Wednesday, July 18, 2012

Renewing Rent Contract 1: Civil Society, Rule of Law, and Personalismo

It is one thing to visit Mexico. It is another thing to read about Mexico. It is an altogether different kettle of fish to live in Mexicoup close and personal.

But that's what is happening to us right now. It's time to make new arrangements for rental of the apartment-condo where we've lived for the past year. The apartment suits us to a 'T': all the space we need and not an inch more. Plus, we love our garden-balcony and occasional view of the volcanoes.

Balcony Garden.
Yes—all this and intermittent views of two volcanoes!
In good faith, we wrote to inform the owner of our desire to remain in the apartment for another year. Her response shocked us. Rather than the increase equal to Mexico's inflation index (4.3% in June) specified in the rental contract, she wanted to increase our rent by 10%; moreover, she asked us to pay half of what she presented as an "insurance policy" on the apartmenta brand-new charge.

We responded by quoting the appropriate clause in the contract and calculating the new rental amount based on the increase of 4.3%. We also asked her to specify the cost of the "insurance policy".

Again, she surprised us. According to her, "the inflation index is the minimum the rent can be raised"...!  However, given that we've been such good tenants, she would agree to accept a 6% increase. We took very deep breaths.

In effect, the owner was telling us that she, not the contract, was in control of the rental amount, and she would raise the rent as she pleased. The oft-repeated Mexican dicho comes to mind: The law is respected, but not obeyed.

Like many interested in Mexico, we have read about the challenges the country faces in implementing the rule of law, but this transaction is bringing the issue home to us. Out of the goodness of the owner's heart, she would agree to a lower rental amount. She gave us the impression that the terms of the rental contract were nothing more than words on paper.... Our 'take' is that the amount is manageable this year, but what happens next year...and in the years to come? No, thank you, we said.

What's going on here?

We remembered that a year ago, "because you are foreigners", the owner had initiated all kinds of bureaucratic machinations to get guarantees that we would pay the rent. First, she wanted us to have a Mexican national, a resident of Mexico City, guarantee our contract. A good friend agreed, but the agency kept moving the goal posts: each time she submitted documentation, they asked for something else.

Finally, we said, "Ya basta!" (Enough!) and offered to pay the entire year's rent in a lump sum. At that, they said, "Oh, that's not necessaryif you'll agree to a two-month deposit, everything will be just fine."

Reed reminded me that people often attribute their own negative attributes to others; in this case, trustworthiness—or lack thereof. From what we now know, it seems the owner might have assumed that we would try to cheat her by not paying the rent, but she also made this assumption because she, herself, would try to cheat us.

Help!

Once a week, Sandra helps us with the apartment. Her husband is an accountant for a firm whose offices are in the building. Sandra also helps out Doña Carlota, our building administrator. Sandra introduced us to Álvaro, who laid down new kitchen tile when the old tile floor heaved and cracked.

Sandra is what sociologists call a 'gatekeeper'someone who has links to a variety of social networks and can activate them to bear on whatever issue arises. I mentioned to her that the owner wanted to raise the rent more than the contract permitted.

After rolling her eyes while commenting disdainfully, "She just wants the money," Sandra said that she knows a good lawyer; years ago, he helped her with a problem that her mother had. She offered to tell Doña Carlota the situation and suggested that I get the lawyer's name from Doña Carlota.

Every afternoon Doña Carlota sits in the lobby for a couple of hours; we tease her that she's holding 'office hours'.  So yesterday, I went down to speak with her. She knew exactly what I needed.

After stating emphatically, "The owner is entitled to percentage increase equal to the rate of inflation, but not a peso more," she told me that the lawyer is in our building, gave me his name and apartment number and told me she'd already spoken with him: he was expecting us.

Seeking Legal Advice

After making sure that we had all the documents, we rode down our elevator in Tower A, walked back to the Tower B elevator, rode up one floor, walked to the door and rang the bell. A nice young man, probably in his thirty's, answered the door and invited us in.

We explained the situation and showed him the documentsrental contract and email correspondence. After he'd read them, he asked if we were unhappy with the 6% offer. We explained that we were more concerned about establishing the precedent that gave the owner control over the annual increase.

