Bienes Raices En México

FAQ
Frequently Asked Questions on Real Estate in Mexico
Americans are sometimes fearful of buying property in Mexico. Their fears are often based on misconceptions they have heard from third parties, or they are the result of confusion about past history and present practices in Mexico. Here are some of the myths and frequently asked questions, followed by an explanation.

1. IS IT TRUE THATFOREIGNERS CANNOT OWN REAL ESTATE IN MEXICO?
NO. In most of Mexico, Americans, or any other foreigners, can own land outright. Prior to 1971, land in the restricted zones - 50 km. from the ocean and 100 km. from the borders was restricted from foreign ownership. However, in 1972, the Fideicomiso (bank trust system) was developed specifically to enable foreigners to buy residential property in therestricted zones.

2. MUST FOREIGNERS HAVE A MEXICAN PARTNER? NOT TRUE. In the past, a corporation or partnership had to be owned with a Mexican partner who owned at least a 51% interest. This is no longer the case. Now, a Mexican corporation can be 100% foreign owned and is able to buy property for business purposes with fee simple title even in the restricted zones under the Foreigninvestment Law of 1993.

3. HOW DO I OWN RESIDENTIAL PROPERTY THROUGH A FIDEICOMISO/TRUST)?
The law is very precise about the real estate Fideicomiso. The Fideicomiso is designed specifically for non-nationals to own residential property in formerly restricted zones. It provides, under the Mexican Constitution, the same legal rights of ownership, as a Mexican would have. It bestows upon the owner ofthe trust absolute and irrevocable control over the property held in trust. It is set in 50-year increments renewable for perpetuity. It can be bought, sold, inherited & willed.

4. DOES THE BANK OWN MY TRUST? NO. The bank trust operates much the same way as a U.S. bank trust does. The bank only holds the trust for your ownership and protection under Mexican law. It does not own the trust. Thebank serves as the owner’s employee. It operates solely under the instructions of the owner of the trust. It can be bought, sold, inherited & willed. The Fideicomiso acts much the same as a Deed of Trust does in the U.S. providing equity ownership.
 
5. ISN’T A BANK TRUST THE SAME AS A LEASE? NO. Under a bank trust, the beneficiary (buyer/owner) has all the rights of ownership: the rightsto use, borrow money on, make improvements on, and transfer. A lease grants only the right to
use. If the tenant makes improvements, such as building a house on the property, that house belong to the landlord, nor can the tenant sell the property or borrow money on it. A lease cannot contain provisions for future renewals whereas a
Fideicomiso is guaranteed renewable into perpetuity.

6. CANTHE MEXICAN GOVERNMENT TAKE AWAY FOREIGNERS PROPERTY AT ANY TIME?
NO. The Mexican government formed the Fideicomiso for foreigners through constitutional law and provides them, under the Mexican Constitution, the same legal rights of ownership as a Mexican would have. Secondly, the N.A.F.T.A. Treaty (1994) between Canada, Mexico and the U.S. further put in place many requirements, includingsecurity provisions that prevent any of these governments from arbitrarily seizing land from the rightful owner.

7. What happened at Punta Banda? Didn’t the government take the landfrom some Americans?
No. The problems at Punta Banda started many years ago, and while it is complicated, the following is a layman’s simplified version: The property bought by many Americans was never legally owned bythe seller. The title was always registered with a cloud on the title (never was title insurance available, let alone purchased). In the 1980’s, the rightful owners of the property petitioned to be paid or have their property returned (Many, many Americans negotiated with the owners to lease and maintain the property and continue to enjoy the property to this day). However, some Americans did not...