In few words, the owner of the condo we rent blindsided us by asking for a 10% rent increase when the contract stipulates a 4.3% increase, tied to Mexico's inflation index. When we reminded her of the contract, she authoritatively explained that the 4.3% is the minimum increase. In over our head, we explained the situation and our concerns to Carlotta, the building's administrator, who referred us to a lawyer.
We felt we had no choice but to look for another apartment and spent last Sunday doing so. It was not a happy experience. The truth is: we love where we are—our building and the pueblo-like atmosphere of the neighborhood. Colonia Parque San Andrés is a special enclave in a huge city.
We walk to our local mercado (fruits, vegetables, chicken, plastics, flowers, stationary supplies!), to the bank, to nearby restaurants and small shops. We are reasonable taxi rides away from Mexico City's historic downtown and from the airport. The apartment is just right for us. We have no desire to move.
In desperation, we called the Century 21 agent who had brokered the original rental agreement. Before she arrived, we paid a visit to Don Rigoberto, who owns the laundry where we take our clothes.
What a happy idea! It turns out that Don Rigoberto is also a landlord. In addition to the laundry at the front of his spacious home, he also owns two rental properties: a house in Cuernavaca and an apartment down the street.
His explanation of the rental facts of life was not just useful, but illuminating. In a nutshell, he told us:
"The owner is just negotiating. I do it, too, but I listen to my tenant. In Cuernavaca, she is a friend of my daughter. She told me she can't pay a lot. I'm happy to have her, because she takes good care of my house, and that is important to me.
"It isn't easy to get good tenants. The tenant in my apartment here in Coyoacán ran up a 20,000 peso (roughly US$1,500) water bill that I had to pay, and I can't get rid of her."He gave us our negotiating points, which was extremely useful. It told us how people of Mexico think about the issue which, honestly, is how business people anywhere would think about it:
- Tell her that you do not agree with her arbitrariedad, arbitrariness, including lack of fairness; it was so important to Don Rigoberto that we understand this word that he insisted I write it down and even checked my spelling;
- Tell her: We are good tenants; we pay on time and take good care of your apartment;
- Tell her: We painted the apartment out of our pocket;
- Tell her: If we leave, you are going to lose two or three months rent to get another tenant, who may not be as good as we are;
- Ask her: Why do you want to risk losing two or three months rent over 150 pesos (about US$12)?
Fresh from our conversation with Don Rigoberto, we met with Josefina, the agent. We thought we were meeting to discuss how to go about finding a new apartment, but naturally we brought her up to date on the owner's refusal to acknowledge the contract. We also gave Josefina a tour of the apartment, pointing out improvements we'd made: freshly painted throughout, newly re-tiled kitchen floor to fix cracked tiles, new bathroom faucets, dimmer switches for ceiling lights.
Her reply was clear:
"Ten percent is too much; even six percent is too much; the law is 4%. Let me call the fianza to see what's going on."It is our understanding that fianza is a company that insures rental contracts; in essence, guaranteeing that the owner will receive the rental amount even if we stop paying. Josefina put her mobil on speaker, so we were able to hear the conversation; we understood most of it. From the opening greetings, which were warmly familiar, it was obvious that her relationship with this company is longstanding and ongoing.
When Josefina explained what the owner wanted, we heard the person on the other end object, "Oh, that's too much!" I have to say, her response was music to our ears. Could it be that the rule of law might prevail?
The administrator said she would speak to the lawyer and get back to Josefina, which she did in less than five minutes. The bottom line:
"The owner has agreed to the 4.3% increase, and the afianza lawyer has spoken with your lawyer about the contract."
Josefina also said that she would call the owner: "The owner doesn't want you to leave. I will call her tonight. Don't be distressed. Everything is going to be all right."
We told Josefina that we would be happy to pay her for her help: "Oh, no, the owner will pay, if it comes to that."
The next day we were able to meet with our lawyer, who confirmed what Josefina had said. I won't dwell on the fact that he hadn't thought it important to inform us of the conversation he'd had with the afianza attorney, at which time he'd asked her to send the contract both to my email and to his.
