has an umbrella or Master Trust with a Mexican bank for the combined properties of the development. Many foreign investors believe it is beneficial to remain in the Master Trust, hoping to derive protection through the developer’s influence in the industry and locally. We recommend the placement of the property in an Individual Trust for which the buyer is alone responsible. This “fresh” legal basis avoids any legal or financial complications in the event the developing company declares bankruptcy or is dissolved, and allows the buyer complete freedom to advance his property’s interest.
Remember, almost anybody can offer property for sale: abuses and misrepresentations are common. Mexico’s real estate industry is underdeveloped, with few licensing laws regulating real estate brokerage and sales. Again, it is always wise to remember, NEVER ASSUME ANYTHING!

PROTECTION OF THE PURCHASERS INTEREST

All real estate transactions are processed through the office of a “Notario”, a qualified government appointed lawyer who acts on behalf of the government to ensure the proper transfer of all real estate transactions. Among this official’s many important duties is registry with the appropriate government agencies of the deed for transfer of rights of the beneficiary. This is the single most important step in protecting a foreigners investment in Mexico, since it remains the ultimate proof if ownership if a property ever becomes a question.

The purchase/sale document, which includes either deed of rights, or transfer of rights of beneficiary in a property, is generally valid between the parties to a transaction. It most likely contains a description of the property, price to be paid to the seller and any special terms or conditions of the sale. IT WILL NOT, however, provide valid notice to third parties unless it is recorded in the Public Registry office of the municipality in which the property is located.

Until the buyer is formally named as a beneficiary in a public document before a Mexican Notary, title to the rights in the property remain with the last legally registered owner, which would be the seller. While the seller holds title to the property it is his asset; he may mortgage it or sell it again; it may be attached in satisfaction of a judgment; he may die without a will. In such a situation, there may

not be any remedy for the purchaser who neglected to correctly register his deed – his interest, his investment may be lost.

To ensure proper registry of the property, an official appraisal of the property, notarized bank instructions, a property tax certificate, and no-liens certificate must be obtained. Sellers Capital Gains Tax and Buyer’s Acquisition Tax must be paid and the deed transferring rights to the buyer must be registered and stamped by both the tax office (Treasury) and the Public Registry. If this process is not completed the buyer is not fully protected.

BUYER’S FAQ’S

Q: I’ve always heard that foreigners can’t buy coastal property in Mexico, is that true?

No. While it was once true, times have changed. Prior to 1973, foreigners were not allowed to hold legal title or exercise direct rights to real property in an area within 64 miles of Mexico’s borders and 32 miles of its coasts. But laws passed in 1973 and1993 have made it possible for foreigners, foreign firms and Mexican firms with foreign participation to acquire interests in coastal real estate through a bank trust (Fideicomiso).

Q: Who is involved in this bank trust?

Three parties. The seller of the property is the Trustor. The bank is the Trustee. (Fiduciario), and the buyer, or Beneficiary (Fideicomisario).

Q: How does the trust function?

Title to the property is transferred to a trust with a Mexican bank acting as Trustee. The Trust Agreement is formalized by the issuance of a permit from the Mexican Ministry of Foreign Affairs. The lot or home buyer is designated as Beneficiary in the Trust and the beneficiary rights are recorded in the public record by a Notary Public.

Q: What are my rights as a buyer?

The trust is a legal substitute for fee simple ownership, but in this case, the Trustee is the legal holder of the property. As Beneficiary, you have the right to sell your property without restriction. You may also transfer your rights to a third party, or pass it on to named heirs.

Q: Is the trust renewable?

Yes. According to the Foreign Investment Law passed in 1993, trusts can be renewed for an indefinite number of successive 50 year periods. In effect they run in perpetuity.

Q: If at a later date, I decide to sell my property can anyone buy it?

Yes. If the buyer is also a foreigner, you simply assign beneficial rights. If the new buyer is a Mexican National, you can instruct the bank to endorse the title in favor of the buyer.

Q: If the buyers is a foreigner, is his interest limited to the balance of my 50 year trust?

No. Upon application, a foreigner automatically receives his own renewal 50 year permit. This, however, is not mandatory.<

Q: Do many foreigners currently own coastal property in Mexico?

Yes. Today thousands of foreign owners enjoy their ocean side resort property; many have benefited from the appreciation of their property.

(Special thanks to Marco Ehrenberg for writing much of this article)

REASONS TO BUY NOW

We are experiencing a «buyer´s market».

Just a 1 hour easy drive from Phoenix or Tucson. (212 miles) a new highway from Arizona´s border tothe Mayan area and new International Airport is being constructed.

The new coastal highway that connects Puerto Peñasco to Southern California is OPEN!!

Fabolous weather! About 340 days a year of SUNSHINE AND BLUE SKIES!!

Average temperature in the summer is 95 degrees and in the winter 64 degrees.

Fresh seafood and shrimp!