Important Disclosures

Real Estate License in Mexico

In Mexico, as opposed to the USA, Canada and other countries, executives are not required a state license to promote and represent you on a real estate transaction, Here at Selva & Co Realty we have two ways around that to ensure your peace of mind. First, we have a Mexican standard business license and are legally able to operate as a broker. Second, before any type of legal commitment, Agreement or LOI, a legal representative is highly advised to ensure the property you are considering is legally marketable with no encumbrances. In this case, Selva & Co Realty can recommend a list of attorneys including First American Title Services.

MLS System in Mexico

MLS system in Mexico does not exist. There are many sites that use the term to emulate a similar MLS system like that in the USA or Canada. The databases you see online are only to give you an idea of what is out there in the market. Information may not be accurate, updated and some cases even reliable. Here at Selva & Co we understand the international real estate discrepancies and thus work around it through our extensive and well establish relationships with other real estate agencies to make your buying process smooth and safe. Let us do all the legwork for you and seize your time by letting our executives emulate an MLS search for you.Inquire now

The Condo Market

Playa Del Carmen and the Mayan Riviera are currently experiencing an unprecedented boom in the Resort Condo Market. In the last 5 years the Mayan Riviera has growth significantly and thus getting the attention of many developers who are looking to profit by building outstanding properties with resort amenities, quality interiors, ocean views among others. Most resale properties in the area where built 5 to 7 years ago and where not built with today’s demand in mind, lacking basic amenities like parking, a decent kitchen, elevator, etc. This has led us to the conclusion that the true-value of the market today is on the pre-sale and brand new developments. This are all properties who are being built with style, creative layouts with wide spaces, ocean views, amenities of a luxury hotel, spa-fitness centers, pools and gardens even having an elevator do make a difference. Here at Selva & Co Realty we only focus on the very best the Mayan Rivera has to offer, we do all the legwork to ensure you are expose to your best picks so that you make an informed, safe and educated choice. Contact us today

The Re-sale Market

The resale market in Playa Del Carmen is a complex subject that requires a special attention. Due to the ambiguity of the market, working with re-sales can be a challenge for you the buyer, especially when you deal with a Non-regulated real estate market. Sellers are not required to abide to a code of ethics and practices and in most cases list their properties with unrealistic prices with no grounds; in most cases is a matter of pure speculation, there are also cases where the seller is trying to sell a unit with no title, liens or encumbrances. This situation can be time consuming for you the buyer who is not aware and familiar with all the steps. Here at Selva & Co Realty we have the solution for you. Just as on the MLS search, we can work with re-sales that pass our highest standards whether construction, location or legal status as well as other factors like being reasonable priced. This would ensure you deal with absolute safeness and peace of mind when considering a Resale unit. Contact us today to learn about our buyer representation services. 

Bank Trust

The "fideicomiso" is set up through a Mexican bank for a period of up to 50 years and can be renewed for 50 years. To acquire the land the purchaser must obtain a permit from the Ministry of Foreign Affairs. The buyer can lease, sell or transfer the property to another family member, and if he dies, his property can be passed to an heir.

In the trust there are three elements: The trust Settlor (Fideicomitente) which may be a physical or legal Mexican person, who is the owner of the property which is to be placed in trust; the Trustee (Fiduciario) which, by law may be only a credit institution and which holds the raw real estate; and the Beneficiaries (Fideicomisarios) the legal or physical foreign persons who are the beneficiaries of the trust who obtain the use and benefit of the property.

The bank (known as the trustee) holds the trust deed (known as the escritura) for the person or persons purchasing the property (known as the beneficiaries). This property is not part of the bank's assets and cannot be subject to any lien or attachment for any bank obligations. The beneficiary has all ownership rights to the property and may sell, lease, mortgage or pass on to their heirs as desired under law. A bank trust is not a lease. The Mexican government established the trust agreement as a way of protecting foreigners interested in owning property in Mexico. The reasoning was that by making ownership pass through the trust process, there would be an automatic review of the transaction to ensure it was legal and unencumbered. The bank is required to check ownership, insurance and indebtedness of the property, providing further protection to the foreign owner.