Taking Stock
Reed's 'take' made me laugh:
"The owner is a real loose cannon, but 'the system' has effectively corralled her: her own insurance company is setting limits, as is her own real estate broker, our lawyer, and the building administrator [who had backed us by pushing back when the owner called her to complain about us]."We don't have the new contract yet, but we expect it to arrive...mañana, in due time. It seems time to sit back and reflect on our experience. Like so much of Mexican culture, it seems that several levels of cultural reality have been operating simultaneously.
Mesoamerican Culture
Mexico's strong trade, or commercial, tradition is grounded in the tianguis, open air market, where barter, not money, was used. When we had to buy a replacement computer for Reed, we visited the Plaza Tecnológico thinking of something like Office Max.
We chuckled ruefully to discover that the 'Plaza' was a traditional mercado, market, with boxes of merchandise stacked in narrow aisles fronting tiny shops, and salespeople hawking sophisticated technology in the traditional way!
We chuckled ruefully to discover that the 'Plaza' was a traditional mercado, market, with boxes of merchandise stacked in narrow aisles fronting tiny shops, and salespeople hawking sophisticated technology in the traditional way!
This tradition is a natural explanation of the habit of "negotiating" just about everything. As my longtime Mexican friend explained,
"People in Mexico love to haggle. They bargain. The owner led off with 10% to be able to negotiate from there. Many times they do it just out of a habit, not because they have bad intentions.
"Ignorance also plays a role here. They just forget there is a contract and there are rules in the renting game."Spanish Colonial Culture
The social and political structure of Nueva España—authoritarian, hierarchical and often arbitrary [Don Rigoberto's word!]—was designed to protect and preserve the Spanish ruling elite. The common people (los de abajo, those of below, the Have-nots) had no choice but to defer to the demands and whims of anyone with any kind of official authority. Put the other way, the elite was accustomed to demanding deference and unquestioning obedience.
Independence from Spain (1810-1821); Mexican Revolution (1910-1917)
Mexico's War of Independence from Spain began in 1810 and finally ended in 1821. But 'independence' from Spain set off what was essentially a century-long internal struggle for control among competing regional strong men.
Mexico's War of Independence is usually described as a fight by Mexico's criollos (Spanish born in Mexico) for political power denied them by the Spanish Crown. The Mexican Revolution early in the twentieth century was a struggle for power by los de abajo, the Have-nots. It is sometimes said that the Mexican Revolution was never completed in the sense that power is still denied to the majority of Mexico's people.
Modern Mexico
When the Revolution finally wound down, the struggles for power and control continued. Eventually, the struggle was resolved by President Plutarco Elías Calles, who successfully substituted party rule for struggles between individual strong men. He, however, remained the strong man behind the presidency until the election of President Lázaro Cárdenas who, once elected, made clear his independence.
Arguably, Cárdenas is Mexico's most beloved president. Nonetheless, one-party rule by the Institutional Revolutionary Party (PRI) established by Calles in 1930 delivered "stability without democracy" to Mexico for 70 years until the year 2000, when Vicente Fox of the PAN (National Action Party) won the presidential election.
This is the context within which rule of law (following the rules) is developing inside Mexico. It is fair to say it remains an ongoing process. NAFTA has opened the country not just to the business operations, but to the business practices of transnational companies. The impact of NAFTA on Mexico and her people is a decidedly mixed bag, but one thing is clear: "It's not good for business" has emerged as a dynamic moving the culture toward increased acceptance of the need for rule of law.
Back to Our Rental Contract
The owner's behavior in dealing with renewal of our rental contract seems to illustrate many of these trends. Her reliance on a fianza company is a key example. Carlotta just told us that the previous tenant had not paid several months rent, which the owner lost because she had no rent insurance—a defect that she remedied when she rented to us.
The owner's decision to engage a transnational real estate company, Century 21, rather than a local Mexican agent is also interesting. I wonder what her thinking was. I doubt she thought that in upholding the terms of the contract, "her" agent would end up arguing "our" case. Tellingly, the owner's own choices have set limits around her arbitrary tendencies.
