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How Foreigners
Can Own
Real Estate in Mexico
Here are some answer to important questions about
buying and owning property in Mexico. Information is provided by the
Estrella del Mar community.
Click on a Topic for More Information:
The Restricted Zone
Fideicomiso or Bank Trust
Process
Notario Publico or Notary Public
For Additional Information Fast,
click here to email Estrella del Mar Sales
Team!
A sun-splashed beachfront lot at Estrella del Mar.
The Restricted Zone
The Mexican Constitution regulates the ownership of
the land and establishes that "...in a zone of 100 kilometers along the
border or 50 kilometers along the coast, a foreigner cannot acquire the
direct ownership of the land." These areas are known as the "Restricted
or Prohibited Zones". Nevertheless, the latest Mexican Foreign
Investment Law, which became law on December 28, 1993, allows a
foreigner to obtain the rights of ownership through a Fideicomiso or
Bank Trust.
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Fideicomiso or Bank Trust
Any foreigner or Mexican National can constitute a
Fideicomiso (the equivalent to an American beneficial trust) through a
Mexican bank in order to purchase real estate anywhere in Mexico,
including the Restricted Zone. To do so, the buyer requests a Mexican
bank of his/her choice to act as a trustee on his/her behalf.
The bank, as a matter of normal course, obtains the
permit from the Ministry of Foreign Affairs to acquire the chosen
property in trust. The Fideicomiso can be established for a maximum term
of 50 years and can be automatically renewed for another 50 year period.
During these periods you have the right to transfer the title to any
other party, including a member of your family.
The bank becomes the legal owner of the property
for the exclusive use of the buyer/beneficiary who has all the benefits
of a direct owner, including the possibility of leasing or transferring
his/her rights to the property to a third party or to a pre-appointed
heir.
The trustee is responsible to the buyer beneficiary
to ensure precise fulfillment of the trust, according to Mexican Law,
assuming full technical, legal and administrative supervision in order
to protect the interests of the buyer/beneficiary. Fideicomisos are not
held by the trustee as an asset of the bank.
For practical purposes, even in unrestricted zones
many foreigners and Mexican Nationals, for that matter, prefer to hold
their property under a Fideicomiso.
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Estrella del Mar is perched right on the beach.
Process
Most real estate transactions are "opened" after a
written purchase offer is accepted by the seller and when a
purchase-sale agreement (promissory contract) is signed by both
parties.
It is common practice to deliver to the seller, as
an advance payment, the equivalent to a 20-50% (deposit) of the total
price upon signing the purchase-sale agreement which should contain a
penalty clause applicable in case there is a breach of contract by any
of the parties.
Normally, when signing the escritura or official
deed, which needs to be certified by a Notario Publico or notary public,
the balance is paid and the property is delivered. This should not take
more than 60 days.
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Notario Publico or Notary
Public
The Notario Publico is a government appointed real
estate and corporate lawyer who processes and certifies all real estate
transactions, including the drawing and review of all real estate
closing documents and the collection of fees and taxes, thus insuring
their proper transfer.
Furthermore, all powers of attorney, the formation
of corporations, wills, official witnessing, etc. are handled and duly
registered through the office of the Notario Publico, who is also
responsible to the government for the collection of all taxes involved.
In connection to real estate transactions, the
Notario Publico, upon request, receives the following official
documents, which, by law, are required for any transfer:
A Certificate of No Liens from the Public Property
Registry based on a complete title search.
A statement from the Treasury or Municipality
regarding property assessments, water bills, and other pertinent taxes
that might be due.
An appraisal of the property for tax purposes.
For Fast Information,
click here to email Estrella del Mar Sales
Team!
For Fast Information,
click here to e-mail the La Ventana del
Mar Sales Team!
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