The Dark Side of Tulum’s Real Estate Fiasco

Tulum Real Estate Boom Turns into Nightmare for Foreign Buyers

What began as a dream for many international investors—owning a piece of paradise in Tulum—has turned into a nightmare. Hundreds of foreign buyers who poured their life savings into pre-sale condos are now facing financial ruin, legal limbo, and the harsh reality of a largely unregulated real estate market.

The Rise—and Collapse—of a Pandemic-Era Property Boom

Tulum exploded in popularity during the COVID-19 pandemic. With its white sand beaches, laid-back vibe, and appeal to digital nomads, the town quickly became a magnet for international investors. Developers moved fast to meet the demand, launching glossy pre-sale condo projects promising luxury finishes, infinity pools, and soaring returns.

One of the most prominent was Akela Development Group, which launched a series of developments under the Solemn brand. Units were often sold out during the pre-sale phase, with price tags nearing $200,000 USD. But when buyers arrived to see their investments, many found vacant lots, half-built shells, or nothing at all.

Tragedy and Fraud: The Akela Development Collapse

According to a Bloomberg investigation, Akela’s downfall was as dramatic as its rise. Of the company’s three co-founders, one was found dead on a beach, another reportedly died by suicide, and the third is believed to have fled the country. Investors were left with no recourse, no completed homes, and no answers.

For buyers like Erin Norris, a Texas resident who paid $107,000 USD toward a unit with Akela, the impact has been devastating. She later learned the developer never legally owned the land and that her entire investment had vanished. Like many others, she now faces a slow and uncertain legal battle to try and recover what she can.

A Systemic Problem: Fraud and Land Disputes in Tulum

Legal experts say this isn’t an isolated case. More than 70 developments in Tulum have been sold on pre-sale without ever being delivered. In many instances, buyers never received legal title to the property, leaving them trapped in a legal gray area.

The deeper issue is Tulum’s chaotic land ownership landscape. Much of the land in Quintana Roo has murky legal status due to its history as a federal territory. Developers have taken advantage of this, selling property on land they don’t own—or that’s entangled in existing legal disputes. One such case involved the Solemn Skyview project, where a woman discovered her land, legally purchased in the early 2000s, had been sold without her consent.

Legal Bottlenecks and Little Protection

While some buyers have turned to courts in Mexico and the United States, progress has been slow. Quintana Roo’s court system remains largely non-digitized, dragging out proceedings. Many victims face an uphill battle, especially when the company they’re trying to sue no longer exists or has vanished.

Law firms in Tulum report receiving up to two calls per day from new victims of real estate fraud. Most are middle-class foreigners—people who invested savings in what they believed would be a peaceful, affordable vacation home.

President Claudia Sheinbaum acknowledged the severity of the issue during a press conference on December 3, 2024, promising a federal investigation into illegal developments in Quintana Roo. “There have been many cases of this type of fraud,” she said, noting that developers have used national lands to carry out illegal sales.

What Can Buyers Do to Protect Themselves?

Despite the scandals, new condo projects continue to spring up across Tulum, with slick marketing and tempting price points still drawing interest from international buyers. Experts warn, however, that more fraud cases are likely if buyers and authorities don’t act with greater vigilance.

If you’re considering buying property in Tulum, the first step is to research the developer’s history and reputation thoroughly. Many victims now realize they didn’t look deep enough into the company’s track record before making a deposit. Next, verify legal ownership of the land—insist on seeing official title documents and make sure they match what’s being sold. It’s also crucial to avoid pre-sales that don’t offer legal guarantees or protections, such as escrow accounts or notarized contracts. And perhaps most importantly, hire a trusted local attorney who specializes in Mexican real estate law before signing anything.

A Warning—and a Call for Reform

The Tulum real estate scandal exposes serious weaknesses in Mexico’s property market, including a lack of oversight, slow-moving legal systems, and poor land registry practices. Unless state and federal authorities implement systemic reforms, and unless buyers exercise extreme caution, fraud will continue to tarnish one of Mexico’s most iconic destinations.

For now, the beaches remain beautiful—but what lies behind the polished renderings may be far more precarious than most investors realize.