I'll bet that it never occurred to her that the same contract terms that bind us would also bind her. As our lawyer pointed out to us, "As tenants you have rights and obligations under the contract, and so does the owner." A good contract is mutually beneficial, not one-sided.
Oh, have I mentioned that we are never bored living in Mexico? Stay tuned!
Mexico's War of Independence is usually described as a fight by Mexico's criollos (Spanish born in Mexico) for political power denied them by the Spanish Crown. The Mexican Revolution early in the twentieth century was a struggle for power by los de abajo, the Have-nots. It is sometimes said that the Mexican Revolution was never completed in the sense that power is still denied to the majority of Mexico's people.
Modern Mexico
When the Revolution finally wound down, the struggles for power and control continued. Eventually, the struggle was resolved by President Plutarco Elías Calles, who successfully substituted party rule for struggles between individual strong men. He, however, remained the strong man behind the presidency until the election of President Lázaro Cárdenas who, once elected, made clear his independence.
Arguably, Cárdenas is Mexico's most beloved president. Nonetheless, one-party rule by the Institutional Revolutionary Party (PRI) established by Calles in 1930 delivered "stability without democracy" to Mexico for 70 years until the year 2000, when Vicente Fox of the PAN (National Action Party) won the presidential election.
This is the context within which rule of law (following the rules) is developing inside Mexico. It is fair to say it remains an ongoing process. NAFTA has opened the country not just to the business operations, but to the business practices of transnational companies. The impact of NAFTA on Mexico and her people is a decidedly mixed bag, but one thing is clear: "It's not good for business" has emerged as a dynamic moving the culture toward increased acceptance of the need for rule of law.
Back to Our Rental Contract
The owner's behavior in dealing with renewal of our rental contract seems to illustrate many of these trends. Her reliance on a fianza company is a key example. Carlotta just told us that the previous tenant had not paid several months rent, which the owner lost because she had no rent insurance—a defect that she remedied when she rented to us.
The owner's decision to engage a transnational real estate company, Century 21, rather than a local Mexican agent is also interesting. I wonder what her thinking was. I doubt she thought that in upholding the terms of the contract, "her" agent would end up arguing "our" case. Tellingly, the owner's own choices have set limits around her arbitrary tendencies.
I'll bet that it never occurred to her that the same contract terms that bind us would also bind her. As our lawyer pointed out to us, "As tenants you have rights and obligations under the contract, and so does the owner." A good contract is mutually beneficial, not one-sided.
Oh, have I mentioned that we are never bored living in Mexico? Stay tuned!
Still Curious?
A light-hearted, even humorous article comparing U.S. and Mexican attitudes toward rule of law appeared recently in the Mexican newspaper La Jornada. Legal "Fines" as a Teaching Tool was written by a Mexican anthropologist and academic who lived in California for some months while he was a visiting professor at UCLA.
Related Jenny's posts:
- Renewing Rent Contract 1: Civil Society, Rule of Law and Personalismo relates the first actions we took in response to the owner's 'arbitrary' demand for a rent increase in violation of the contract;
- Short history of Mexico characterizes Mexico's major historical periods;
- Partying With Impunity next-door to Jenny's apartment;
- Bureaucracy: Labyrinths of Power relates what we learned by our experiences trying to move our bank account from Pátzcuaro to Mexico City;
- What Makes Mexico's Legal System So Different? is the question we had to answer when trying to renew our Mexican resident visas;
- Work in Mexico: "It's my job" discusses the rise of the informal economy not only as a coping strategy for dealing with an authoritarian, often arbitrary and hostile environment, but as a way of maintaining personal dignity and respect.
- A Walk Around Jenny's Neighborhood;
- Jenny's Neighborhood: Making Friends Mexico City Style;
- Saturday Market in Coyoacán;
- Tlatelolco: Twin City of Aztec Capital includes a section that describes Tlatelolco's flourishing mercado, market, and the crucial role its long-distance traders performed on behalf of the Aztec capital, Tenochtitlán.
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