It’s the Law (Mexican Style)

September 2, 2008

It’s the Law (Mexican Style)

First, let me give you a disclaimer. While I was/am an Attorney in Texas (now in inactive status) with the State Bar of Texas I do not hold myself out as an expert on Mexican Law. So, the below information should not be relied upon in making important decisions in your life like spending money in Mexico.

Always best to get competent legal advice. OK, I cut the legalize to a minimum.

The information I’ll relate below is based on my Internet research and personal experience and is provided here just to give you a starting point to determine just what the law is in Mexico as it applies to you and your particular situation.

A lot of real estate law in Mexico is based on the Mexican Constitution of 1917.

The Restricted Zone: 100 kilometers (about 62 miles) from Mexico’s international borders and 50 kilometers (about 31 miles) from its coastline.

 

You can’t have a direct deed in your name in these areas unless you’re a Mexican citizen.

 

Here’s what the lawyers have figured out to get by this restriction. You can use a trust in which you are the beneficiary of the trust and the trustor is a Mexican Bank which holds the legal title.

 

The bank charges an annual fee for doing not much more for you than holding title. The yearly fee usually runs about $600 USD.

 

You can sell your interest in the trust. You can do pretty much everything you could do if you were the legal owner as opposed to being the beneficiary of the trust. You are more in the nature of an equitable owner. But that’s beyond the scope of this article.

 

The Big Hotel chains and other businesses find it useful to form a Mexican Corporation (a legal entity in Mexico which can among other things own land and its improvements in Mexico even in the otherwise restricted zone.

The corporation can now be 100% owned by foreigners.

Ejido Property: The Agrarian Law of 1992 permitted the privatization of these communal farms.

I advise staying clear of any property considered Ejido property.

Mexican Federal law controls and can trump State Law so extreme caution should be exercised.

Justice Scale

Yes, it’s possible to eventually in some circumstances to get good title to this type of land. Here’s a short summary of some of what must be done first.Privatization process, vote of 75% of ejiditarios. Hard to do. Then title is issued. Review this in the Agrarian Registry.
Again, the best answer is stay away unless you know what you’re doing. This is for the Big Boys.

The Federal Zone:The federal maritime land zone consists of the first twenty meters of beach-front property on firm traversable ground. The twenty meter distance is measured from the high tide.

In our area the Federal Zone law regulates Lake Chapala Waterfront property. As I understand it locally there’s a Federal Zone from where your property line ends and the water line begins.

You can apply for a concession in which you are allowed for a yearly reasonable fee to use the Federal Zone land adjacent to your property.

As I understand it you get to restrict others from the Federal Zone and use it as if it belonged to you. If you improve it in any way of course the improvements don’t belong to you as you’ve chosen to improve the government’s property, but as long as your concession is current you get to use the improvements and keep others from using them.

Boat docks, Picnic tables and benches and the like come to mind along with fences to keep others out. If the fence extends too far into the water before or after the lake rises you might run into trouble with the authorities which are charged with keeping obstructions out of the water for boating safety. Again get some professional legal advice.

Notaries:In Spanish the term is “Notario”. The Notario is not a Notary Public even though the name is similar. I hear Texas even has a law that a Texas Notary Public can’t use the term Notario in advertising in an effort no doubt to protect it’s Spanish speaking residents from thinking the Notary Public is some type of Attorney or Lawyer.

A Notario in Mexico first has to become a lawyer and then he/she studies under a Notario for a year and then takes the exam and then can be appointed by the State government which controls the number of Notarios that are permitted.

Most foreign residents only exposure to dealing with a Notario will be when they transfer title to property. They do not issue any formal insurance of any kind that the title is good. Instead they have their reputation on the line and have every reason to be sure the title chain is good.

They risk being sanctioned by the government which can be a suspension for a limited or unlimited time. (Like being disbarred)

Title Insurance is available, but expensive. The title insurance policies have exclusions that are not covered. I’ve never been involved in a closing a property sale where title insurance was involved and I’ve been involved in a bunch of them.

Now, please if you represent  a title insurance company I’m not recommending that people do not get title insurance, but merely relating my personal experience so please no hate e mails.

In the USA I would never close a home I planned to live in without title insurance, but there, the lawyers who draft the documents don’t check the title and the fees at least in Texas are regulated by the government and are much more reasonable in my opinion.

Notarios also draft wills and handle all probate matters in Mexico.

You may choose in your deed to name a beneficiary of your portion of the ownership to take effect upon your death. You may not choose anyone you want, but you may choose  a natural parent or parents, natural child or children or your spouse.

Sorry, no girlfriends or boyfriends or step kids are permitted in the deed. Of course if you don’t name any of the permitted person or persons in your deed you should ahve a will to cover your ownership interest.

This article is being published in September and September is “Will Month” in Mexico when the Notarios will give you a significant discount if you have your will done this month.

This is a long standing tradition in Mexico ( I think in an effort to allow persons of modest means a once a year opportunity to take care of this important piece of business.) But you don’t have to be poor to take advantage of the tradition.

Now that you just saved significant money on your will needs why not pass the savings along to one or more of our many worthwhile local charities like the Cruz Roja or the Love in Action folks.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Email for more information:
Sid@ChapalaClub.com

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