A narrative by JAMES DANIEL BOWERS.
This article originally appeared in "Mexico Living and Travel
Update", Spring 1996-2006 and is presented here with their kind permission.
Even as a tourist you may buy real estate in Mexico. This may be owned
through a Mexican bank trust or in your own name. With a bank trust (fideicomiso)
it is simple to transfer title upon sale through a Mexican notary public.
Beneficiaries may be named in case of death. A Mexican will is not required..
Should you decide to own property in you own name, a deed called an escritura,
must be prepared by a Mexican notary public. In some states in Mexico
it is now possible to name beneficiaries in the deed, but if this is not
the case it is well to have a Mexican will prepared to avoid expensive
legal fees and probate at the time of death.
There are great differences between the United States notary public and
Mexican notary public. In the United States the notary public may be the
local butcher, the new accounts clerk at the bank, the secretary at the
office, or practice any other occupation.
In Mexico, the notary public (notario público) is a public official
appointed by the State Governor. He has the capacity to attest and certify
documents and business and legal transactions that require authenticity.
He also provides for strict security of original records and documents.
Some of the requirements for becoming a Mexican notary public are as
must be a Mexican citizen;
must by thirty-five years of age;
have a law degree;
three years experience working in a notary public office;
must take and pass an examination and
if he passes, in time the governor will give him an appointment.
There is supposed to be one notary for each 30,000 people.
In Mexico, every legal document, such as deeds, wills, powers of attorney,
constitution of corporations, establishment of trusts and other legal
transactions must be made before a notary public in order to be valid.
If the document is not notarized by a Mexican notary public it is not
When buying real estate and you reach an agreement, go to the notary
public first. The buyer chooses the notary public. For real estate transactions
you do not need an attorney. The notary public is completely capable and
legally authorized to carry out the transaction.
In many cases an attorney will delay the transaction, charge you unnecessary
high fees, and have absolutely no bearing on the situation, as it is not
of his competence. Before giving any type of down payment or committing
yourself to a deal, take a copy of the actual escritura (which should
be given to you by the seller with no argument if everything is in order)
to the notary public to check the deed's validity.
If buying property from a developer, have the notary public check to
see that he has his permits for the development and for construction.
A beautifully engraved certificate or formal letter promising a deed at
some future time is not a deed, but merely a sales contract.
Have the notary public determine that the land is not ejido land (communal
agricultural land). The right to use this type of land can be purchased,
but always a risky deal, as it is not your property, you are only allowed
to use it.
Insist on making all real estate transfer agreements before a notary
public.. Do not be pressured by someone who says that you need to put
money down right away.
The notary public will need from both parties to the transaction: proof
of full names, marriage certificates, proof of dates and place of birth,
official identification with a photograph, such as passport or driver's
license, and your visa to prove that you are in Mexico legally.
The notary public will need from the seller: 1. his deed; 2. Up-to-date
tax receipts, water bills, subdivision (fraccionamiento) fees, and any
other public utilities bill, paid up to the date of sale. The notary public
will determine capital gains taxes through an official appraisal (Avaluo).
The capital gains tax, if any, is paid by the seller. However, through
mutual agreement, it may be paid by the buyer. Make sure you know how
much this will be--the notary will inform you of the cost before the transaction,
almost to the cent. Cash or money changes hands the minute the seller
signs over the deed, usually in the notary public's office. The buyer
ordinarily pays notary fees incurred, which also must be paid when the
title is signed over.
The process is not over yet -- the notary public must register the escritura
in the Registro Público de la Propiedad (Public Registry of Properties).
This should be done promptly, as the transaction is not valid until registered.
A normal time frame for this is around two weeks.
Property within sixty-two miles (100 kilometers) of the border and thirty-one
miles (fifty kilometers) of the coast must be held in a bank trust. You
will need a permit from the Secretary of Foreign Affairs.
The buyer may choose the bank that will handle his trust, and may want
to shop around to determine where he can get the lowest fees.
Most real estate transactions in Mexico are not fraudulent. The fraudulent
deals are fairly rare and definitely not the norm. Any transaction done
with a notary public should not have any problems, as he or she is legally
responsible that everything is in order. People who buy real estate in
Mexico often invest their life savings in their "dream" retirement
home, and everyone should be aware of Mexican laws and be cautious.
Sometimes people are so impressed with the natural beauty and climate
of Mexico that they "throw caution to the wind" or "leave
their brains at the border." This has been referred to as "margarita
Another consideration: Is the property you are thinking of buying, readily
marketable should you decide to return to the United States or your native
We have found that most real estate brokers and developers are honest
and above board. Should their sales techniques be like those of a "time
share" salesman pressing for "an impending happening close"
for the transaction, be careful.
Basic safeguards on real estate purchase do not yet exist in Mexico as
in the United States or Canada. There is no credit bureau to check on
the developer's financial condition. It may be difficult to locate liens,
and there is no title insurance.
For the typical person off the street, you need a notary public to hold
your hand right from the first steps of the transaction--a title search
takes him at the most a few days. If there is any potential problem, the
notary public will not foul his good name and will let you know immediately..
Chances are that you will never have a problem when buying real estate
in Mexico. Just be diligent in doing your "homework" and be
a little more cautious!