The Mexican Constitution regulates the ownership of land and declares that …within a zone of 100 kilometers from the border or 50 kilometers from the coast, a foreigner cannot acquire the direct ownership of the land. These areas are known as Restricted or Prohibited Zones. However, the latest Mexican Foreign Investment Law, which was ratified on December 28, 1993, allows a foreigner or foreign corporation to obtain the rights of ownership through a fiduciary trust known as Fidelicomiso, the equivalent of a US beneficiary trust.
“Fideicomiso” or Bank Trust
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 property rights to a third party or to a pre-appointed heir. During this period, the foreigner is considered to be a Mexican National. The trustee is responsible to the buyer/beneficiary to ensure precise fulfillment of the trust, according to Mexican Law. It assumes 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 even Mexican Nationals prefer to place their property under a Fideicomiso.
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. In most cases, a deposit is required by the broker in order to transmit the offer to the seller. If the transaction is being conducted directly with the seller, it is highly recommended that a real estate broker or a lawyer be consulted before signing any papers or exchanging any money.
Normally, when signing the escritura or official deed, which needs to be certified by a Notario Publico (notary public), the balance is paid and the property is delivered. This should not take more than 45 days. In certain resort areas, the custom of using “escrows” is being implemented.
“A certificate of no liens” from the Public Property Registry based on a complete title search.
An appraisal of the property for tax purposes.
Based on a present tariff, the bank charges the person requesting a Fidecomiso an initial fee (approximately $800 CAD) for the drawing up the agreement and the trust, plus a percentage depending on the value of the property. In addition the bank charges an annual fee (again, depending on the value of the property) to cover its services as a trustee.