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Lexy

rent paid in pesos, what's the law?

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"Give a man enough rope and he'll hang himself".

An old expression and not meant to be taken literally.

The business was sold in 2008 to Steve and Fernando who have taken it 3 levels above what we had and they deserve all the credit for that.

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"Give a man enough rope and he'll hang himself".

An old expression and not meant to be taken literally.

The business was sold in 2008 to Steve and Fernando who have taken it 3 levels above what we had and they deserve all the credit for that.

So you are hanging yourself?

I am not interested in your commercial affairs.

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We'll let the audience decide.

I was merely indicating from whence my information came having been in business, also a long term rental that was priced in dollars and all the way being guided by our attorney. I didn't come by it from sitting at the "Table of Knowledge" at either Salvador's or the donut shop as much "knowledge" I have heard over the years has come from.

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We'll let the audience decide.

I was merely indicating from whence my information came having been in business, also a long term rental that was priced in dollars and all the way being guided by our attorney. I didn't come by it from sitting at the "Table of Knowledge" at either Salvador's or the donut shop as much "knowledge" I have heard over the years has come from.

Your experience was running a B&B, not renting property.

I got my legal ability from actually filing in state court, federal court and all the way to SCOTUS. I don't hang out at Salvador's or the donut place.

This subject is about paying pesos in Mexico. Pesos are the legal currency in Mexico and must be the currency in all contracts as well as the contract must be written in Spanish and all involved must have originals, not copies.

Not doing this, is like a landlord in the U.S. writing a contract in German because he is German, and saying the tenant must pay in Bit Coins. Do you think that would hold up in court? I don't think so.

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Which case did you argue at SCOTUS?

How many cases here in Mexico?

In your example if Bitcoins are a legal currency and both parties wanted that currency used and wanted it written in German, then yes I believe that would be a legal contract.

Anyhow, if I got bad legal advice and it appears I must have, since anyone who argued a case before SCOTUS must be much wiser than a local hick attorney here in Mexico, I guess I was just lucky not to get caught.

I will stop taking up bandwidth on this interesting topic.

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Ay, ay, ay, now my head is spinning! I've considered the posts stating that the peso exchange rate on a lease should be fixed to the time the lease was signed. That was news to me. I only started paying my rent in pesos to my Mexican landlord (no rental agent) because no one will accept US checks here now, since FATCA or whatever it is - unless those checks are being sent to the US??

To reiterate: If I still were able to pay my rent with a US check, my landlord would cash it somewhere and reap the benefit of the current exchange rates. My check would still be in the same amount of USD.

IF I pay in pesos, I pay the current peso rate which affords them a lot more pesos, but is still costing me the same amount in USD. In doing this, I am NOT paying higher rent. So, to me that has not been a problem. I don't even know how much they follow the exchange rate changes.

But... now I wonder if I should inform them that my peso amount should be tied to the rate at the time I first signed my lease, 3.5 years ago. That would lower their rent. They would not be happy about that. Plus, I don't even have a lease now - we mutually agreed to not continue with it because I am happy in my house (except for the noise) and they like me as a tenant.

So, if you were me, what would you do regarding this matter? I'm well aware that if I were paying the peso rate at the time of my original signing of the lease, my rent would have declined by about 30% which would be great for me, not so great for them, because the Mexicans do experience general inflation when the peso devalues a lot.

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So, if you were me, what would you do regarding this matter? I'm well aware that if I were paying the peso rate at the time of my original signing of the lease, my rent would have declined by about 30% which would be great for me, not so great for them, because the Mexicans do experience general inflation when the peso devalues a lot.

Compared to neighbors, others living in similar places, are you paying, more, the same, or less? If its the same or less, say nothing, continue forward, steady as she goes. If its more, then have a discussion.

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I am still waiting for Spencer's opinion on this thread,I've waiting all these days.

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I think Spencer might be backed up with paying clients. I've been waiting on some papers for over a week and I'd rather he work on my stuff than peruse the board giving free advice.

I'm still trying to understand the mindset of a long term lessee. There seems to be an obsession with following the letter of the law (whatever that is) so that when the landlord is sued the judge will rule in favor of the tenant. Are there that many instances of litigation between owner and tenant?

