Investing in real estate in Mexico can be an exciting and rewarding venture, but it’s essential to stay vigilant and protect yourself from scams. As a foreigner, navigating the local legal system and real estate market can be complex. Here are some crucial legal tips to help you avoid real estate fraud and ensure a secure investment.

1. Work with a Trusted Real Estate Lawyer

One of the most important steps you can take is hiring a reputable real estate lawyer. A lawyer can help you verify the legitimacy of the property, review contracts, and ensure all legal requirements are met. At Mexlaw, our experienced attorneys specialize in assisting foreigners with real estate transactions in Mexico, giving you peace of mind.

2. Verify Property Ownership and Title

Before making any payments, confirm that the seller is the legal owner of the property. Request a Certificado de Libertad de Gravamen (certificate of no liens) from the Public Registry of Property to verify there are no outstanding debts or legal disputes associated with the property.

3. Avoid Dealing in Cash and Ensure Proper Contracts

Scammers may pressure buyers into making cash transactions or signing contracts without proper legal review. Always make payments through traceable methods, such as bank transfers, and insist on formal contracts reviewed by a lawyer before signing.

4. Understand the Fideicomiso for Foreigners

Foreigners buying property within 50 km of the coastline or 100 km from a national border must use a fideicomiso (bank trust) or establish a Mexican corporation. Ensure the bank managing the trust is reputable and that the fideicomiso is legally structured to protect your investment.

5. Beware of Fake Pre-Sales and Too-Good-to-Be-True Deals

Pre-sale properties can be a great investment, However, you must make sure to verify that the developer has legal permits and financial backing to complete the project.

6. Conduct Due Diligence on the Property Location

Visit the property in person, verify zoning regulations, and ensure there are no ongoing disputes over the land. Some scammers sell land that is not legally zoned for residential construction or is involved in legal battles.

7. Register Your Purchase with the Public Registry

Once the transaction is complete, ensure your ownership is properly recorded in the Public Registry of Property. This official registration is crucial for protecting your rights as the legal owner and preventing future claims against the property.

8. Avoid Timeshare Scams

Timeshare fraud is common in Mexico, with scammers using high-pressure sales tactics to lure foreigners into dubious contracts. Always read the contract carefully, verify the legitimacy of the seller, and consult with a lawyer before signing any agreement.

9. Seek Legal Advice Before Signing Any Documents

Real estate transactions in Mexico involve legal complexities that can be difficult for foreigners to navigate. Having a professional legal team review all documents before signing can save you from costly mistakes and scams.

Secure Your Investment with Mexlaw

At Mexlaw, we specialize in assisting foreigners with real estate transactions in Mexico. Our team of experienced lawyers ensures that your investment is legally sound and protected from fraud. If you’re considering purchasing property in Mexico, contact us for a consultation and let us guide you through a safe and successful transaction.

Mexico has long been a favored destination for expats, thanks to its vibrant culture, stunning landscapes, and cost of living that often stretches your budget further than in many other countries. If you’re considering renting housing in the Riviera Maya or other popular Mexican destinations, here’s a comprehensive guide to help you navigate the process and make informed decisions.

Why Choose Riviera Maya and Other Destinations?

The Riviera Maya, encompassing hotspots like Playa del Carmen, Tulum, and Cozumel, is renowned for its turquoise waters, white sand beaches, and lively expat communities. Similarly, destinations like Puerto Vallarta, San Miguel de Allende, and Mexico City offer unique lifestyles, from beachfront living to colonial charm or urban convenience.

Advantages of Renting in These Areas:

– Affordable Luxury: Many properties offer high-end amenities at a fraction of the cost compared to similar rentals in the U.S. or Canada.
– Community: Large expat populations provide opportunities for networking and socializing.
– Lifestyle Options: Whether you’re into outdoor adventures, art, or nightlife, there’s something for everyone.

Renting Basics in Mexico

Renting in Mexico as an expat requires some preparation, especially if you’re new to the process. Here are the key steps:

1. Understand Your Needs

Define your priorities:

– Do you need a furnished or unfurnished property?
– What’s your ideal location: beachfront, city center, or quieter neighborhoods?
– Are amenities like parking, air conditioning, or a pool essential?

2. Determine Your Budget

Rental prices vary greatly depending on the location and type of property. For instance, for example, price ranges can vary significantly but here are a few examples to give you an idea:

– Playa del Carmen: $700 – $2,000 USD/month for apartments or small houses.
– Tulum: $1,000 – $3,000 USD/month, often with eco-friendly designs.
– Mexico City: $500 – $1,500 USD/month for urban apartments.

