Baja land deals end in lawsuits

Nearly 200 people have joined a lawsuit seeking the return of more than $20 million in deposits from the proposed Trump Ocean Resort in Tijuana.

Baja California coastal real estate was booming in late 2006 when Dawn Nicoli and her husband, Bruce Hoey, bought into the upscale La Esmeralda development planned in southern Rosarito Beach.

The Escondido couple said they felt safe paying $375,000 for two parcels of prime oceanfront property. They trusted their American real estate agent and the U.S. firm she represented, Realty Executives, and felt encouraged by their positive first experience buying property from her in Mexico.

But more than four years later, the land is nothing but a vacant lot. The couple has filed lawsuits on both sides of the border in their increasingly frantic struggle to obtain a refund. The property has a $1.8 million lien, and the Mexican company that took their money, Empresa Constructora Fortaleza, has long since closed shop.

The case is one of several involving Americans who said they mistakenly placed faith in U.S. real estate franchises or projects promoted by U.S. companies in Baja California. While affiliation with well-known U.S. firms or names may be a powerful marketing tool, it confers no special protection in Mexico.

Experts said buyers can safeguard themselves far more by asking lots of questions, seeking out qualified attorneys or other independent consultants, and understanding what they are signing before they hand over large sums of money. Title insurance and escrow accounts — even though not mandatory in Mexico — are now widely available and offer a measure of security.

“The vast majority of people buying in Mexico have done it safely,â€