Purchasers of Mexican
real property can now receive Owner's Policies
of Title Insurance that can be issued on both
sides of the border from various companies to
both U.S. and Mexican buyers. Most title insurance
policies today are U.S. contracts of indemnity
guaranteeing ownership rights as vested in a
fideicomiso (bank trust) for residential property
acquired by foreign buyers in the prohibited
zone, or for properties held in a Mexican corporation
for non-residential purposes (i.e. industrial
and commercial). Mexico is not unlike the U.S.
in that there is a definitive legal framework
for ownership of land by foreigners known as
the New Foreign Investment Law (Dec. 28, 1993)
and as mandated under Article 27 of the Mexican
Constitution. In addition, there is formality
and compliance in the development of real property.
Regulatory statutes and procedures are mandated
on a state-by-state basis and require a series
of official approvals, permits, and authorizations,
coupled with public disclosure and written notification
by the governing public agency.
American title Insurance is available for Mexican
real estate whether acquired directly or through
a trust. The cost of the insurance depends on
whether the property you are purchasing is covered
by a master title commitment. The best way to
protect yourself is to get title insurance. Most
Mexican companies don't sell it, but Houston
based Stewart title Guaranty, Lawyer's Title,
and Fidelity National Financial does. The insurance
runs about $4 to $7 for every $1,000 of property
value, versus $3 to $4 in most of the U.S. In
addition to title insurance, property insurance
is also available in Mexico and the rates are
relatively low.
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