3. Search for Rentals

Popular ways to find rental properties include:

– Online platforms like Airbnb, Facebook Marketplace, or local real estate websites.
– Networking with local expat groups.
– Working with a real estate agent who understands the local market.

4. Understand Lease Agreements

Lease agreements in Mexico may differ from what you’re used to. Key points include:

– Duration: Leases typically range from six months to a year, but short-term rentals are common in tourist areas.
– Deposit: Expect to pay one to two months' rent as a security deposit.
– Utilities: Clarify whether utilities are included in the rent or billed separately.
– Documentation: Landlords may require a copy of your passport, proof of income, or references.

5. Inspect the Property

Before signing a lease, visit the property to:

– Check for maintenance issues.
– Confirm that all appliances and utilities are functional.
– Evaluate noise levels and neighborhood safety.

6. Legal Protections

Mexican tenancy laws generally favor tenants, but misunderstandings can arise.

It’s wise to:

– Ensure the lease is written in Spanish (the legally binding version) and translated if needed.
– Work with a trusted legal advisor, such as Mexlaw, to review contracts and protect your interests.

Tips for a Smooth Experience

– Consider Location Carefully: Tourist zones might have higher prices but offer convenience and amenities.
– Plan for Seasonality: High season (December to April) often means increased rental costs.
– Be Cautious with Scams: Avoid sending money before viewing the property or signing a legitimate lease.
– Negotiate: Many landlords are open to negotiation, especially for longer-term leases.

Why Work with Mexlaw?

Navigating the rental market in Mexico can be complex, particularly if you’re unfamiliar with local laws or language barriers. Mexlaw offers expert legal guidance for expats, ensuring your lease agreements are fair, transparent, and compliant with Mexican law. With offices in key expat destinations like Playa del Carmen and Mexico City, our team is well-equipped to assist you every step of the way.

Final Thoughts

Renting a home in Mexico is an exciting step toward embracing a new lifestyle. With the right preparation and support, you can find a property that fits your needs and start enjoying all that this beautiful country has to offer.

On the other hand, if you’re ready to purchase a property, reach out to Mexlaw today for a consultation with our team. We’ll guide you through the best purchase options available for your specific situation.

Mexico’s real estate market continues to attract global interest, with its stunning beaches, vibrant cities, and appealing investment opportunities. However, navigating property and real estate laws in Mexico can be complex, especially for foreigners. Here’s an informative guide to help you understand the essentials and avoid potential pitfalls.

Property Ownership in Mexico

In Mexico, property ownership is classified into two main types:

1. Private Property: These are lands owned by individuals or corporations and can be freely bought, sold, or leased.
2. Ejido Land: Ejido lands are communal lands primarily used for agriculture. Buying ejido property can be risky, as ownership rights are often unclear.

Foreigners and Property Ownership

Foreigners can own property outright in Mexico, except in the restricted zones, which include:

– Land within 50 kilometers (31 miles) of the coast.
– Land within 100 kilometers (62 miles) of international borders.

For properties in restricted zones, foreigners must use a fideicomiso (a bank trust) or establish a Mexican corporation.

– Fideicomiso: A Mexican bank holds the title to the property on behalf of the foreign owner, who retains full rights to use, lease, and sell the property.
– Mexican Corporation: This is an option for those purchasing property for commercial purposes. The corporation owns the property, and the foreigner owns the corporation.

Key Legal Considerations

1. Title Search: Ensure the property has a clear title and no liens or disputes.
2. Notary Public: All property transactions must be conducted through a certified Mexican notary public to be legally binding.
3. Property Taxes: Understand your obligations for annual property taxes (“Predial”) and ensure there are no unpaid taxes on the property.
4. Permits: If the property is intended for development, confirm zoning and obtain necessary construction permits.
5. Escrow Accounts: Use an escrow account to manage funds securely during the purchase process.

Risks to Watch Out For

1. Unverified Sellers: Always verify the legitimacy of the seller and their right to sell the property.
2. Incomplete Documentation: Avoid properties with missing or incomplete documentation.
3. Fraudulent Transactions: Work with trusted professionals to mitigate risks of fraud.
4. Ejido Land Issues: Purchasing ejido land without proper authorization can lead to legal disputes.

Benefits of Working with Legal Experts

Navigating Mexican real estate laws can be challenging without professional guidance. Mexlaw’s bilingual legal team specializes in assisting foreigners with property transactions in Mexico. From conducting due diligence to drafting contracts and ensuring compliance with local laws, we help protect your investment.

Additionally, our partnership with Mextax ensures you receive expert advice on tax implications, such as capital gains taxes and annual obligations, helping you avoid unexpected expenses.

