Owning Land in Mexico
Owning property in Mexico is safe and easy. Foreigners are able to invest in Mexican real estate through a bank trust called a Fideicomiso,
(pronounced fee-de-ko-mee-so). This is a safe, simple, and fully renewable Mexican Property Trust, which enables foreign investors to own
property in Mexico in what is called the "restricted zone" (within 60 miles of the border or 30 miles of the coastline) . Like an estate trust,
the Fideicomiso gives the purchaser, all rights of ownership.
How a Fideicomiso Works
With a Fideicomiso, a permit is issued to a Mexican bank of your choice by the Mexican Department of Foreign Affairs. This makes the selected
bank the trustee, thus making you the beneficiary of that trust. Ownership of the property still belongs to you, but the bank acts as the
trustee, as it would in the case of a living will or estate trust.
As the actual beneficiary and owner of the property, you have the usual ownership rights over the property, which means that you can:
1. Use / occupy the property
2. Build on the property
3. Improve the property
4. Sell the property (through instruction to the trustee)
5. Bequeath the property in a will
The trust term is usually fifty years, and it is then renewable in fifty-year periods. The substantial length of the trust means that you won't
have to worry about regular renewals.
The simplicity and convenience of a Fideicomiso means that it is now easy to enjoy the many benefits of Mexico real estate ownership. The Mexican
Property Trust provides a safe and effective solution for those that want to enjoy ownership of property in Mexico's "restricted zone", with
minimal hassle.
History of Land Ownership in Mexico
To really understand how ownership in Mexico works, it is important to understand the history of property ownership and its evolution in Mexico.
If you picture a country that has been dominated by foreign owners since the early 1500's, you will begin to see why Mexico is so protective of
its most valuable resource...land.
In 1517, when Hernandez de Cordoba sailed from Spain to the Yucatan Peninsula, foreigners laid claim to Mexican lands for the first time. Spain
decided that since they had landed here, it was now theirs. It was not until 1822 that Mexico declared its independence from Spain, much like
the U.S. declared independence from England, but even with this new independence, the lands of Mexico were still owned by wealthy foreigners-
the Mexican upper class and the Catholic Church. Porfirio Diaz, a former President of Mexico for over 30 years, nearly sold all of Mexico to
foreigners during his term which enraged the peasants.
The result was the Mexican Revolution, which cost over one million lives and was the basis for the Federal Constitution of 1917. The new
constitution imposed new laws and restrictions on foreign ownership and ownership of lands by the Catholic Church. Article 27 of the constitution
allows Mexican Nationals and Mexican Companies to own property, however it restricts foreigners from owning land within the "restricted zone".
It is also said that the U.S. was involved in this new zoning in an effort to prevent the installation of foreign military bases on our borders
or near our coastlines. This "restricted zone" is defined as property within 60 miles from any Mexican border or within 30 miles of any Mexican
coastline.
Not until the 1930's did the Mexican people truly see the property being returned to them. President Lazaro Cardenas disassembled the large
property holding and distributed them in the form of cooperative farms or "Ejidos". The people were allowed to farm and cultivate the land and
receive the profit from their efforts, but they did not own the land. After nearly 400 years, millions of acres of land was back in the hands
of the Mexican people, however, it was still owned by the Mexican Government.
Even though the people were allowed to farm the properties and profit from their work, it was not until 1992 that they were given the opportunity
to sell the properties. The 1992 Agrarian Law recognizes property rights within the Ejido and allows for the owner of record to sell or lease
the property to a non-Ejido member. The property can be removed from the National Agrarian Registry (removed from Federal Control) and placed
in the public land registry allowing it to be sold or leased. Today, thousands of acres are being removed on a daily basis from the Ejidos,
added to the public lands, and being sold or leased. Well over 50 million acres of these lands will go through this process to be either leased
or sold over the coming years.
Title Insurance
A title search is a summary of recorded documents on a particular property and is extremely important for a buyer in order to know the true
condition of title before making any investment decision in Mexico. Our team of Lawyers do a thorough title search regardless of whether the
client will seek to obtain a title insurance policy. A title search is a prerequisite to obtaining a title insurance policy. A policy of title
insurance is a contract by which a title insurance company agrees, subject to the terms of its policy, to indemnify (compensate or reimburse)
the insured against any loss from defects in the title. The title insurance company agrees to defend, at its own expense, any lawsuit affecting
the insured title. We at Baja Surf Properties recommend using First American, Stewart Title, or International Land Title for title insurance
needs.
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