Introduction to Real Estate Fraud in Mexico
Real estate fraud has become a significant concern for families, investors, and the reputation of the real estate sector in Mexico, particularly in regions with growing real estate activity like the Bajío. According to data from the Federal Procurator for Consumer Affairs (Profeco), real estate fraud has increased by 20% in 2024, a trend that worries authorities and experts due to its magnitude and the unreported cases.
The Situation in Querétaro
Mario Palomares, President of the Bajío Innovation Real Estate Cluster (CIIB), mentioned in an interview with Econohábitat that this issue is not new but has gained momentum in key states like Querétaro, one of Mexico’s most active real estate markets.
“For several years now, these events have been surfacing in Querétaro. We know that around 15,000 people have been affected over the past five years, with nearly 500 investigations open,” Palomares stated. However, he added that no responsible party has been detained yet, highlighting the complexity in tracing and punishing those behind these fraudulent schemes.
Modus Operandi
According to the CIIB, one of the main concerns regarding fraudulent activity is the proliferation of false advertisements on the internet and the sale of real estate projects that collect advance payments without any real backing or delivery guarantees.
“Whether it affects one person or thousands, this issue requires attention due to the trust, certainty, and credibility needed by the real estate industry. The impact is very strong,” Palomares warned, adding that “Querétaro has a solid legal framework, but the rapid growth demands reinforced prevention.”
Querétaro’s real estate market has experienced significant growth due to its proximity to Mexico City and high quality of life. An estimated 120 families move there daily in search of a home to establish themselves in the state.
The Federal Housing Society (SHF) reported that around 18,764 homes were placed in 2024, a 7.5% increase compared to 2023. While this presents growth opportunities for developers, it also attracts organized groups focused on real estate fraud.
Certification: A Sector Response
To tackle this challenge, the Council of Real Estate Professionals in Mexico, along with the CIIB, announced the creation of the Reliable Developer Certification. This initiative aims to safeguard families’ investments and strengthen the reputation of formal developers.
The certification aims to elevate ethical, transparency, and professionalism standards nationwide. It will be managed by an Autonomous Certification Committee composed of independent experts who will evaluate developer companies based on legality, solvency, governance, ethical business practices, and technical track record.
The project will start in Querétaro and expand to nine priority states, including Yucatán, Jalisco, Chihuahua, Aguascalientes, and Michoacán. Before its launch, around 40 firms have expressed interest in obtaining the distinction as a demonstration of their commitment to best practices.
Key Questions and Answers
- What is the main issue? Real estate fraud has increased by 20% in Mexico, particularly affecting the Bajío region and Querétaro, one of the country’s most active real estate markets.
- Who is Mario Palomares? He is the President of the Bajío Innovation Real Estate Cluster (CIIB), who has highlighted the growing concern of real estate fraud in Querétaro.
- What are the common fraud methods? False advertisements on the internet, selling real estate projects without backing or delivery guarantees, and collecting advance payments are common fraud methods.
- What is the Reliable Developer Certification? It’s an initiative by the Council of Real Estate Professionals in Mexico and CIIB to protect families’ investments and strengthen the reputation of formal developers through elevated ethical, transparency, and professionalism standards.
- Which states will be affected by this initiative? The project will start in Querétaro and expand to nine priority states, including Yucatán, Jalisco, Chihuahua, Aguascalientes, and Michoacán.