Conclusion

Investing in property in Mexico can be a rewarding experience when done correctly. By understanding the legal framework and working with trusted professionals like Mexlaw and Mextax, you can confidently navigate the process and enjoy the benefits of owning real estate in one of the world’s most beautiful destinations.

Contact Mexlaw today for personalized legal support on your property journey in Mexico.

Last Update: September 3, 2024

It is easy to be caught up in a sales pitch while you are dreaming of owning a place in Mexico. The sun, beach and of course all the free incentives the salesperson is offering is very alluring. They make it sound so simple to own a little piece of Mexico.

There are many legitimate vacation or timeshare companies, but you need to be aware of the less scrupulous timeshare companies in Mexico.

Take the time to investigate these promises, the cost of this investment and the how to get out of a timeshare contract.

 

Protect Your Investment 

✓ Take time to understand the monthly expenses of a timeshare, maintenance fees which seem to increase each year, ask your salesperson if there is a cap on the fees and make sure it is documented in your contract.

✓ Speak to other timeshare owners on the development.

✓ Compare this resort to others, amenities, maintenance fees and availability.

✓ Do not allow the salesperson to pressure you into signing anything in haste.

✓ Make sure any promises and free gifts are added in contract.

✓ Do not sign Spanish documents.

✓ Verify that the contract has an official registration number issued by the Federal Consumer Protection Agency.

 

Your Timeshare Contract Should Contain 

✓ Obligations and benefits of this timeshare purchase.

✓ Name and address of the representative.

✓ Details of all costs associated with the deal, maintenance fees, taxes.

✓ Location and name of the resort, exchange options, which locations are included.

✓ Any verbal promises from the salesperson.

 

If you are serious about signing a timeshare contract in Mexico, it is important that you take the time to consult a  Mexican Litigation attorney. Make sure you understand the financial obligations to this timeshare and which benefits are included in your contract.

Timeshare sales members want the deal closed in one day, but you need to step away to have an attorney review the contract before you sign. If the salesperson threatens that the offer will not be available at a later time, walk away.

Are you having second thoughts about your timeshare contract? 

If you have entered into a contract and feel you have been a victim of timeshare fraud, you need a Litigation law firm in Mexico to dispute the contract.

Mexican timeshares are generally beachfront condos and hotels, meaning when you buy a timeshare in Mexico you are purchasing a right to use the property, as opposed to an interest in the real estate.

These timeshares can not be foreclosed on, but by defaulting on payments you will be reported to the credit bureau; the timeshare company may take legal action or turn the balance over to a collection agency.

In Mexico, there is a five business day grace period to cancel a timeshare contract. If you are within the rescission period, hire a  Litigation attorney  to send a certified letter to the resort requesting a cancellation of the contract.

The salesperson may have had you sign away the right to cancel; however this will not affect your right to rescind as this is an illegal practice.

People usually realize they may be a victim of timeshare fraud well after the grace period, at this point, it is necessary to file a complaint with the consumer protection agency delegated to protect consumers against fraud by companies in Mexico.

Mexican timeshare operations are registered with the Federal Consumer Protection Agency, which means your contract will be on file at Profeco. If there are any discrepancies between your contract and the one recorded at Profeco the contract is null and void.

The dispute can be a long and complicated process, obstacles such as language and distance may hinder your dispute.

Your claim is best handled by a litigation law firm in Mexico. An experienced attorney may also uncover a rescission provision in the sales contract. Once you have been released from the contract, the timeshare company must provide a full refund within 15 business days.

Owning a piece of paradise in Mexico is a dream for many. Whether it’s the vibrant culture, stunning landscapes, or year-round sunshine that draws you, having a home here is an attractive prospect. However, the financial commitment of purchasing a property outright can be daunting. Enter fractional ownership—a legally secure and financially savvy way to own residential property in Mexico.

What is Fractional Ownership?

Fractional ownership is a method where several unrelated parties can collectively own a property. Each owner holds a fraction or share of the property and has certain rights to its usage. This differs from timeshares, where you buy only the right to use the property for a certain period each year but do not own a share of the property itself.

The Legal Framework in Mexico

Mexican law provides a robust legal framework to facilitate fractional ownership, making it an appealing option for foreign investors. The structure typically involves setting up a Mexican corporation or trust (fideicomiso) where the property title is held, and the shareholders or beneficiaries of the trust have their ownership interests clearly defined.

