You want to buy property in the coastal zone in Puerto Vallarta, but you’re concerned because the details of the sales transaction are so different than what you’re accustomed to in the US. How can you be sure that you’re making a safe real estate purchase? What is a fideicomiso? Is being the beneficiary of a trust the same thing as owning land?

One and a half million Americans own residential property in Mexico. Unfortunately, buying Mexico property has gotten a bad name because many foreign buyers have fallen victim to fraudulent property transactions. Yes, there is a way to make safe real estate purchases in Mexico, and a fideicomiso offers so much transaction security that many Mexican citizens prefer fideicomisos to other types of property transactions.

A fideicomiso is a 50-year, renewable trust that is administered by a bank. The bank actually purchases the property and holds the deed for the beneficiary. The bank’s role is to act in the sole interest of the beneficiary, which means that the beneficiary has all the rights of ownership. The bank cannot take away your land or reject its fiduciary obligation to you. The government will not claim your land, and provided that the sale has been properly registered with a notario publico, no one else can establish an ownership claim on your property. A fideicomiso is a necessity if you plan to buy property within 50 km of the coastline or within 100 km of a national border, and a good idea if you plan to buy elsewhere.

There are many caveats to observe when buying land in Mexico. Your best bet is to work closely with a notario publico on the purchase of your property. In Mexico, a notario publico is a real estate attorney with some recognized judicial powers. They are appointed to the positions they occupy. The notario publico verifies that all elements of the land sale are correct and legal, and that the transaction satisfies Mexican law. Since your land purchase must be reviewed and registered by the notario publico, there’s no reason to contract a non-notario publico attorney for additional advice or representation. The notario publico and his or her staff will provide you with all of the advice and guidance you need, as well as the registration services that will close your property purchase.

In short, not only is a fideicomiso safe, it’s the only safe way to buy property in Mexico. Since this method of ownership was established, not one buyer who has established a fideicomiso has lost his property rights. That should indicate the protection that this method of ownership provides.

Photo Credit: Craig Jewell