The legal system in Mexico has come a long way. The fact remains that it takes a long time to get most things settled through the court system. Therefore, it is important to take steps to protect yourself from the beginning, and this is the main purpose of a promissory contract.
When is it created?
After the developer or the seller accept your offer to purchase, the next step is to create the promissory contract. If your offer document was detailed, it is a great framework for preparing your new document that will bridge the time between your offer and signing your title deed.
Typically, the buyer is responsible for generating this document. However, in pre-construction, the developer usually has a template of a contract and will generate one for the transaction. In this case, your legal representative will verify the document rather than create it.
What should be in my promissory contract?
The contract should include:
- The legal description of the property and all individuals involved. If purchasing from a corporation, it should also include the legal description of the representative and proof of their right to sign on behalf of the corporation.
- A listing of all payments – the amount, the date or construction milestone, and how you will make the payment. Also, account and transfer information should be in the document.
- Specific dates for the physical and legal delivery are not usually listed. However, limits or deadlines are very important.
- A listing of any penalties will be included for the first time. Your legal representative should help to make sure that the penalties are reasonable and fairly distributed.
A contract for a resale should include an inventory of all items included as well as any items that the owner will exclude. If there are items that need repair and whether the owner will or will not repair as part of the sale should be noted. We also recommend including a list or video inventory as appendices to the contract.
If you are purchasing a pre-construction unit, this document is of utmost importance. It acts as proof of ownership through the construction process and the period necessary to prepare and file all documents registering the completed property. Depending on the size of the community, the percentage completion of the development when you purchased, and the amount of time required for the municipality to complete the process, it may be possible to title the property when you take possession, or there may be a significant delay between taking possession of the property and signing the title deed.
In pre-construction, the involvement of the municipality can drastically delay the processing of paperwork. Elections, transfer of political parties, and economic cutbacks are a regular occurrence that affects the efficiency of the bureaucratic steps. Construction details, floor plans, a list of materials, and photos, if possible, are helpful and should be included in the contract as appendices.
Why is it important?
In the event things are not progressing as either party expects, a well-written contract can settle most issues without further legal actions. If issues cannot be resolved through mediation and legal proceedings are necessary, the promissory contract will be the guide. It is money well spent to have a reliable real estate attorney help you to ensure that this document adequately protects you.