1. 1. Fideicomiso: This is a bank trust that allows foreign nationals to acquire property in the restricted zones (within 50 kilometers of the coast and 100 kilometers of the borders). The bank acts as the trustee, holding the title on behalf of the beneficiaries (the fractional owners).
   2. Mexican Corporation: Forming a Mexican corporation is another common method. Here, the corporation owns the property, and the fractional owners are shareholders in the corporation. This arrangement is typically used for properties outside the restricted zones.

Benefits of Fractional Ownership

1. 1. Cost-Effective: By sharing the purchase and maintenance costs with other owners, you can enjoy luxury properties at a fraction of the price.
   2. Legal Security: The fideicomiso and Mexican corporation structures provide legal security and protection for foreign investors, ensuring your investment is safeguarded.
   3. Flexible Use: Owners can agree on a usage schedule, allowing each owner exclusive access to the property for specific times of the year.
   4. Investment Potential: Fractional ownership can also be a lucrative investment. As the property’s value increases, so does the value of each owner’s share.
   5. Hassle-Free Management: Many fractional ownership arrangements include professional management services, ensuring the property is well-maintained and ready for each owner’s use.

Steps to Acquiring Fractional Ownership

1. 1. Research: Start by researching reputable developers and properties offering fractional ownership. Due diligence is key to ensuring you’re making a sound investment.
   2. Legal Consultation: Engage a legal expert familiar with Mexican property law to guide you through the process and help set up the fideicomiso or corporation.
   3. Purchase Agreement: Negotiate and sign a purchase agreement that outlines the terms of ownership, usage schedule, and maintenance responsibilities.
   4. Setting Up the Structure: Work with your legal advisor to set up the fideicomiso or corporation, ensuring all owners’ interests are legally protected.
   5. Enjoy Your Property: Once the legalities are complete, you can start enjoying your slice of Mexican paradise.

Considerations

While fractional ownership has many benefits, it’s essential to consider the following:

• • Agreement Clarity: Ensure the ownership agreement is clear about usage rights, maintenance responsibilities, and procedures for selling your share.
  • Compatibility: It’s crucial that all co-owners have similar expectations regarding property use and upkeep.
  • Exit Strategy: Understand the process for selling your share and any potential challenges that may arise.

Conclusion

Fractional ownership in Mexico offers an exciting pathway to owning a slice of paradise without the full financial commitment. With a clear legal framework and numerous benefits, it’s a compelling option for those dreaming of a home in this beautiful country.

At Mexlaw, we specialize in navigating the complexities of Mexican property law, including fractional ownership arrangements. Our experienced team is dedicated to providing you with comprehensive legal support, from setting up fideicomisos and corporations to ensuring your investment is protected. We guide you through every step of the process, making your property acquisition as smooth and secure as possible.

Whether you’re interested in fractional ownership or other real estate ventures in Mexico, trust Mexlaw to turn your dream into reality. Contact us today to explore how we can assist you in making your Mexican property investment a success.

Last Update: July 4, 2024

A common question asked of real estate agents is “Can foreigners purchase property in Mexico?” The simple answer is absolutely! Not only is it possible, but it is also quite popular, especially in tourist destinations like the Riviera Maya, Puerto Vallarta, Riviera Nayarit, and Baja California.

Restricted Zones, Individual Buyers, and the Bank Trust

In your research, you may have heard of “restricted zones” in Mexico. These zones are any property within 100 km from Mexico’s international borders and 50 km from the coasts. According to the Mexican constitution, no foreigner may acquire ownership of any land or water within these zones.

However, an amendment was made to the Constitution to allow foreigners to own this land through what is known as a Fideicomiso (or Bank Trust). Foreigners can acquire real estate through a bank trust which grants them the use of the property for 50 years and the trust is renewable every 50 years.

Consider Creating a Corporation to Purchase Multiple Properties

A foreigner can also acquire property by establishing a Mexican corporation. There are a variety of different corporations that can be established so it is necessary to seek professional advice from a lawyer to determine the best option for you and your interests.

A Mexican legal entity has the capacity to acquire real estate in the national territory just as a Mexican citizen would so there is no need to create a bank trust to act as the intermediary. However, Mexican legal entities of any kind have tax and legal obligations they must comply with, such as the provisional payment of taxes on a monthly basis and a definitive payment of taxes on a yearly basis.

Another thing to consider is that a Mexican legal entity can acquire as many real estate properties as it desires with no restrictions to the maximum number. This is an effective way to invest in real estate in Mexico as the company may also deduct expenses related to its operation.

