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REAL ESTATE - Expression in Mexico Real Estate that Lead to the Wrong Impressions


After reading a few articles, written by persons who either are affiliated with Real Estate sales or are themselves salespersons leading the reader to beleive that what they write is the truth I decided to put the record straight so as to properly inform the reader about the following expressions.

A) “.... a Real Estate agent or broker is the competant person to do a “Closing process” on a Real Estate property and that there is no need to hire a lawyer in Mexico.” 99% of the salespersons, who call themselves professionals but were never declared professionals in Mexico, are not competant in legal matters in Mexico, one has to be an expert in the complexity of the laws (Civil, Mercantil, Tax, agragrian, envionmental administative etc etc.,) so as to provide a secured document to a buyer by which he can have peace as an owner of either Real of Personal Rights and, in Mexico the only person who can formally draft the final document is a person who is called “Notario Publico” which is the equal to a Contract lawyer in the United States of America and Canada or is equivalent in the English legal system (Common Law) who is knowed as a Solicitor thus the statement must be declared not misleading but false.

B) “...virtual closing..” which means that “closing” can be done by using a virtual system such as fax or the Internet. In many countries a fax and / or internet mail is recognized as documents as good as the original but in Mexico it is not, virtual signatures have not yet been recognised as valid by the government and by the Notarios Publicos as it was stated in an article written in the official Journal called “ESCRIBANO” published by the “Asocinacion National del Notariado Mexicano; A.C.(National Association of Mexican Notarios Publicos) thus anyone doing a closing, or any proceedure which requieres signatures, using this type of document transmission is putting at risk the buyer and the seller because, the rule is that all documents emitted in Mexico required by a “Notario Publico” must either be originals or Certified copies. Furthermore any foreign document and its anexed must be presented to the autority who can apose an “Apostille” or a Certification of validity by a Mexican Counsulate or Embassy. Any documents signed outside of Mexico must have a declaration and seal aposed by the autority that can certify that autencity of the signature (a notary in countries which have the Common law system or Comissaire à l´asermantation such as in Quebec, Canada) which certifies that the person who signed the document presented proof that he is who he says he is. The final step for foreing document is the translation, by a certified translator, in Spanish. In other words it is impossible to do virtual mutation of Real of Personal Rights on a Real Estat property in Mexico using virtual documents.

C) “...Bank Trust...” In Common Law it is very well established that a Trust is not a contract. In Roman Law, which is the base of the legal system in Mexico, the document which will provide Personal Rights (Usus & Fructus) on a real estate property is a contract and in all the laws of the country the word trust does not appear...thus the expression is not legally valid and should not be used when describing to a potential buyer the document by which he will aquire Rights.
Allmost all real estate salespersons say and use the term “Bank Trust” in their publicity and in their Offer of Purchase contract instead of using the proper term which is “Fideicomiso Translativo de Dominio” abreviated to FTD contract by which a buyer will have Personal Rights on a Real Estate propery thus leading the client to beleive he will have a Trust when in reality the document will be a contract. Thus in fact putting at risk the buyer because if ever one was to present a lawsuit based on a TRUST when in fact the lawsuit should be based on a contract one would see his case rejected by the Court.*
D) “...Title insurance...” In Mexico a “TITULO” which is translated in the Oxford and other diccionaries as “TITLE” is only issued by a government authority (Federal, Municipal or State) and signed by the head of the govermental institution which emits it. Any document following the emission of the “TITULO” is called “Escritura” which can be translate as “Writing”.
This been said, if one buys an insurance policy by which one will be compensated if one can prove that there is a defect in his Title one must have a Title; the problem is that in Mexico if one has the Mexican nationality one does not get a Title but a document which is called an “Escritura” and foreigners get a “Fideicomiso Traslativo de Dominio” contract (FTD contract), thus the need to carefully read the policy because if one goes to Court asking to be compensated by the insurance company in virtue of a “Title Insurance policy” one must indicate to the judge that in fact he has a Title otherwise the judge would have to reject the claim based on the fact that no Title could be exibided and one must remember that foreingers do not have real Rights “ownership” but only personal Rights (Usus & Fructus) over the property.

In Mexico, as anywhere else one must protect himself against fraud and one must make sure there is no defects in the “Chain of Events” from the time the first document, which provided Rights to a person who acquired the Real Estate property up and until the last transaction. To achive this a full research of all the transactions must be done and the only persons who are competant to do this are people who studied law and are trained to find the defects in the registered documents at the Real Estate Property registry office which is called “Registro Publico de la Propiedad y Comercio” (Public Registry of real estate property and commerce) in Mexico. “Notarios Publicos”, (Contract lawyers), have the only obligation to verify at the Registro Publico de la Propiedad y Commercio who is the present owner at the time of the transaction THUS the need to have a seperate independant lawyer, who specializes in Real Estate investigation closing, to do a full research up and until prescription abolishes ones Rights so as to find out if there are one or various defects in previous transactions, that the Agragian law (Ley Agragria) requirement were respected and that there are no mistakes in each and everyone of the final document which were drafted previously. So as to make sure that the report is valid in case of any reclamation the person who did the research must sign a document which certifies that he did his job and garantees that there is no defects which could cause agrevations to the buyer.

In conclusion, one can only be certain that he can rest in peace with either an “Escritura” or an FTD contract if one uses the services of a lawyer once the real estate salesperson did his job and awaits his commission.

*: For years the autor has been preaching this and finally one can see that BBVA / Bancomer bank does not mention “Bank Trust” anymore in their publicity when talking about Real Estate property purchases by foreigners in the restricted zones and some contracts are now indication the proper words which could be simply abreviated to “FTD contract”. Any questions regarding the above please feel free to contact the author at
Abogado, Avocat, Lawyer,
Miembro del Colegiado de Abogados en B.C.S.
Member of Lawyer's college in B.C.S.
Firm´s Senior Partner,
Notaria 8, Planta Alta, suite 4 & 6,
Esq., Allende y Serdan,
La Paz, B.C.S., Mexico.

1 comment:

  1. In Mexican real estate transactions the lawyer is MORE important than the real estate agent. Once the deal is agreed to, the lawyer is the one who makes certain everything is correct. Any mistakes made during this process become the headaches of the new buyers. It is 100% buyer beware in Mexico.