Owning Mexican Real Estate Is Simple and Safe!

Myth: Ownership of Mexican real estate is difficult, unsafe, or both. This is simply not true!

For over 30 years Mexico’s Foreign Investment Law has allowed non-Mexicans to acquire coastal and border property through trusts that are established with a Mexican bank.

The bank simply holds the deed to the property for you. The term of the trust to 50 years, renewable for additional 50 year periods.

This mechanism was specifically designed to facilitate ownership of Mexican real estate by non-Mexicans, and to protect owners rights.

It is important to know that your Rocky Point property is not part of the bank’s assets and cannot be subject to a lien or attached to bank obligations. You have all ownership rights to the property. The trust is not a lease. It was never the intent that these properties pass back to the government at the end of the trust period, which has been a common misconception and fear of purchasers from the United States and Canada.

Jonni Francis prides herself her relationships with the finest trust-specialists in Sonora State, and her long track record of successful, secure transactions, and happy Rocky Point buyers.

We encourage you to contact Jonni for further information regarding ownership of Mexican real estate and how she can help make your Rocky Point Dream come true not only for you, but for your children and grandchildren!

 

Rocky Point / Puerto Peñasco Real Estate FAQ

Jonni answers to the 9 most frequently asked questions about buying and owning coastal real estate in Mexico.  Click on the links below to view the FAQ:

That’s a Bank Trust. For nearly 35 years Mexico’s Foreign Investment Law has allowed non-Mexicans to own coastal and border property through trusts that are established with Mexican banks.

The name in Spanish for this type of real estate bank trust is Fideicomiso.

This bank trust mechanism was specifically designed to encourage and facilitate ownership of Mexican real estate by non-Mexicans — and to protect owners rights.

  • A Mexican real estate bank trust is not a lease. The bank simply holds the deed to the property for you.
  • Only federally authorized Mexican financial institutions can act as trustees for real estate bank trusts.
  • Your Rocky Point / Puerto Peñasco real estate is not part of the Mexican bank’s assets, and cannot be subject to a lien or attached as a result of the bank’s obligations.
  • All rights that you commonly associate with real estate ownership in the United States or Canada — the right to build, landscape, tear down, rent, sell, etc — apply to your property held in a Mexican bank trust.
  • The term of the trust is 50 years, renewable for additional 50 year periods.
  • It was never the intent of the Foreign Investment Law that properties held in a Mexican bank trust pass back to the government at the end of the trust period — which has been a common misconception and source of unwarranted fear for purchasers from the United States and Canada.
  • It is worth noting that many wealthy Mexicans own real estate through bank trusts — both inside and outside the restricted zone — for tax or financial planning reasons, which is certainly a testament to their faith in the security of the mechanism.

Click on the link below to view the next FAQ.

All real estate along Mexico’s borders and coasts — including Rocky Point / Puerto Peñasco — falls within what is termed the Restricted Zone.

The restricted zone includes all real estate that is within 30.5 miles (50 kilometers) of Mexico’s coast, or 61 miles (100 kilometers) of Mexico’s border with any other nation — the United States, Belize and Guatemala. Within this zone non-Mexicans can own real estate, but are required by Mexico’s Foreign Investment Law to do so through a bank trust.

The concept of special property ownership rules that apply to coastal and border areas is generally unfamiliar to Americans and Canadians. For many Europeans it is not unfamiliar at all — a number of countries in Europe have similar real estate ownership mechanisms.

Not in Rocky Point / Puerto Peñasco — or anywhere else within the restricted zone at this time.

If the real estate you are interested in lies anywhere outside the restricted zone (for example: Alamos, Guadalajara, Hermosillo, Mexico City, San Miguel de Allende, etc.) you can buy property on a fee simple basis, and it is both legal and common for Americans, Canadians, Europeans and other non-Mexicans to own property in Mexico outside the restricted zone without bank trusts.

The restricted zone — article 27 of the Mexican constitution of 1917 — was designed to help protect Mexico from invasion by creating a buffer zone that leaders of the time thought was sufficient to discourage invading armies.