Comparing the Differences

 

	Bank Trust	Corporation
Who can create?	•       LLC/Inc •       Individuals	•       LLC/Inc •       Individuals
Costs	Average set up costs: $2,182.00 USD permit bank fee.  $522.00 USD 1st annual fee (payable in advance) Maintenance:  $522.00 USD annual fee	Average set up costs: $2,700.00 – $2,800.00 USD notary fees, rights of registration, notices to Foreign Affairs Ministry  Maintenance: $2160.00 USD Accountant Fees (Depending on the operations company has) Shareholders meetings (if required) Acquisition notice (when acquiring a real estate property)
Turnaround Times	Creation of bank trust: 45 calendar days minimum assuming all documentation is complete   Receipt of certified copy: 1-2 weeks after closing date   Receipt of Title:  3-4 months	Creation of Corporation with tax ID: 30 working days assuming all the documentation is complete.   Receipt of e-signature (e.firma): TBD   Creation of bank account: one month (depending on the financial institution)
Yearly Taxes	Property tax	Property tax Income tax / Capital gains Sales tax
Rental Policy	Long term: Yes Digital Platforms: ●        Nonresidents: 20% income tax, 16% sales tax. ●        Temporary or permanent resident with Mexican tax ID: 10%  income tax, 8% sales tax up to a maximum income of $300,000.00 MXN/yr	Long term: Yes   Digital platforms do not withhold taxes from the income obtained through the platform, but will be considered for the declarations that the company has to file.
Sale of the property	Capital gains/exemption: determined by & payable to notary   Extinguishment of bank trust fees   Real estate commissions	Capital gains: payable straight to the Mexican tax authority   Real estate commissions   Deductible expenses

Last Update: May 2, 2024

Maybe you met the incredibly persuasive timeshare salespeople at the airport when you landed in Cancun. Or, perhaps you signed up for the timeshare talk just to get some free drinks or an excursion. Whatever the circumstances, during your meeting with the incredibly friendly and outgoing timeshare salesperson, you looked out over the incredible resort with the blue skies overhead and the turquoise Caribbean lapping at white sands, and just knew, you want this opportunity! No, you need this opportunity! At Mexlaw, we hear from hundreds of vacationers every year who, in a moment of weakness or vacation euphoria, signed a timeshare contract while visiting one of Mexico’s incredible beach vacation destinations, only to realize it was a huge, costly mistake.

Here are some things to consider before cashing in those free drink coupons and purchasing a timeshare:

NEVER sign the contract right away

Back home, you would never sign a legal document without your lawyer reviewing it so why would you do it on vacation? Don’t let your guard down. No matter how much pressure the timeshare salesperson places on you, NEVER sign a contract without first having a lawyer review it.  That is your right and no one can stop you from having the contract reviewed.

Yes, you CAN cancel the contract

If you have already signed the contract and are having second thoughts, don’t worry. You are well within your legal right to cancel the contract within 5 business days of signing. However, you will need to hire a Mexican attorney to send a certified letter canceling the contract. And, if the salesperson had you sign a document that declared you were signing away your right to cancel, don’t worry. That’s an illegal practice and you will still be eligible to cancel as long as you are within 5 business days.

It is important to mention that there are some cases where the hotel will cancel and reimburse your investment without any difficulty. However, most of the time, you may find yourself being contacted by the hotel sales representative or membership department, claiming a variety of ways they can help you to renegotiate your contract or offering other services.

In case the provider completely ignores or rejects to cancel your contract, you will need to file a formal complaint to collect your investment.

Already a Timeshare Owner?  Be careful – Watch out for scams!

During the past few years, we have detected several ways timeshare contract scams are performed. One of the more common is having someone allegedly from a Mexican government office advising there was a ruling made in the timeshare owner’s favor and they will receive a settlement for damages or taxes for their timeshare purchase. The scammers even provide the phone number of someone who (supposedly) works for SAT, (the Mexican tax authority) or another Mexican entity. They even provide falsified “official court resolutions”. The timeshare owner is told that as long as they provide a tax ID and pay the taxes due on the settlement, they will receive their settlement funds. THIS IS A SCAM. There is no government ruling and unfortunately, many timeshare owners are defrauded out of thousands of dollars every year from timeshare scams such as this one.

BE AWARE: TIMESHARE RESALE FRAUD

An unsolicited contact offering to sell your timeshare is most likely someone looking to defraud you. We receive at least a dozen requests per week from victims in the same situation. Do not send money, do not follow their instructions, and do not trust them; this is fraud.

As we mentioned you do not need any type of tax registration or obtain a tax number, permit, or license, nor do you need to pay any taxes on the sale of the timeshare.

Unfortunately, the scams are becoming more elaborate and go so far as to use impersonation of real government workers and use real government programs, which are for other purposes, not timeshares, making it seem legitimate and trustworthy.