Buying an occupied apartment in Mexico

In Mexico there's a growing supply of apartments sold with occupants: sometimes tenants with valid contracts, sometimes occupants without legal title. Buying a property in these conditions can yield 20% to 45% discounts off market price, but it requires understanding what type of occupant is there, how long it can take to vacate and what associated costs exist.

Types of occupancy

Tenant with valid contract

There's a signed lease, possibly registered with an agency. The property is sold with the obligation to honor the term.

Tenant with expired contract

The contract ended and the tenant is still in the property. There may be a rent extension by law or conversion into an indefinite-term lease, depending on the state civil code.

Occupant without contract (precarista)

Lives in the property without legal title. Could be a relative of the former owner, a caretaker or someone who simply moved in.

Irregular occupants ("paracaidistas")

People who entered without permission and refuse to leave. The most complicated case and usually requires a full civil lawsuit.

Basic legal framework

The state Civil Code and Code of Civil Procedure govern the proceedings. In CDMX and Estado de México:

• The special eviction-for-contract-expiration lawsuit lets you recover possession when the contract has ended.
• Rescission for non-payment proceeds after 2 to 3 unpaid months.
• For occupants without contract, the reivindicatory action or the plenary possession action is used.

Why the discount makes sense

• The buyer takes on the cost of time and fees to vacate.
• There is legal uncertainty about the duration of the proceeding.
• During occupancy, the property can't be used or rented.
• There is a risk of damage to the property while the eviction is executed.

Investigation before buying

Documentary

• Request the deed and lien-free certificate from the RPP.
• Request the current lease, payment receipts and any prior award or judgment.
• Verify the property has no active litigation.

On-site

• Find out who lives there and since when.
• Check whether there are minors, seniors or people with disabilities (they affect eviction duration).
• Estimate visible damage and repair costs.

Financial

• Overdue property tax.
• Overdue HOA fees.
• Disconnected services or informally reconnected ones.

Step-by-step procedure to recover possession

1. Sale with clear clauses

The deed must indicate the property is sold occupied and that the buyer assumes the risks. The seller should declare under oath not having entered into undisclosed subsequent contracts.

2. Notice to the occupant

Once you record the deed, formally notify the occupant of the change of owner and, if applicable, the contract subrogation.

3. Legal procedure

• Tenant with valid contract: respect the term and, upon expiration, give 30 to 60 days' notice of non-renewal.
• Tenant in arrears: file rescission lawsuit for non-payment.
• Occupant without title: reivindicatory or eviction lawsuit per the local code.

4. Judgment and removal

If the judge orders eviction, it's executed with police assistance. Real timelines in CDMX and other big cities range between 6 and 18 months.

Example: apartment in Estado de México

• Free market value: $1,800,000 MXN.
• Agreed price with occupant discount: $1,250,000.
• Attorney fees: $80,000.
• Estimated process cost (overdue property tax, maintenance, court expenses): $90,000.
• Estimated time to recover possession: 12 months.
• Lost rent during process: $180,000 (at $15,000 monthly).

Total cost: ≈ $1,600,000 MXN, with market value of $1,800,000. The profit depends heavily on actual time and final damage.

Typical risks

• Underestimating the process time.
• Finding occupants with sentimental ties to the former owner.
• Deliberate damage to the property during the process.
• Discovering old contracts not declared at signing.
• HOA fees or fines that appear along the way.

How to protect yourself

• Work with a litigator experienced in rentals.
• Set a conditional price: part at closing, the rest against physical handover.
• Negotiate with the occupant: sometimes an economic settlement to vacate voluntarily makes sense (saves time and money).
• Verify the property isn't registered with a tenants' association or state housing-protection programs.

When buying occupied isn't worth it

• When the discount doesn't compensate for risk and time.
• When the occupant has special legal coverage (vulnerable persons, proceedings on hold for humanitarian reasons).
• When the property is part of a pending succession or divorce litigation.
• When the condominium administration blocks modifications or charges.

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