Trusts are renewable at any time by filling out a simple application with the bank. It was never the intent that these properties pass back to the government at the end of the trust period. This is a common misconception and fear of most buyers. It may help in understanding the Bank Trust to compare it with the Deed of Trust, a type of financing instrument used in the U.S. People who buy homes, paying the full amount upfront, receive their titles right away. However, this rarely happens. Under a deed of trust the buyer of a house has only "equitable title," or an equity interest, with the right to use but only a restricted right to sell, until the loan is paid off, after which the owner receives the actual fee simple title. Until then it is held by a trustee, usually a bank or title company. In Mexico the Bank Trust is also held by a trustee, but the buyer never receives the actual title. Realistically many homeowners in the U.S. never receive title to their properties either, because they sell or refinance their homes before the 30-year term of their loan is complete.  

Purchase Procedures

One of the first things you should request when purchasing property in Mexico is a copy of the lien certificate (certificado de libertad de gravamen) on the property. It should indicate the owner of record, surface area and classification of property type, the legal description, and whether there are any liens or encumbrances filed on record against the property. The buyer can also request a certificate of no tax liability (certificado de no aduedo) from the local taxing authority.

Legal Steps To Purchase Real Estate In Mexico:

1. Offer and acceptance and/or promissory agreement
   In accordance with Mexican Law, a letter of intent fulfills the requirements for it to be considered to be a valid contract, with the condition that there has been mutual consent on the part of both the seller to transfer a specific property and the buyer to acquire it.


2. Title Search and Conditions of the Property
   This will ensure that none of the information of the Public Registry of Property and Commerce regarding the property is overlooked.


3. Requirements for closing and formal execution of a standard real estate Transaction in Mexico:
   Certificate of No-Encumbrances: This certificate will enable the Notary to assess that the property does not have any lien or encumbrance, or any claim pending over it, and thus can be transferred with a clean title. It is obtained directly at the Offices of the Public Registry of Property and Commerce and basically it must contain at least the following information: I) the number of years of documented history made on the property; II) the surface area of the property in accordance with the records; III) the metes and bounds of the property; IV) the name of the owner; V)classification of the property (urban or rural); VI) a legal description of the property (such as if it is owned in a trust or by several owners); VII) the name and signature of the registar and VIII) the official seal of the Public Registry of Property and Commerce.
   
   Certificate of No-Tax Liability: This certificate will enable the Notary Public to assess that the property tax has been paid prior to the transfer of the property.
   
   Property Appraisal and Site Survey: In accordance with the Real Estate Law ("Ley de Catastro"), it is mandatory to carry out a site survey on the property and do an official appraisal. The appraisal must be done estimating the commercial value of the property, considering its surroundings, a market survey and zoning regulations.


4. Notary Public and Public Registry of Property and Commerce
   The function of the Notary Public is to act as an extension of a Judge or the Government. His duty is to ensure that a real estate transaction is formally executed in compliance with all legal requirements. Upon the execution of the transaction, the deed of title must be recorded at the Public Registry of Property and Commerce of the domicile in which the real estate, subject matter of the transaction, is located.
   
   A Mexican "notario" is an attorney who, after passing rigorous examinations, is commissioned by the government as a public notary. A notario holds high office for life, unless he or she is removed for cause. The notario fulfills a public function delegated by the government. Although licensed as an attorney, the notario is not in a position to provide either of the parties with legal advice. The notario's responsibilities include collecting and reviewing the sales contract, property tax and water payment receipts; ordering a bank appraisal: freezing the property's file at the local public registry (no documents may be recorded in a property's file during three consecutive thirty-day periods); reviewing the property's file to verify the legal ownership and search for liens, encumbrances or anything that could affect the title (as the majority of public registries are not automated, this procedure can take from 60 to 90 days); requesting the public registry to issue a "Certificado de Libertad de Graveneres" (Certificate of Freedom from Liens and Encumbrances); and performing the closing at this office where the notario handles the transfer of the deed, tax withholding on the underlying real estate transaction, and the recording of the documents at the public registry.

