C.A.G. Realty Services, is the association of Mr. John Gutierrez and Hoot Gibson. Not only does Mr. Gutierrez have over 28 years of mortgage experience, he has both duel citizenship in the U.S. and Mexico. He is extremely qualified to guide anyone through the Mexico land purchase transaction.
Additionally, we are approved brokers with ARA Capital S.A. de C.V., SOFOM, E.N.R., a major U.S. based financial institution that lends on existing home purchases, refi's, and both construction and take out loans in Mexico.
To help further your understanding of this process, we provide the following: But we also recommend that you seek legal advise before setting up your bank trust to be sure that your heirs are protected properly.
Fideicomiso Trust
There is a large misconception that foreigners cannot own Real Estate in Mexico. This used to be true and because of that, many people who wanted a home in Mexico were forced to lease land. This is where the ninety-nine year land lease confusion began. Today, foreigners can purchase land in Mexico through a Fideicomiso or "Trust".
The Mexican Fideicomiso has its origins in the American Trust. Dating back to the early 20th century, the Fideicomiso was originally adapted from the American trust and tailored to Mexican regulations. The origin of the term Fideicomiso comes from a Roman contract entitled Pacto de Fuduccia. The Fideicomiso can be applied to any type of contract as long as the purpose of the Fideicomiso is not illegal.
The current Mexican constitution was issued in 1917. Within the constitution, article 27 regulates everything concerning the Mexican Territory, ground, underground, sea, waters, natural recourses and general rules concerning property. Article 27 also establishes the restricted area. The restricted area encompasses 100 kilometers along the border and 50 kilometers along the coast. Article 27 also prevents foreigners from ?direct? ownership of property within the restricted area. For this reason, foreigners are allowed to purchase property in an indirect way. The most common is through a Fideicomiso.
With the North American Free Trade Agreement beginning January 1, 1994, the Foreign Investment Act of 1993 was passed by the Mexican congress to promote foreign investment into Mexico. This law allowed foreigners to own 100% of the shares of a corporation and purchase property. As a foreigner, you can acquire irrevocable and absolute ownership rights to property in Mexico through a 50 year perpetually irrevocable and transferable Fideicomiso Trust. This enabled foreigners, as beneficiaries of the trusts, to legally enjoy unrestricted use of land located in the restricted area.
Fideicomiso is the legal equivalent of deeded ownership (commonly referred to in the U.S. as fee simple). Upon the purchase of land through a Fideicomiso, the Mexican Government issues a permit to a Mexican bank of your choice. Clear, lien-free title to the property is then delivered to that bank. The bank acts as the trustee designating the purchaser as the beneficiary of the trust. The bank acts as an employee of the beneficiary in all transactions involving the property. As the beneficiary, you retain full use and control of the property and make all decisions concerning the property. Title insurance is also available from U.S. title insurance companies. Owning land in Mexico under a Fideicomiso Trust gives you the right to use, enjoy, lease, improve, mortgage, sell, profit, inherit and will the property.
Real Estate Transfer Process
The real estate transfer process begins after a written purchase offer is accepted by the seller and when a purchase-sale agreement is completed by both parties. Typically a deposit is required by the broker in order to transmit the offer to the seller. 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.
The Notario Publico is a government appointed lawyer who processes and certifies all real estate transactions, including the drawing and review of all real estate closing documents, 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 non-lien certificate 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, and an appraisal of the property for tax purposes is also required.
Title Insurance
American title insurance companies Stewart Title Guaranty Corp. and First American Title are now offering title insurance policies to foreign buyers in Mexico. Title insurance offers an extra level of protection for buyers purchasing property in Mexico.
When a buyer elects to obtain a title insurance policy, title insurers undertake an exhaustive search of property records, sometimes going back decades to establish clear title. They will also examine records to determine that taxes have been paid and that there are no remaining liens on a property that could become the obligation of the new buyer.
In Mexico, the notario publico (notary public), who is an attorney and appointed by the governor, certifies all real estate transactions. This is done after reviewing various property and tax records from a title search. American title insurance protects buyers against errors made by the notario publico.
Title insurance policies typically cost $7 per $1,000 of the purchase price.
Start your Mexico Real Estate search with us! Let us know the kind of property you are seeking and we will both find it, and assist you in the financing of your Mexican dream home. |