Are you a real estate developer in Mexico? , or Do you grant the consumer the right to use real estate through the timeshare system? You are obliged as a supplier to comply with the provisions of articles 73 to 76 of the Federal Consumer Protection Act (LFPC). Failure to do so can result in million-dollar penalties, loss of trust and brand reputation.
Who is considered a “supplier” to PROFECO?
According to the LFPC, a “supplier” is considered to be any natural or legal person who is a fractionator, builder, developer and other people who are involved in the advice and sale to the public of housing intended for housing, or grant real estate through the time-sharing system. This applies to both horizontal and vertical projects, subdivisions, condominium developments and pre-sale marketing.
If you or your company engages in any of these activities, you are legally obliged to meet specific requirements with PROFECO as a supplier.
What should the contract between supplier and consumer include?
Article 73 Ter of the LFPC states that contracts must be clear, transparent and protect the consumer. They must contain at least:
- Place and date of signature, as well as full supplier and consumer data, including name, address and RFC.
- Be written in Spanish, notwithstanding that they may also be expressed in another language. In case of differences in the text or wording, it will be as stated in the Spanish language.
- The total price in national currency, payment method, possible additional charges and the applicable exchange rate if foreign currency is mentioned.
- Description of the contracted good or service, the dates of delivery or execution, the guarantees offered and the procedures in case of cancellation.
- The rights and obligations of both parties, as well as the reciprocal penalties in the event of non-compliance.
- In purchase and sale transactions, the characteristics of the property, deeds and proof that the property is free of encumbrances must be included, always complying with applicable legislation.
Mandatory registration with PROFECO
Article 73 states that all contracts related to the above must be registered with PROFECO before being used in commercial operations. The registered contract avoids abusive clauses and provides legal certainty to both the developer and the consumer.
This procedure is mandatory and can be done through the PROFECO electronic portal. Without this record, the sale could be considered an abusive or illegal practice.
Mandatory minimum guarantees
Article 73 Quater requires developers to provide the following guarantees:
- 5 years for structural issues;
- 3 years for waterproofing; and
- 1 year for other elements of construction, such as hydraulic, sanitary, electrical and finished installations.
In addition, Article 73 Quintus states that: if the consumer makes the warranty valid and the defects persist due to the supplier's responsibility, the supplier must repair them immediately and grant a bonus: 5% if they are minor faults and 20% of the value of the property if they are serious faults.
The deadline starts from the delivery of the property, and the repair must be carried out at no cost, and without requiring the consumer to obtain a technical opinion. This applies even if the consumer has signed a different contract: the law prevails over any clause that limits these rights.
Penalties for non-compliance
Failure to comply with any of these provisions may result in:
- Fines of up to $3,000,000 MXN depending on the severity.
- Temporary or permanent closure of the commercialized development.
- Prohibition of marketing real estate until the contractual situation is regularized.
- Reputational damage and loss of trust with future buyers and investors.
Compliance with the LFPC isn't just a legal obligation: it's a strategic tool that provides certainty, protects your project and enhances your reputation as a developer. Comply with well-drafted and registered contracts from the start, and with clear guarantees, can save you from litigation and costly penalties.
Are you a developer and need legal support with your contracts and obligations to PROFECO?
At Singular Law, we help you:
- Drafting and recording your contracts in accordance with the law.
- Ensure compliance with your obligations with PROFECO.
- Prevent sanctions and protect the viability of your development.