The Most Common Choices For Purchasing Real Estate In Mexico:

1. General Purchase Sale Agreement
   A purchase sale agreement occurs when one of the contracting parties obligates itself to transfer the ownership of property and the other agrees to pay a certain price in consideration of the property rights. The contract is perfected and binding between the parties as soon as the property and its price are agreed upon, even when the property has not yet materially been delivered and the price paid. All such contracts must meet specific requirements in accordance with Mexican law in order to exist and be valid.
   
   There are two types of elements to the contract:
   
   On the other hand, the buyer's principal obligation is to comply with the payment of the price in the terms place, and form agreed in the agreement.
   • Essential Elements: The essential elements of any purchase sale agreement: consent which is granted by the seller's agreement to transfer the real estate to the buyer, and in turn, the buyer's consent to pay a certain price; and object which is the purpose of the title transfer of the real estate on the one hand, and the payment of a certain price as consideration of the transfer.
   • Validity Elements: The validity elements are: legal capacity that refers to the legal rights of the parties to enter into the contract; and legal form, which are the formalities with which a transfer complies in order to be perfected. For example, real estate transactions must be in writing, and in order for such to be binding before third parties, they must be recorded at the Public Registry of Property and Commerce. Basically, the fundamental obligations of the seller in a purchase sale agreement, are: a) to deliver the property being sold to the buyer; b) to guarantee the quality of the property; and c) to guarantee the title (with cure in case of eviction).
2. Installment Sales Agreements withholding transfer of title:
   In this kind of agreement, the seller reserves title of the property until full payment of the sale price is made, but the buyer may use and enjoy the real estate until full payment is made. Usually, this kind of agreement includes installment payments. There are some advantages in using this kind of agreement: First, the agreement can be recorded at the Public Registry of Property and Commerce as being enforceable and binding before third parties. Second, the seller is not able to sell the property while the purchaser is in compliance with the sales agreement, usually meaning that he is current in his payment obligations to the seller. Finally, the obligations of the parties are subject to what in Mexican Law is commonly known as "Condicion Suspensiva" (suspensive condition), which conditions the agreement to full payment of the price to the seller.
3.  Irrevocable Real Estate Trust Agreement:
   This is better known as a "fideicomiso" and is the most common instrument for the acquisition of real estate property within the restricted zone, usually for residential purposes. The seller, "trustor", will transfer property to a Mexican bank institution, the "trustee", by means of an irrevocable trust agreement. The trustee will hold the property on behalf of a designated beneficiary (usually the buyer). The bank is obligated to administer the real estate only for the benefit of the beneficiary, who holds the right of use and enjoyment of the real estate, as an owner. The bank holds title to the property but the beneficiary is entitled to use it and even sell the property held in trust to any eligible buyer, providing that he instructs the bank to do so.

Contract Legalities

A legal real estate contract has 5 necessary parts:

1. Competent parties - This is usually defined as "being of legal age and sound mind." In Mexico another factor comes into play--language. A person who doesn't understand Spanish, the legal language of the country, no matter how mature or intelligent, is not competent in any practical sense. Therefore, the contract must be translated into English.


2. Lawful Objective - This means that contracts can be voided if it is discovered that the intent has been to set up a drug business, a house of prostitution, or some other illegal operation. If one doesn't own a property, it can't be lawful to try to sell it.


3. Offer and Acceptance - This means that a contract must be signed by both parties. It must also have a date when it takes effect and must specify the place where it is signed.


4. Legal Description - Legal descriptions can take several different forms--metes and bounds, lot and block, government survey--but the key is that the property must be readily identifiable.


5.  Consideration - Consideration accompanies a contract as an evidence of good faith. It usually means money, although it can take the form of a promissory note, another piece of property, an item of value like a car or boat, or even such an intangible as "love and affection."