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Practical Information about Real Estate in Mexico

In the 1917 United Mexican States Constitution, in their 27th article points out that ownership of the lands and waters within the boundaries of the national territory is vested originally in the Nation, which has had, and has, the right to transmit title thereof to private persons, thereby constituting private property.

The United Mexican States Constitution gave communal or public land to each Mexican town, this earth must be only for the employment or only possessed by Mexican nationalists, and it could not be sold of distance neither to the best bidder. This law was put indeed due to the problems raised with Spaniards, French and American, that controlled as much land as waterways in Mexico. In 1973, a well-known constitutional amendment as the Foreign Right of the Investment allowed foreigners to buy property everywhere of Mexico, except in the “restricted area” (32 miles from beach and 64 miles of any border frontier). The biggest problem that was raised with this amendment is that most of the foreigners wanted to buy expressly in the border and coastal areas.

In January of 1994 when the North America Free Trade Agreement (NAFTA) became effective an amendment to the article 27th of the Mexican United States Constitution, in which allow foreigners to possess properties in the “restricted area”, depending on their location and their use, only through a “trust” (bank trust) or trusteeship, The “trust” or trusteeship was thought, among other things, as a way of protect foreigners interested in the possession of properties in Mexico; the reasoning is because when making the property transfer by means of a trusteeship, it is carried out an intense revision of the transaction to assure the legality and good intention of it. Also for a “trust”, the bank checks the property, the insurance and the indebtedness of this, providing remote protection to the foreign owner.

In the past, some foreigners bought properties illegally and with retention rights unconsciously. In those days there was not any way of protecting them, there were not any confirmation form neither systems of justness.

With the new laws and the affluence of real estate professional agents now their transactions are safe and they are protected. Many people are attracted by cheap properties in front of the beach; but don’t forget to remember that something that seems too good to be true is probably a swindle. Never buy a property in Mexico without a professional agent that is an AMPI member, another option it is to look for prestige international signatures that have representation offices in Mexico so that they help you in the all that a purchase or sale operation requires.

You should have in mind that your real estate agent, besides property search, there are some other tasks that he/ she will carry out to assure the legality of his transaction are:

  1. Verify if the description in the seller’s title is accurate, when compared to the land itself and the copy in the property registry.
  2. Make sure there are not errors on the exact location of the property.
  3. Verify the title chain. Make sure that at least during the 10 years preceding your date, all transfer documentation was drafted by legal counsel. It is important to consider the sacramental formalities of documents required in Mexican real estate matters. Title problems are the main cause of real estate litigation cases. All of this can be avoided by simply acquiring insurance. Luckily in Mexico, title insurance in now available in our country and it can give you peace of mind when completing your purchase.
  4. Try to find out if all the requirements and empowerments were fullfield / verified during the current owner’s (seller) transaction, especially if the owner is a corporate entity. Also weather that transfer was allowed or if the company’s representative had the authority at this time. Otherwise, he/she title may be declared null any you would be wrapped in a legal problem.
  5. Physically verify whether there are any cables or power lines, pipelines, sewage ducts, rights of way, apparent paths made by people, vehicle or cattle, steams of water (even dried up), possible landsides, toxic materials buried, or flora and fauna officially protected, within property.
  6. Check if the parcel infringes areas prohibited or restricted by federal or state laws or regulations (like beach).
  7. Find out if there are any pending taxes or other governmental dues that are or may can become liens, and that there are no registered encumbrances or servitudes upon the property.
  8. Obtain all permits, appraisements, certificates, letters of feasibility and tax receipts of the different entities and official authorities. With these documents, your counsel will be able to represent you when dealing with the developer, agent, notary, seller, or, if the transaction includes “restricted zone”, with the bank, the Ministry of Foreign Affairs and the Foreign Investment Registry.
  9. Draft or review the contracts and the documents you are required to sign.
  10. Make sure the notary public sends a notice to the recorder immediately after the purchase documents are executed and that he/she later your new title.

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