Isn't a home lease in Mexico between 2 parties from The US or Canada more an amicable agreement than a legal one?

This discussion wouldn't be here unless there wasn't this wild fluctuation between currencies over the last year. In Jan 2015 USD/MXN was $14.73 but by year end it was 18% higher at $17.38. Throw the CDN/MXN and CDN/USD fluctuations in the mix and you have a real mess. What would this discussion look like if the currency movement was in the opposite direction?

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It's already been said by one poster that Spencer helped get her a lease where she'll pay her rent each month in pesos tied to the USD/MXN exchange rate that month. She seems content with that.

Lexy

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I am still waiting for Spencer's opinion on this thread,I've waiting all these days.

Maybe there is no definitive answer..each lawyer will read the regulation differently.... this is what happened when we were in the FM2 vis Pemenate transition..some Notarial would get you a break on capital gains others would not!!

Mexico is not a country of black and white when it comes to interruption of legislation/regulations and of course having extra Pesos helps.

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I think this federal law explains it. Foreign currency is not allowed to be used in Mexico and it doesn't give an exception to contracts. No foreign currency also means no foreign currency in contracts.


MONETARY LAW OF THE UNITED MEXICAN STATES


CHAPTER I

On Currency and its Legal Regime


Article 1st

The unit of the monetary system in the United Mexican States is the peso, with the equivalence that the law shall set forth afterwards.


Article 2nd


The only currency of legal tender shall be:


a). Banknotes issued by the Banco of México, S. A., in the denominations set forth by the statutes of such bank.



ARTICLE 4


Payment obligations in foreign currency, acquired in the Republic to be performed therein, shall be settled in the terms set forth in article eight of this law, unless the debtor shall prove, in case of loan transactions, that the currency received from the creditor was in

domestic currency of any kind, or that, in case of other transactions, the currency in which the obligation was originally contracted was domestic currency of any kind; in such cases, the aforesaid obligations shall be settled in domestic currencies, as provided in articles fourth and fifth of this law, respectively, at the exchange rate that would have been considered upon carrying out the conversion from the domestic currency received into the foreign currency or otherwise, if it is not possible to fix such rate, at the legal exchange rate..


Article 7th


.- Payment obligations in any amounts of Mexican currency shall be invariably denominated in pesos and, if applicable, in its fractions. Such obligations shall be settled by handing over, against their face value, banknotes issued by the Bank of Mexico or metallic coins

indicated under article 2nd


Article 8th


Foreign currency shall not be of legal tender in the Republic, unless when the Law explicitly determines otherwise. Payment obligations in foreign currency, acquired within the Republic or abroad, to be performed in Mexico, shall be paid by handing over the equivalent of such amount in domestic currency at the exchange rate in force on the date and place where the

payment is to be made.


This exchange rate shall be determined in accordance to the provisions issued to that effect by the Bank of Mexico under the terms set forth by its Organic Law

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So many mistakes, so many incorrect assumptions post after post after post. Hopefully, this will put an end to it all, but I doubt it.

It appears that only a moderator shutdown can save us now or this nonsense and misinformation could continue another six wasted pages.

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It appears Article 8th refutes your argument.

Article 8 appears to have been the excess of rope. LOL

So many mistakes, so many incorrect assumptions post after post after post. Hopefully, this will put an end to it all, but I doubt it.

It appears that only a moderator shutdown can save us now or this nonsense and misinformation could continue another six wasted pages.

"Foreign currency shall not be of legal tender in the Republic, unless when the Law explicitly determines otherwise. Payment obligations in foreign currency, acquired within the Republic or abroad, to be performed in Mexico, shall be paid by handing over the equivalent of such amount in domestic currency at the exchange rate in force on the date and place where the

