For foreign buyers, the subject of purchasing property in Mexico has been a source of much confusion over the years. One of the biggest misconceptions is that buying property in the country can be a long drawn out process with the risk of losing ownership an ever-present threat. Buying real estate in Mexico is a walk in the park; keeping in mind a few important things will help you get through this process as smoothly and as safely as possible.
The idea that purchasing property in Mexico is difficult probably stems from several years ago when foreign buyers were not allowed to purchase land that fell within the so-called ‘Restricted Zone’. This area covers all land that is within 100 kilometers of the country’s natural borders, 50 kilometers within all coastlines, and certain parts of Baja California. See article from last week to understand more about the Restricted Zone.
Things have changed a lot however and the Mexican government has since liberalized property ownership laws, allowing foreign buyers to purchase property even within the restricted zone. With these policy changes, buying property in Mexico is not only possible but it is also easier and safer than ever.
The two most important things to consider when purchasing property in Mexico is a title insurance policy and a bank trust or fideicomiso. These two documents will guarantee that you get to enjoy all the benefits of property ownership with as little worry as possible.
A title insurance policy is simply a contract between the purchaser-or lender-and a title guarantor that protects the lender or owner against loss in case of a dispute in property ownership. Many reputable real estate companies will offer options for a title insurance policy when you purchase property in Mexico.
A bank trust or fideicomiso, on the other hand, is a contract between the lender, in this case, the Mexican bank and the property buyer. The lender in effect acts as a trustee for the buyer, and they are under legal obligation to follow all the instructions of the buyer pertaining to the property in question. While the lender holds the actual title to the property, the buyer gets to enjoy all the rights and privileges of ownership, including assigning other beneficiaries and even transferring ownership if he so wishes. A fideicomiso typically lasts for a maximum period of 50 years and can be renewed after this period is up.
There are many other things to consider when purchasing property in Mexico, however, with these two important documents in your possession you should be well protected against any risk. If you are unsure about anything, one of the best tools to have in your toolbox is a reputable property management company like Merida Property Management. We are skilled in all aspects of the real estate buying process and can help you navigate through the entire process.
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