Purchasing Property In Mexico
Thinking of heading south of the border with dreams of homesteading? Don’t know how buying a choice little piece of land to farm could fit into the equation? Well, the great news is that yes, you can do it! Purchasing property in the interior of Mexico is very affordable, very do-able, and an excellent alternative for many reasons (see “secret sustainability” post below…). It’s actually really easy. Here’s how:
1) Obviously, step one is finding your spot. Take your time, do your homework, and take at least a month to travel around the area you’re interested in. Travel by bus is easy and affordable in latin america, the people are incredibly friendly, and there are plenty of others travelers out there who you will meet on the road. Holly and I knew the country fairly well before starting, but still spent a month in a rental car, touring the Pacific coast within 150 miles of a key transport hub, Puerto Vallarta, before settling on the exact spot where we ended up taking root.
2) Once you have a property in mind, be certain to seek out a reputable notario in the area near where you are considering purchasing. Make sure you talk to a registered “notario”, not a regular abogado (lawyer). Also note that real estate agents in Mexico aren’t licensed and there are many agents peddling property without oversight or exclusivity, so if questions come up, the notario is the person to confer with, not a real estate agent. Always check with a Notario first before making a commitment to anyone! Most city’s have english speaking Notario’s available.
3) Once you’ve settled on a place that you know to be titled (having an escritura), have the notario you are working with review all title doc’s to make sure there are no liens. (Usually a small deposit will hold while doc’s are reviewed. Title insurance is available from U.S. based company, Stewart Title).
4) Next have said Notario write up a “Compra y Venta” sales agreement, and then proceed with purchase… Bank $ transfers are straight forward, Titles are usually issued within several days.
Purchasing near the Coast
Condominium properties or titled private properties located in the restricted zone and less than 2000sq meters can easily and safely be put into a Mexican bank trust (Fideicomiso). The process is basically the same as above however title will be issued in the banks name with you named as the beneficiary (trust are generally 99year term & renewable).
For ejido property without previous title, or purchase of larger land tracts in the federal restricted zone (within 50 km of the coast), property purchase can get a bit more tricky. For other, more problematic purchase, almost anything is possible although the process can be long and grueling. Read on…
The following is offered as a quick start trouble shooting guide to any foreign nationals considering the purchase of ejido, or recently privatized ejido property, or property in the restricted zone. Blogger MexDog assumes no responsibility for accuracy as the rules change over time, and even by region/municipality. Make certain to seek advice from at least one reputable Notario before committing more funds than you’re willing to lose!
1) Any deal to purchase property that is still part of an ejido should be considered RISKY. Regardless of what you may be told, using a mexican national as presta nombre (borrowed name) or any other means to purchase ejido property in the restricted zone can never be a fail safe proposition regardless of having Powers of Attorney or a Will in place. While many people have successfully “owned” property for years in the name of a prestanombre, there seems to be increasing financial/development pressure that is making that vehicle for holding property ever less stable over time.
2) The litmus for determining if property is actually private, and not still part of the ejido, is possession of an escritura (title) for the parcela or lot from RAN in name of the ejiditario property owner.
(Note that property can be titled and owned privately by an ejido member (ejiditario) without still being part of the ejido land holdings). Privataization can be accomplished through either the Procede “regularization” or dominio pleno process only). Any deals involving property said to be “about to be privatized” should be approached with extreme caution – if at all.)
4) It is advisable that any deposit money paid should be accompanied by a formal compra y venta agreement, best reviewed by a Public Notario’s office. A formal compra y venta will be drawn up for privately titled property only, not ejido property. Any purchase agreement other than a formal, approved compra y venta shoud be consider extremely risky. Consideration should also be given to the facts that realtors aren’t licensed, escrow accounts are rarely used, and that even deposit money accompanied by a formal compra y venta may be at some risk.
Note here also that even with a compra y venta agreement in place, all members of the ejido are constitutionally entitled to a first right of refusal before the first sale of a property out of the ejido.
5) Final purchase, payment, and transfer of title should be conducted under the supervision of a Public Notario’s office only.
6) Final deeds and ownership will be in the name of either a bank trust (fideicomiso) or mexican corporation, not in the name of the foreign national directly, and title insurance is available once the final deed is issued, approximately 2 to 6 months after closing.