BajaNomad - Rent/Lease payments

Rent/Lease payments

Santiago - 10-9-2008 at 06:44 PM

Not that I really give a hoot but I ran across a statement in Rolly's website that stunned me: he claims that it is Mexican law that all rent/lease payments are to be in pesos. He further says it is a crime to pay in anything other than pesos and a crime to require payment in anything other than pesos.
I'ld guess that very few of us make our payments in anything other than Dollars or Loonies.
what say you?

shari - 10-9-2008 at 06:50 PM

Hmmm.dont know about crime details but I think it is a very good idea because once a guy quoted a price in dollars on a lot we wanted to buy andthe way it worked out...when we finally decided to buy it and pay for it, it cost us quite a bit more money than we thought due to dollar fluctuations...at least if its in pesos, there is no price variation...makes sense to me. (we paid him in pesos but he wanted the equivalent to dollars!!! rally silly because he is mexican and juan is mexican so why the hell did he want the price in dollars...wish I'd have known this law then)

bajabound2005 - 10-9-2008 at 08:09 PM

we give our landlord a check drawn on a US bank is USD -- annually. In fact, the lease states dollars.

[Edited on 10-10-2008 by bajabound2005]

LOSARIPES - 10-10-2008 at 03:20 AM

The payment in pesos law dates back to the revolution days. The intention was to protect the locals from the rich landlords who hired them by the herds and paid them with goods and food in general at their general store thus keeping them eternally in debt since they controlled the food prices.

The law also made it a point that the workers would be paid in cash and only cash. No checks, chicken, chips or beads, for the same reasons above.

All WORK payments therefore, were to be paid in Mexican pesos. I don't know if the law has been changed but if it hasn't, there is very little interest to enforce it since it would work against local's interest. (peso devaluation)

In present times, lots of business transactions are contracted in foreign currencies, specially those involving international trade/services/goods...and it has become common practice to do so. The nature of the business may necessitate to use such currency..... but a home lease..?? don't know. That may just be advantageous for the landlords.

The thing to do is never sign a contract that binds you to pay in US Dlls. unless you want to.... or have no choice.

I used to hire services for a US company operating in Mexico. We signed "agreements" with private parties. Prices were quoted in Dlls. We paid in pesos at the rate of exchange of the pay date. Everybody was happy but the advantage was on the payee side since the peso rarely re-valued. The Mex. Gov however, quoted prices in pesos and payments were made in pesos accordingly. The Mexican gov. never used currency other than pesos, perhaps because of the "pesos only law"

So, my take and experience is yes, contracts can be made in any currency the parties agree upon but payment can be in pesos and the payee can not refuse the currency. That is why the Banco de Mexico issues an official rate of exchange.

Bottom line: You must pay what you sign for.

Osprey - 10-10-2008 at 09:28 AM

When I bought my Mexican house I signed an agreement to pay the balance owed in two years, in pesos. When it came time to pay, the peso had lost much of it's value. The realtor, my family, the bankers urged me to pay as agreed but I paid in dollars -- the seller wound up with about $4,500 dollars more than the agreement but I paid out no more than the $25,000 I expected to pay. I did not want to begin life in a little Mexican fishing village knowing I had taken advantage of a lady who could barely sign her name.

Udo - 10-10-2008 at 09:35 AM

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Originally posted by Osprey
When I bought my Mexican house I signed an agreement to pay the balance owed in two years, in pesos. When it came time to pay, the peso had lost much of it's value. The realtor, my family, the bankers urged me to pay as agreed but I paid in dollars -- the seller wound up with about $4,500 dollars more than the agreement but I paid out no more than the $25,000 I expected to pay. I did not want to begin life in a little Mexican fishing village knowing I had taken advantage of a lady who could barely sign her name.

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Extremely honorable of you, George.

It was...About three years ago

Dave - 10-10-2008 at 01:49 PM

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Originally posted by LOSARIPES
I don't know if the law has been changed but if it hasn't, there is very little interest to enforce it since it would work against local's interest. (peso devaluation)

But to be legal the particulars must be stated in a contract.

tjBill - 10-10-2008 at 09:31 PM

Most people I know in Tijuana pay their rent in dollars. My lease states dollars and I pay in cash.

Santiago - 10-11-2008 at 10:39 AM

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Originally posted by Dave

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But to be legal the particulars must be stated in a contract.

Dave: if I understand you correctly the payment can be in anything the leasee and leasor agree to, as long as it is in writting. If the contract only says something like "payment is $1000 per month" then the asumption is pesos??? It would have to say "payment is $1000US per month" to indicate dollars. Do I have this right?
Thanks

TonyC - 10-13-2008 at 07:00 AM

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Very cool. A person like yourself gives, because it was the right thing to do. Nice to know there are people like you out there.

CaboRon - 10-13-2008 at 08:21 AM

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Originally posted by Santiago

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Originally posted by Dave

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But to be legal the particulars must be stated in a contract.

After consulting my lawyer it is his understanding that for a contract to be legal and binding in Mexico it has to be written in Spanish and the Peso is the only currency that can be used in the contract ....

Caboron