We indicated that we are somewhat familiar with Mexican culture. We touched on differences between the U.S. and Mexican legal systems. Perhaps most significantly, he explained to us what might be going on with the owner.
"Unfortunately," he said, "when an owner gets a good tenant, they don't seem to know how to treat them; they abuse them by trying to cheat them as much as possible. You are foreigners, and she may think, 'Let's see what I can get out of them'.
"But it works both ways," he continued, "because tenants often don't paythey don't pay the rent; they don't pay the water or the gas. We have a tenant in this building who doesn't pay for parking. It's barbaroushe owes thousands of pesos." 
We believed him: the former tenant in our apartment had not paid utility bills, so when we tried to change the accounts to our name, we learned about the outstanding billswhich the owner, to her credit, paid promptly and without question.

On another level, it was difficult to believe our ears. Mexicans occasionally write that some Mexican practices are barbarous, but it is something else to hear a Mexican say it out loud, as a matter-of-fact.

Wait a Minute!

My mind races: barbarous—outside the city gates, outside civil society, uncivilized. I recall reading that the Spanish Crown was so threatened by 'civility' that when Spain conquered Italy, the Spanish governors systematically destroyed the civil society in Naples that had been the heart of that city's great trading empire.

The eighteenth century historian Anthony Genovesi saw public trust as the essential ingredient of a civil society, and he identified three aspects of this trust:
  • Ethical trust as an 'exchange of confidence' between persons and is the moral basis for all forms of public exchange;
  • Economic trust as 'the security that derives from the security of funds from which all loans are made'; and
  • Political trust as 'that which is born of the conventions and promises sustained by the civil law'.
"Nothing," Genovesi adds, "must be cultivated so zealously as public trust, for on that men rely, and it is that which generates confidence, which produces and sustains agreements between men, which is the base not only of commerce, but of all of civil society.
By attempting to reinterpret the rental contract in her favor, the owner not only tried to manipulate us, but she destroyed any basis for trust in our business relationship, which has now become defensive rather than mutually beneficial.

A Work in Progress: 'Civil Society' in Mexico Today

There is, of course, at least one other component to this story. We think back to our time in Pátzcuaro, where we benefited from being accepted into a network of good people—mostly teachers at CELEP, our Spanish school—who helped us with introductions and connections.

In Bureaucracy: The Labyrinths of Power, I wrote about how the Spanish Crown systematically prevented the development of any independent base of power in its colonies, including Mexico. In effect, Spanish colonial culture created a hostile environment—one where the Crown intentionally set one group against others. Hence, all social, economic and political activity was based on personal relationships—on who one knew, or could get introductions to, and on how much influence could be brought to bear on them.

Put differently, since 'civil society' was non-existent, the burden of survival and success fell squarely on individuals, on family groups, and on the networks they were capable of assembling. Anyone outside of one's own personal group was treated as a potential enemy or competitor—as someone to be taken advantage of or ignored altogether, depending on circumstances.

Labeled personalismo, this web of social relationships is often described as the foundation of Mexican society. Reflecting one aspect of personalismo, the apartment's owner has quite explicitly identified us as extranjeros, foreigners, to be taken advantage of; her idiosyncratic, personalized, interpretation of the rental contract is another facet of personalismo—as in, "The law is to be respected, but not obeyed.

But viewed from another perspective, we are also benefiting from increasingly being perceived as belonging to a building-related network of trusted relationships. Not insignificantly, when Sandra and other Mexicans have introduced a new person to us, she—and theyunfailingly use the phrase, "es de confianza," to let us know he is trustworthy.

The attorney's response when I asked about his fee explicitly reflects this attitude. Moving his hand side to side in the universal signal for 'negative', he said, "We are neighbors; there's no fee for this; she's trying to pull a fast one. If you have to go to the judge, then we'll talk about the fee."

Doña Carlota had clearly paved the way for us by telling the attorney, in effect, that we are neighbors de confianza—trustworthy.

Stay Tuned

The attorney helped us put together a plan based on our rights as tenants under the law. So long as our rent payments remain current, the owner is obligated to allow us to remain until August 1 of next year. At that time, if she wants us to leave, she is obligated to notify us as by July 1 of her intent to terminate the contract.
As the lawyer explained, "You have both rights and obligations under the contract—and so does the owner."
It's going to be very interesting to see how the owner responds to our insistence on compliance with the terms of the contract under rule of law. Stay tuned!

Still Curious?

Other Jenny's posts also touch on the theme of rule of law and bureaucracy in Mexico:

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