Protect Yourself From Mortgage or Construction Liens During Your Mexican Real Estate Purchase
Imagine having your dream home in Mexico, you are relaxing on your deck in the warm sun and looking out onto the beautiful Caribbean ocean. Life is amazing. It took all your savings but it is worth it. You are finally retired and you have arrived at your destiny.
But, did you use a real estate attorney during your real estate purchase?
If not, you have put yourself at risk of losing your brand new home. It is very important for foreign buyers to use a professional attorney in Mexico when purchasing property. They will do a comprehensive title search before you pay for your home. Signing the purchase contract does not guarantee you title to the property or protect your investment.
First of all it is very important to confirm that the seller is the registered owner of the property through a proper title search.
Secondly, and most important, if the property title is not registered in the Public Registry in your name, it is not legally your property and Mexican law may override your sales contract, if a third party is filing claim against the property.
Construction Liens and Bankruptcy
You may have read in the press incidents relating to foreigners loosing their new home due to liens on the property. This is due to not using an attorney to ensure the title is clear.
Any number of things may happen to put you at risk, some buyers are making payments on the real estate with a promissory contract, feeling confident the title will be transferred to their name when the balance is paid in full.
Meanwhile, since this property is not in your name, there may be liens registered against this property, although as you are living in the home.
For instance the developer may have used the building as collateral during another construction project, there may be unpaid employee wages, overdue financing on the development, investors, contractors, and suppliers looking to be paid, or an ex spouse may have a claim against the property.
There are many other circumstances why a property may have a lien on it including unpaid taxes owed to the government. Although you continue to make your payments in a timely manner, it is possible the developer is having issues keeping their financial obligations. As they say, you can not get blood from a stone, even if you have a signed contract with the seller and the property is taken from you due to his financial problems, taking him to court may be futile, especially if they file for bankruptcy.
These incidents can happen in any country, but you can avoid the risk of losing your investment by choosing a local attorney to do due diligence before you make your real estate purchase. If you want to protect yourself during the purchase process or you already find yourself with these issues contact a professional attorney.