Due Diligence and Protecting Foreign Property Owners in Mexico

Foreigners thinking about buying property in Mexico may hear the term “due diligence” this is a vital step of purchasing real estate in Mexico. You may see in the news that foreigners have lost their property in Mexico, finding out the property had a developer or construction lien against it,  the land was not authorized to be sold, real estate fraud or a long lost relative making claim on the land. Take the proper steps to prevent this situation from happening to you.

Due diligence is the process performed that guarantees you do not lose possession of your property. Whether you are an investor purchasing real estate or as an expat investing in a new home, choose a law firm who will perform due diligence in Mexico and ensure you receive a Title Deed on your property. A reputable lawyer will represent only you; the Notario is working for everyone involved, the buyer, the seller and the government. Although the state property registries will issue certificates of no encumbrances, and report there are no liens on the property, if a discrepancy is found after the fact, the buyer will have no recourse against the government for any human errors.

Due diligence in Mexico includes extensive research and gathering of certificates. Mexico has far less information regarding properties and ownership available to the public; they do not have the technology used for similar procedures in the rest of North America to record the transactions, liens, and chain of ownership.

Mexlaw undertakes a comprehensive and rigorous approach to due diligence, providing an Estimate Closing Cost, Insured Escrow Service, and Guaranteed Title Deed.  

Due Diligence and Research Checklist:

• Review offer and sale contracts.
• Clarify the property is not part of an Ejido, (agricultural land provided to the people of Mexico from the government).
• Verify there are no claims against the property.
• Liens and encumbrances, including taxes and utilities.
• Jointly owned property authorized to sell by all owners.
• The owner has the right to sell the property.
• The Title Deed of property.
• Chain of Title
• Predial (property tax) paid up to date.
• Cadastral Certificate, (official survey of the property)
• Proof of non-debt of from the Municipal Public Works with proof of payment.
• Proof of non-debt of water companies (issued by “CAPA” and “AGUAKAN”)
• Termination of Services or Employment Contract, if the previous owner had employees on the property.
• Environmental, zoning, land restrictions of use.
• Condominium regime.
• Proper manifestation of renovations to the property.

Buying real estate in Mexico can be a challenging endeavor, but with the right legal team at your side, it is a safe and secure investment.