209-unit development planned for downtown Playa del Carmen, the fast-growing town south of Cancun.

"None of it was easy," said Tripp DuBois, v.p. of sales and marketing for The Kor Group. "But it has a happy ending."

The resolution is a sharp contrast to the problems faced by buyers in other troubled projects around the world, including the much-publicized cancellation earlier this year of the Trump Ocean Resort Baja. At this point, buyers have apparently lost $32 million worth of deposits in the Baja California project, which had licensed the Trump name.

You may read the full article at:

So perhaps, instead of "trying to cover the sun with one finger," real estate practitioners in the area should try to be more objective and promote the Caveat Venditor Doctrine, instead of letting foreign clients find out down the road, that the Caveat Emptor Doctrine, has hit them in the face, and have them resort to litigation.

I, a real estate practitioner myself, can only say that if we must practice "Laissez-Faire" real estate in Mexico, let's do it in a way that advocates the practice of a Free Market System.

Feel free to contact us at:,

Tel: 984-147-0100 Cell: 984-111-8743.  Skype: Henrys1955.

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