FOREIGN OWNERSHIP OF REAL ESTATE IN MEXICO
Fee Simple title is conveyed under a full title and warranty deed whereby the seller guarantees he is conveying good title to the property and it is free from any liens or encumbrances except those noted in the contract itself.
A trust is recognized world wide as the highest and most protective legal document that can be invoked. Many Mexican nationals prefer to utilize the fedeicomiso (beneficiary trust) as their form of ownership not only because of the legal protection it provides but also because it is much easier to transfer title if and when the property is sold.
Buying Real Estate is certainly an impotant investment. The soundness of that investment is largely dependant upon the condition of the title to the land, because what you buy is not land but the title to the land. In Mexico, the fideicomiso, or bank trust, is the vehicle for foreigners to aquire ownership rights to property in the “ restricted zone” for a period of 50 years renewable in perpetuity. The Fideicomiso is a legal substitute for fee simple ownership.
As trustee, the Mexican banks acts on behalf of the foreign beneficiary in transactions involving the property held in trust. However, the beneficiary retains the use and control of the property held in trust, and enacts the investment decision with respect to the property. The trust is not an asset of the bank. The beneficiary has the right to use, lease, improve or sell the property without restriction, to transfer his rights to a third party, or to pass the property on to named heirs. In essence, the beneficiary has the same absolute rights to use and enjoy the property as if it was fee simple ownership.