Real Estate & Estate Planning
Estate Planning Attorney in Mexico
If you are a foreigner national with investments or residence in Mexico you should know what steps to take in the event of death in Mexico.
We advise clients to prepare for the possibility of mental disability and eventual death, beyond a last will and testament, we work with the client to develop a plan to mitigate taxes or paperwork, to ensure that your life’s savings and assets will go to the beneficiaries you choose after your death.
We can prepare you Mexican trust to ensure your beneficiaries rights and minimize the tax and paperwork burden. We can prepare power of attorney and health care directives, arranging for someone to take care of your affairs in the event you should ever become mentally incapacitated.
Real Estate and Estate Planning
REAL ESTATE CLOSINGS AND FIDEICOMISOS
If you are buying property anywhere in the Baja California peninsula, it is in your best interest to consider the following information.
There are only two legal ways in which a foreigner can own real estate in Baja:
- Mexican Corporation*
*Unless you are serious about having a business in Mexico DO NOT set up a corporation just to hold Real Estate, this is no longer a good option.
What is a FIDEICOMISO?
It’s a real estate contract whereby a foreign national acquires the benefits of using an immovable asset located within the Country’s restricted area for a period of 50 years. This trust may be renewed when certain conditions are complied with. Title of the property in question is held for a fee by a Mexican bank officially authorized to celebrate this type of transactions.
Under Mexican law the beneficiary of the trust (i.e. the foreign national) may lease, sell or transfer the beneficiary rights in question, in compliance with the applicable statutes. The official involvement of a Public Notary is of the essence in the entering of a Fideicomiso. This cumbersome system which has been in operation since 1973, was legally devised to allow foreigners to have the beneficiary rights in question when one considers that, pursuant to Article 27 (I) of the Constitution of Mexico, foreigners are prohibited from acquiring any direct ownership over any immovable assets located within Mexico’s Restricted Zone. This kind of trust contract allows foreigners to enjoy Real Estate located along the Mexican coastline without violating Mexico’s Constitution.
Fideicomisos are legal contracts between the buyer and the Bank, these contracts are valid for 50 years, which means your are subject to their terms for that period of time, unless you change banks (which is very expensive in most cases!).
Please do not make the assumption that the Real Estate Market and practices are the same as in the United States or Canada. First of all; in these countries the Fideicomiso is not used as it is here in Mexico. Even though the Fideicomiso is similar to a US trust, it is very different and follows different rules. Second; Real estate agents are not legally licensed in Mexico, therefore a foreign buyer cannot depend on the normal safeguards that would apply in a Real Estate transaction in the United States.
A real estate agent is a great help for finding you the right property, but only an attorney is licensed to provide legal advice.
The Attorney´s Role in Real Estate Transactions
When most people consider buying real estate property in Baja California Sur they usually don’t consider the legal procedures involved in this type of transaction, as a result, a lot of the times they end up buying irregular property and soon after, the problems begin.
The legal aspects of this type of transaction must be supervised by an attorney. The attorney will:
- Make sure there are no liens or encumbrances affecting the property.
- The seller’s property rights have not been limited.
- The registered owner of the property is not deceased. No probate in process.
- Make sure there are no property taxes or others owed.
- Property is not affected by any legal procedures pending.
- Make sure the buyer can legally acquire the property.
- Inform the buyer of the different options to purchase property.
Most common problems are property seizures, litigation in process or faulty deeds. An attorney is qualified to know what the exact situation of the property is and if can be fixed, giving his/her experience in this field.
Another very common problem is buying Ejido property without obtaining “derecho de tanto”. A lawyer can determine how risky the purchase can be.
If the property is sold by a corporation, the most common problem is the lack of legal capacity of its representative for such a transaction.
The attorney will be able to inform the buyer if the property is affected by any government restriction such as future expropriation for urban development, roads or any government plans. An attorney can anticipate such complications.
Besides the above, the attorney will make sure the metes and bounds of the property match the documentation.
Remember, investing in real estate is a long term investment; you want to make sure it’s as free of problems as it can be.
An attorney cannot be replaced by a Realtor or broker as he/she has no interest of gaining a commission if the property is sold whereas the broker is interested.
Don’t try to save money buying problems. Secure your investment by hiring a professional to assist you throughout the purchase process.
If you want to learn more of the attorneys work in a real estate transaction, contact us.
If you are purchasing property, contact us immediately.
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