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THE BEAUTIFUL EL ENCANTO EN PUNTA MITA LUXURY RESIDENCES
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Mexico offers an exciting, rewarding, safe, and increasingly secure opportunity for real estate investment.
The laws of property ownership in Mexico have changed and now allow non-Mexican citizens to have property rights similar to those in the U.S. and Canada. The real estate ownership provisions in Mexico provide non-Mexican Nationals with greater legal freedoms and real estate ownership rights, opening the market to new sources of investment capital and providing American, Canadian, European, and other non-Mexican citizens with many excellent investment opportunities in Mexico's coastal and inland locations. Purchasing property in Mexico has become easier and more secure.
In addition, beginning in 1994, the Federal Government of Mexico liberalized the ownership provisions of property within the constitutionally protected areas known as the "restricted zone", these are areas located within 100 kilometers along the natural borders of Mexico and within 50 kilometers along the coastlines and Baja, California. To permit foreign ownership in these areas, the Mexican Government created the fideicomiso, which is, roughly translated, a real estate trust. Property rights in the "restricted zone" are executed through this trust in which title is held. This process has been streamlined over the past several years and the process is easy to administer for purchasers of real estate in the "restricted zones".
In these areas, a trust agreement is created for the benefit of the non-Mexican buyer, executed between a Mexican bank and the seller of the property. The bank acts on behalf of the non-Mexican buyer, holding the title to the real property. The bank, as trustee, buys the property for the buyer, then has a fiduciary obligation to follow instructions given by the buyer who is the trust beneficiary. The trust beneficiary retains and enjoys all the rights of ownership while the bank holds title to the property. The buyer is entitled to use, enjoy, and sell the property held in trust at its market value to a qualified purchaser. The trust lasts for 50 years and is renewable in perpetuity.
We recommend buyers understand the laws associated with real estate in Mexico. As we do in the U.S., we recommend prospective buyers of real estate in Mexico consult with a qualified Attorney knowledgeable about Mexico's real estate laws. In addition, we recommend that buyers work with reputable Notarios and professional accountants knowledgeable about Mexico's legal and tax regulations to ensure a safe and secure purchase transaction.
Our Team works with highly qualified and highly experienced title insurance companies that offer title insurance securing your purchase in Mexico. Title insurance assures the marketability of your title and provides you with no-fault recourse in the unlikely event of a problem. The title insurance company carries the potential risks and indemnifies against losses or damages arising from title defects.
We thank Stewart Title Guaranty de Mexico for their assistance in providing extremely useful information on the acquisition of real estate in Mexico. Stewart Title Guaranty de Mexico recommends potential buyers adhere to these principles:
1.) Determine if the seller has the legal ownership of the property and if it can be transferred legally. We recommend to all buyers of Mexico real estate that they obtain Title Insurance for every property that they purchase. We will not represent property or be involved with any purchase or sale transaction that can not be covered by a Title Insurance policy issued by a reputable and well qualified (to undertake Title Insurance in Mexico) title insurance company.
2.) Retain Mexican legal counsel or a highly qualified title insurance company to search the ownership status back to the sovereign.
3.) Have your legal counsel review the buy/sell agreements; this usually determines the transaction's terms and conditions.
4.) Arrange for the title insurance company to handle the escrow of the buyers funds in U.S. dollars through a U.S. banking institution that is located in the U.S.
5.) Obtain a property ownership insurance policy to protect against recording errors, liens, encroachments, taxes, fraud, misrepresentation, and other ownership issues.
6.) If the property is a condominium, examine the documents creating the condominium regime (the regimen de condominio) which defines the owners' rights, obligations, and restrictions.
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We would be pleased to discuss the acquisition and ownership of real estate in Mexico with you in further detail.
Please contact us to discuss your real estate investment interests in Mexico.
Thank you for the opportunity to serve you.
Please contact Bill Gottfried
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