payment is to be made."
There is no law stating foreign currency can be used in domestic leases. Not one.
It says foreign currency is illegal. It says that if you are paying for something that is sold in a foreign currency that you pay in pesos at the rate posted by the Bank of Mexico that day. Because foreign currency is illegal, it cannot be stated in a contract because it is illegal. Nothing can be bought or paid for in foreign currency.
"Article 2nd"
"The only currency of legal tender shall be: (Shall be means MUST be)
a). Banknotes issued by the Banco of México, S. A., in the denominations set forth by the statutes of such bank."
The only legal tender is pesos so no contract can use another currency.
Federal Commerce Code
TITULO DECIMO TERCERO
"De la Moneda
Artículo 635.- La base de la moneda mercantil es el peso mexicano, y sobre esta base se harán todas las operaciones de comercio y los cambios sobre el extranjero.
Artículo 636.- Esta misma base servirá para los contratos hechos en el Extranjero y que deban cumplirse en la República Mexicana, así como los giros que se hagan de otros países.
Artículo 637.- Las monedas extranjeras efectivas o convencionales, no tendrán en la República más valor que el de plaza.
Artículo 638.- Nadie puede ser obligado a recibir moneda extranjera.
Artículo 639.- El papel, billetes de banco y títulos de deuda extranjeros, no pueden ser objeto de actos mercantiles en la República, sino considerándolos como simples mercancías; pero podrán ser objeto de contratos puramente civiles. "
The Commerce Code and Monetary Code clearly state all financial activity must be in pesos.
A lease must state the exact peso amount when the lease is signed. "When the payment is made" means it is the agreement between landlord and tenant when the lease is signed. Otherwise, people could not have leases if the peso price changed every month because a lease is required to freeze the rental price for the length of the lease. An agreed to rent price cannot float. The tenant can sue and demand overpaid rent back.
Commerce Code
Article 635. The basis of commodity currency is the Mexican peso, and this basis all trading operations and changes will be made on Foreign.
Article 636.- This same base serve to contracts made in the Abroad and that must be met in Mexico and turns
that are made from other countries.
Article 637.- Actual or conventional foreign currencies shall not the Republic more value than the square.
Article 638.- Nobody can be forced to receive foreign currency.
Article 639.- The paper, banknotes and foreign debt securities not they are subject to commercial acts in the Republic, but considering as mere commodities; but may be purely civilian contracts.

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So many mistakes, so many incorrect assumptions post after post after post. Hopefully, this will put an end to it all, but I doubt it.

It appears that only a moderator shutdown can save us now or this nonsense and misinformation could continue another six wasted pages.

You have failed to point out what is wrong, only to criticize that it must somehow be wrong because you don't like it. There are other threads you can read if you disapprove of a discussion. Either join in with information or only read, but there is no reason to throw criticism at it if you cannot provide any information.

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Ay, ay, ay, now my head is spinning! I've considered the posts stating that the peso exchange rate on a lease should be fixed to the time the lease was signed. That was news to me. I only started paying my rent in pesos to my Mexican landlord (no rental agent) because no one will accept US checks here now, since FATCA or whatever it is - unless those checks are being sent to the US??

To reiterate: If I still were able to pay my rent with a US check, my landlord would cash it somewhere and reap the benefit of the current exchange rates. My check would still be in the same amount of USD.

IF I pay in pesos, I pay the current peso rate which affords them a lot more pesos, but is still costing me the same amount in USD. In doing this, I am NOT paying higher rent. So, to me that has not been a problem. I don't even know how much they follow the exchange rate changes.

But... now I wonder if I should inform them that my peso amount should be tied to the rate at the time I first signed my lease, 3.5 years ago. That would lower their rent. They would not be happy about that. Plus, I don't even have a lease now - we mutually agreed to not continue with it because I am happy in my house (except for the noise) and they like me as a tenant.

So, if you were me, what would you do regarding this matter? I'm well aware that if I were paying the peso rate at the time of my original signing of the lease, my rent would have declined by about 30% which would be great for me, not so great for them, because the Mexicans do experience general inflation when the peso devalues a lot.

The laws in Mexico are written by Mexicans for Mexicans.

If your landlord rented to a Mexican whose income is in pesos, the rent he receives is still the same to him in pesos. What difference does it make to the LL what the dollar is since he spends his money in Mexico?

LLs are supposed to rent to Mexicans also and Mexicans pay their rent in pesos, not dollars. Why should a Mexican tenant be asked to pay pesos based on what the dollars is at the time rent is due?

By getting more pesos, the lease is illegal. A lease freezes the rent price for the length of the lease and letting it float every month doesn't freeze the rent. It also increases it beyond what the Jalisco Code allows.