While invasion is certainly a very unlikely possibility today, Mexico has experienced a number of invasions, wars, and tremendous losses of territory in its history. The ownership mechanisms currently in use close to Mexico’s coasts and borders are a legacy of that history.

For a non-Mexican real estate investor considering purchasing property in Rocky Point / Puerto Peñasco, the important thing to remember is that Mexico’s Foreign Investment Law was designed to facilitate the safe acquisition of coastal and border properties by non-Mexicans — and specifically designed to protect foreign owners rights.

A notario is a person with knowledge of Mexican real estate law who is involved in aspects of preparation and validation of paperwork associated with real estate transactions. Notarios are are not necessarily lawyers, but many are.

There is a notario involved in every real estate transaction in Mexico. It is important to remember that a notario cannot represent you in your real estate transaction, and not to confuse the role of a notario — who may offer legal advice, but who cannot represent you — with your real estate agent, broker or attorney, who are solely your advocates.

Real estate bank trust maintenance fees are generally modest, but there is a fairly wide range. At this time Mexican banks in Rocky Point / Puerto Peñasco charge between $400 and $875 annually for holding a real estate deed of trust.
Simply stated, NO!

Non-Mexicans buying Rocky Point / Puerto Peñasco real estate should always work with an licensed real estate agent and brokerage licensed in Mexico and never buy directly from an owner.

There are several reasons why I offer this advice, and they are not rooted in mistrust of anyone’s motives.

Whatever the intent of the seller — and whether the seller is Mexican or non-Mexican — Mexican real estate law is simply different from what Americans, Canadians and Europeans are used to.

Add somewhat unfamiliar transaction mechanisms and forms — and often language / communication issues — and you greatly increase the possibility for misunderstandings as the transaction progresses (or not…) and for creating potential issues down the road.

Buyers representation is free, and securing free Rocky Point / Puerto Peñasco buyers representation from long-established real estate professional like myself and premier brokerages like Rocky Point Realty Group provides you the assurance that all of the due diligence and paperwork related to your real estate is in order, and that your purchase will be completed rapidly and smoothly.

Whether you allow me to represent you or not, it is very important that the agent and brokerage you choose be accredited members of Rocky Point A.M.P.I., our chapter of the national organization of real estate professionals in Mexico.

Your real estate agent also needs to be registered with the Sonora Real Estate Agents Registry. It is not rude to ask for proof of registration.

And remember: all this great help is free!

A.M.P.I. — Asociacion Mexicana de Profesionales Inmobilarios — is the largest association of real estate professionals in Mexico.

Founded in Mexico City in 1956, AMPI has more than 1,500 broker members who in turn represent over 10,000 real estate professionals throughout Mexico. AMPI members include not only brokers and real estate agents, but appraisers, developers and other real estate professionals.

A.M.P.I. is dedicated to the continuous improvement of real estate practice in Mexico, and works together with federal, state and municipal authorities to refine laws and regulations directly related to real estate transactions.

AMPI certifies real estate agents, brokers and brokerages. Sonora State has arguably the most advanced certification program in Mexico, and AMPI certification is a legal requirement in Sonora for those brokering the sale of real estate.

It is also worth noting that — as a result of the continuous improvement of coordination and cooperation between real estate professionals in Mexico, the United States and Canada — that all A.M.P.I. members are also members of NAR, the National Association of Realtors.

I have been a a proud member of A.M.P.I. in Rocky Point / Puerto Peñasco since 2008 and am currently privileged to be Vice President of the Broker Council.

You won’t need to independently find and hire a Mexican attorney, but you will have expert legal counsel.

Experienced agents and A.M.P.I. brokerages like Rocky Point Realty Group are already working with good Mexican attorney’s and experienced professional title processors. It is the responsibility of your agent and brokerage to introduce you to the legal resources that you require.

Really, this is no different than a real estate transaction in the United States or Canada where it is expected that the purchaser of a property have proper legal representation and counsel throughout the process.