If you're renting long-term in Mexico, you'll almost always be asked to pay a deposit. Deposit — the amount of money that the tenant gives to the landlord at the time of signing the lease as a guarantee of fulfillment of his obligations. Its purpose — cover possible tenant debts — unpaid bills for water, electricity, gas, internet, and in addition property damage if it occurs. The deposit is most often equal to one month's rent, but sometimes it is taken for two months, although Mexican law clearly sets a deposit limit of one month's rent for housing.
The conditions for the return of the deposit must be reflected in the rental agreement. Most often it will be written there that the deposit will be returned after the end of the lease agreement, when the tenant has fulfilled all the criteria, paid off utility bills and left no damage or debts. In practice, the return may be delayed or the deposit will not be returned at all, and quite often disputes arise between the parties on this issue.
It is generally accepted that Mexican landlords never return the deposit or the deposit is required to be "knocked out" of them. This is not entirely true. We know many cases of «happy separation» tenant and landlord with the return of the deposit, although cases of non-return of the deposit are also quite common. In this case, both the landlord and the tenant can be to blame for the fact that the deposit is not returned.
First, read the lease agreement again. Any violation of it on your part — a reason, but not necessarily a basis, for non-refund of the deposit.
No deposit refund at all
A common situation: the landlord simply does not return the money, citing «costs» or without explaining the reasons. Argument one — «the housing is worn out, I will put a deposit into repairs». The tenant believes that the apartment was handed over in the same condition as it was received. Even if the lease agreement states that the housing must be handed over in the same condition in which it was received, and the housing is indeed in the same condition, after a year of rent it is quite difficult to prove this. Here you need to either come to terms with it, or find out who exactly was damaged in the apartment, assess and repair the damage, and then continue to insist on the return of the deposit. When moving in, take photographs of the property.
If the landlord does not explain the reasons for the non-refund of the deposit at all, you also have a choice: either reconcile or go into conflict, and then all means are good. For example, you can declare that you will inform the tax office that the landlord does not pay taxes on the rental, or contact PROFECO or the court. Or that you will stay another month on account of the deposit. At the same time, you must evaluate the consequences, because the return of the deposit is still not guaranteed.
Special case — you move out before the end of the lease term. In this case, even we will be on the lessor's side. He expected to pay rent for the entire lease term, and end the lease before the agreed date — this is his lost profit. If you are unable to justify your early departure by the landlord’s failure to fulfill its obligations under the contract, then be prepared for the fact that the deposit will not be returned to you. On the other hand, if after moving in it turns out that there is a nightclub with loud music under your windows, which you did not know about when you signed the lease agreement, then the truth is on your side, demand termination of the agreement and the return of the deposit.
Unilateral holds
The landlord may withhold the deposit in whole or in part to cover:
- unpaid utility bills,
- repair of minor damage — burnt out light bulbs, taps, handles,
- repair of major breakdowns — furniture, household appliances,
- painting the walls, even if wear — ordinary, «normal» during your stay.
The problem is that the law does not clearly differentiate between normal wear and tear and damage. Here you must evaluate how the size of the deposit compares with the cost of repairs. It may be that you repair the damage yourself or replace broken items, and in return receive a refund of the deposit.
Using the deposit towards the last month of rent
Many tenants are trying to come to an agreement: “We’ve been living off the deposit for the last month.” Landlords are usually against it: according to the law, a deposit — This is a guarantee and not a rental fee unless expressly stated in the contract. However, there are also landlords who agree if they see no other reasons for non-refunding the deposit.
We believe that we can agree and live the last month on account of the deposit — This is the most successful and painless return option.
Disagreements regarding utility bills
Sometimes the landlord claims that the tenant still has debts on electricity (CFE bills), gas, water or internet, and withholds the money. Or last month's bills haven't arrived yet. You have the right to wait until the bills arrive, pay them and then receive a refund of the deposit.
Sometimes bills are issued after the tenant moves out (for electricity — once every two months), and he does not agree to pay for the time when he did not actually live.
Damage to furniture or equipment
When renting a «amabled» (with furniture) and «equipada» (with technology) they often argue about what exactly is considered damage. For example, the tenant claims that the refrigerator was already old, and the landlord demands compensation for the breakdown. Most often, the repair of such items or the purchase of new ones should be made at the expense of the tenant, unless otherwise agreed.
Delay in deposit return
Even if there is no dispute as such, the landlord may not return the money for months, under the guise of «checking accounts» or «waiting for receipts». This is a typical delaying ploy. It's difficult to advise anything here. Either resign yourself, or continue to remind, or go into conflict and threaten.
Unformulated agreements
When a lease agreement is concluded verbally or in a simplified written form without precise terms for the return of the deposit, it seems that the likelihood of conflict increases significantly. But this does not mean that the deposit cannot be returned. The same principles must apply here: if there are no debts and no damage, the deposit must be returned. In our impression, it is in such cases that landlords agree to let the tenant live out the last month of the deposit.
The Mexican Civil Code (Código Civil Federal) or state codes do not define clear criteria for the return of the deposit. The deposit is interpreted as an additional condition to guarantee the fulfillment of the obligations of the second party. At the end of the contract, the tenant is obliged to return the property in proper condition and close the accounts. The deposit serves precisely as security for this obligation. If the damage is not due to the tenant's actions, but to the landlord's responsibility for maintenance, it will be illegal to withhold the deposit.
The Consumer Protection Law (Ley Federal de Protección al Consumidor) and the practice of PROFECO (Prosecutor's Office for Consumer Protection) give tenants the tools to get their deposit back. If the contract contains unclear or one-sided deposit requirements, this may be interpreted as a cláusula abusiva (abusive clause). PROFECO declares it invalid. PROFECO position — The deposit must be returned at the end of the rental, minus only actual proven debts or damages. Hold «just in case» or «because the walls need to be repainted» most often considered illegal.
To prove his case and return the deposit, the tenant can go to PROFECO or to court. We are quite skeptical about this option for resolving the conflict, including because it requires careful collection of facts, strong nerves and takes quite a long time, sometimes months. However, this is one of the reliable solutions for returning the deposit, especially when the amount involved is large or other options have been exhausted.
To ensure your deposit is returned, you must notify your landlord that you are ending your tenancy one month before the end of the tenancy and before you pay the last month's rent. Most often, the requirement for such notification is specified in contracts. Then ask a question about the return of the deposit and get a clear answer from the landlord, and then act based on his answer.
In our experience, there was also a non-refund of the deposit at the end of the rental period. But we took this philosophically: we lived in the house for 3 years, and if we divide the deposit amount by these 3 years, we get a very small increase in the monthly rental cost.