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Since stating a dollar price for rent and exchanging dollars to pesos to get more pesos is actually a bait and switch, it would be interesting to know if Profeco (consumer protection) will handle a complaint. Profeco also states that and item in foreign currency is in pesos at that day's exchange rate.

"ARTICLE 34. The data that hold the products or their labels, containers and packaging and their advertising, both domestic and foreign manufacturing origin, is expressed in Spanish language and its price in local currency terms in understandable and legible under the system General units of measure, without prejudice to further express themselves in another language or another measurement system."
ARTICLE 73 TER
'it will be at the exchange rate in force at the place and date on which the payment is made in accordance with applicable law;"

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I would suppose it is in human nature to want something for nothing. Do I enjoy the current exchange rate and savings? You bet. But when it came down to renting my home, (a beautiful perfect house) I strictly looked at my budget. I live month to month on my SS. I try not to touch my savings and keep it for medical purposes if I have any. My house was listed in U.S. dollars at an unbelievable low amount. My only question was how much I was going to have left taking the rent off the top. My landlord is Mexican and a lawyer. The lease certainly covered everything imaginable in his favor, but fairly. I also was required to sign 12 Promise to Pay rents for the year. One for each month. Upon paying the peso equivalent each month or U.S. dollars, my choice, each of these will be returned signed as my receipt.

He has promised that my rent won't change for 5 years and I take him at his word. I believe he was looking for the right long term renter, quiet, careful and respectful of his property and on time with the rent each month. This is what he got and that's why this house is $500 a month and the Realtor was so anxious to get me signed because his phone was ringing off the hook with persons wanting to see this house. It makes no difference to me how many pesos my rent is or will be. I budget for the $500 and that is what it is. Now lets talk about the price of a good steak dinner and a bottle of tequila.

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I would suppose it is in human nature to want something for nothing. Do I enjoy the current exchange rate and savings? You bet. But when it came down to renting my home, (a beautiful perfect house) I strictly looked at my budget. I live month to month on my SS. I try not to touch my savings and keep it for medical purposes if I have any. My house was listed in U.S. dollars at an unbelievable low amount. My only question was how much I was going to have left taking the rent off the top. My landlord is Mexican and a lawyer. The lease certainly covered everything imaginable in his favor, but fairly. I also was required to sign 12 Promise to Pay rents for the year. One for each month. Upon paying the peso equivalent each month or U.S. dollars, my choice, each of these will be returned signed as my receipt.

He has promised that my rent won't change for 5 years and I take him at his word. I believe he was looking for the right long term renter, quiet, careful and respectful of his property and on time with the rent each month. This is what he got and that's why this house is $500 a month and the Realtor was so anxious to get me signed because his phone was ringing off the hook with persons wanting to see this house. It makes no difference to me how many pesos my rent is or will be. I budget for the $500 and that is what it is. Now lets talk about the price of a good steak dinner and a bottle of tequila.

You are renting month to month and do not have a lease. I think he can kick you out whenever he wants because the monthly promise to pay is not enforceable if he chooses not to rent to you anymore. A promise to pay is in an unenforceable future that might not exist.

The law is written to cover everybody, not those who are temporality happy with a situation.

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I am not renting month to month. My contracted lease is from a beginning date to an ending date of one year duration. I understand a renewable one year lease as it allows either party to withdraw at it's termination even though he assured the Realtor and myself that if we were both happy at the end of each year he is considering it a five year agreement. At the time he had made an exception for my small dog on the promise that she is quiet and well behaved (if I'm at home or not) which she is when he had adamantly specified there were to be no pets. We'll see what happens when he finds out about ChuChu the wondrous parrot.

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I too live on Social Security. Since my rent is paid in pesos I am enjoying the current exchange rate. It has put more pesos in my pocket for discretionary spending.

I am doing some home improvements that will increase my enjoyment of the house and my land lady is delighted. I have been able to make additional charitable donations as well as purchasing items I "want" as opposed to only things I "need." I have visitors coming next month and will be able to do some special things with them instead of strictly limiting activiities due to my budget.

I know this will not last but I am enjoying the extra pesos while I have them. The point is, I have had extra pesos each month instead of giving extra pesos to my land lady. I still do not understand the argument that paying rent in U.S. Dollars converted each month to the then exchange rate wouldn't mean I am paying more rent each month.

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