A surge in real estate fraud has turned Tulum into a hotspot for unscrupulous activities, leaving many investors ensnared in a web of legal uncertainties. The unregulated, rapid growth of the municipality has created an environment ripe for fraud.
The Core Issue
Carlos Alberto Montegil, vice president of the Mexican Association of the Real Estate Industry (AMII) and team leader of INMO Investment in Tulum, highlighted the gravity of the situation. “In 2023, I encountered numerous apartments that couldn’t be sold due to a lack of legal certainty. Essential documents were missing, they weren’t registered, or they lacked a definitive title of ownership,” Montegil explained.
The uncontrolled real estate boom has led the municipality to issue more permits than its infrastructure can support, resulting in an imbalance in basic services. “Permits were granted beyond the capacity of our infrastructure, creating chaos while developers continued unchecked,” Montegil added.
The Fraud Mechanism
The absence of effective regulation has enabled dishonest companies to sell land and apartments without proper documentation, leaving buyers vulnerable. Montegil advises verifying the legal status of any property before purchasing. “It’s crucial to hire a specialized lawyer for property investigation and a real estate advisor registered with Sedetus,” he emphasized.
Fraudulent activities typically follow the same pattern: selling developments without deeds, selling the same land multiple times to different buyers, or properties with registration irregularities. “Some purchase-sale contracts are unfairly designed to favor developers,” Montegil noted.
Authorities’ Inaction
Despite numerous complaints, authorities have failed to curb this wave of scams, tarnishing Tulum’s reputation. The impunity enjoyed by some business operators reflects the weakness of the municipal regulatory system and the lack of effective state intervention.
Continuing Threat
While Tulum’s real estate market continues to attract both national and international investors, fraud remains a significant threat. The lack of legal certainty, the oversupply of irregular developments, and the government’s failure to enforce laws have turned this paradise into a trap for unsuspecting buyers.
Source: Por Esto
