Imagine you buy a home in Mexico, you move in, you decorate it and make adjustments, and you plan to live there happily ever after. Suddenly you receive a notification from a judge saying that the title over your house is not valid because another person has paramount title over yours and that you have to vacate the property immediately or you will be evicted. If this occurs, you would have to go to court to defend your title, and chances are you can still lose this litigation process. However, Mexican law provides an indemnity for the buyer in case this awful scenario occurs.
So what remedies do I have if I am dispossessed of my property because of a paramount title?
If the seller acted in good faith when he sold you the property (meaning he didn’t know someone else had better rights over the property), you are entitled to claim from the seller the price you paid for your property, the expenses you incurred when you purchased the property (fees, taxes and so on), the expenses you incurred due to the litigation process regarding the paramount title, and the value of useful and necessary improvements you may have done to the property.
And what If the seller acted in bad faith knowing there was a paramount title?
Then in addition to the remedies mentioned above you are entitled to claim the updated price of your property, the value of voluntary and comfort improvements you may have done to the property, and damages and losses.
It is extremely important that the deed where you acquire title over your property includes a clause where the seller is expressively obligated to respond from any paramount title and deprivation of property. The wording of this clause should be very precise so that this responsibility is not limited in any form. Including that wording in your purchase deed will not protect you from dispossession due to a paramount title, but if this happens at least you will have a way to get some of your investment back.
