There are many issues you should consider if you are thinking of buying a timeshare in Mexico. For starters, even though Mexican law protects timeshare purchasers by providing a right to cancel a timeshare contract, it may be difficult to enforce this right. Additionally, timeshare scams abound in Mexico and you should take steps to avoid becoming a victim.
Read on to learn more about your rights if you purchase a timeshare in Mexico and find out about common Mexico timeshare scams and tips on how to avoid them. (Learn more about issues to consider if you’re buying a timeshare in a foreign country.)
In Mexico, foreigners are restricted from owning land within 50 kilometers of the coast or 100 kilometers of an international border. Since the majority of timeshares are in beach resorts (in places such as Mazatlan, Los Cabos, Cancun, Cozumel, and Puerto Vallarta), this means that in most cases when you buy a timeshare in Mexico you are only purchasing a right to use the timeshare, rather than an interest in the real estate. (This is different than in the United States where there are two main types of timeshare interests -- deeded and right-to-use. Learn more about the different types of timeshare interests in the U.S.)
Generally, with Mexican timeshares you will receive the right to use one or more units for a specific number of weeks, during a certain number of years. You will have to pay an initial purchase price and periodic maintenance fees, which are likely to go up each year.
If you purchase a timeshare in Mexico, U.S. laws do not apply to the transaction. So, even if your home state strictly regulates timeshare sales, those state laws do not apply to you when you purchase a timeshare in Mexico. (Learn more about the timeshare laws in your state.) Instead, you'll be subject to Mexican law.
By law, in Mexico you have five business days to cancel a timeshare contract after you have signed it. The sooner you act, the better.
The right to cancel cannot be waived. If you try to cancel, the timeshare salespeople may tell you that you waived this right when you signed the contract. This is not true. Mexican law stipulates that purchasers are legally entitled to cancel a timeshare contract without penalty.
To cancel the contract, notify the developer in writing. It is also a good idea to send notification by email, as well as in person, if possible. Be sure to:
The timeshare developer must refund of all the money you have paid, without any cancelling penalties, within 15 business days. Often though, timeshare developers in Mexico are very reluctant to give you a refund. If the developer stalls or refuses to give you a refund, you can file a formal complaint against the company with PROFECO.
The Procuraduría Federal del Consumidor (Office of the Federal Prosecutor for the Consumer), known as PROFECO, is the consumer protection agency designed to protect consumers against abuses or fraud by companies operating in Mexico. If you are having a dispute with a timeshare developer in Mexico, you may contact “PROFECO” by email at firstname.lastname@example.org or by telephone to file a formal complaint.
Timeshare developers often hire aggressive salespeople and thousands of foreigners have fallen for the tricky sales tactics used by numerous timeshare companies in Mexico. If you are thinking of attending a timeshare presentation or purchasing a timeshare in Mexico, it’s important to learn about how to avoid becoming the victim of a timeshare scam.
If someone approaches you during your vacation and invites you to a free breakfast or a free stay at a resort, beware. He or she is probably intending to sell you a timeshare. Mexican law prohibits timeshare salespeople from offering gifts, free vacation certificates, or any other promotion strategies without informing the consumer of the specific purpose of the offer, but this doesn’t stop salespeople from using this tactic.
If the salesperson only shows you a brochure of the timeshare property, but not the property itself, run away from the deal. There is very likely some problem with the resort. It is probably a dump or maybe it hasn’t even been built yet. You need to visit the resort and the developer’s office before you even considering purchasing a timeshare.
Do not sign a contract when you first meet with a timeshare salesperson. Take the documents with you when you leave the meeting so you can spend some time reading the fine print. You may want to review the contract and documents with an attorney.
Certainly don’t sign any documents that are only in Spanish. Even if you are fluent in the language, you may not understand all the legal terminology. If the timeshare salesperson has provided you with a "translation" of the contract, it may not be correct or accurate, so get it translated elsewhere.
Before you purchase a timeshare at a particular resort, run a Google search to find out more about the company that you’re dealing with. Timeshare owners who have previously been scammed often post their experiences and warnings about scammers online.
You can also check for complaints about the resort developer at any PROFECO office.
If certain promises were made during the sales presentation, make sure those promises are covered in the contract.
Since most timeshares in Mexico are right-to-use, if you default on payments you won’t face a foreclosure. However, the resort could report the delinquency to credit agencies, sue you for the past-due amounts, or turn the debt over to a collection agency.
If you’re having difficulty making your timeshare payments or just want to be relieved of your timeshare obligation, see Nolo’s article Options to Avoid a Timeshare Foreclosure to learn about different ways to dispose of a timeshare.
If you are thinking of purchasing a timeshare in Mexico (or have already done so) it is highly recommended that you hire competent Mexican legal counsel who can advise you of your rights and responsibilities in the transaction.