Do you like the idea of buying during the preconstruction phase? The fact that you could be saving money, and investing in a great property all at once. Preconstruction has many benefits, especially in the Riviera Maya. Continue reading
Bank Trust – What is it? When is it needed?
Mexico is a beautiful country and economically booming. You might have been thinking about either buying a property (or several properties as vacation rentals ) or developing a business here.
Good news! It’s a very good idea and totally feasible.
There are a few rules to respect, though.
This article will guide you through the various steps and explain two different schemes that will come in handy when you decide to make it happen i.e. setting up a Bank Trust (Fideicomiso) or a Mexican Corporation.
First of all, you have to know that a while back, it was impossible for Americans and Canadians to buy property in Mexico that was 50 km from any coastline or 100 km of a neighboring country (called the restricted zone). Only Mexican nationals were allowed to invest in land and properties located in this zone. The Mexican Constitution still stipulates that no foreigner is allowed to acquire land directly in this zone…However…some things have changed.
You can now invest in this zone through a Bank Trust:
A bank trust is a property interest held by a Mexican bank who´s sole purpose is to manage the property for the benefit of the owner. It is essential to remember that although the bank legally acts as the trustee and holds the title, your property is not an asset of the bank.
It is valid for 50 years and can be extended for another 50 years.
You will need to set up one Bank Trust per property. So if you buy 2 or 3, you will end up with 2 or 3 bank trusts.
There is, of course, an annual fee that you’ll have to pay (the fee can vary between 400-800USD per Trust, depending on the bank and each particular case). You will be the main beneficiary but the Trust allows you to designate two beneficiaries (whoever you want: your spouse, children, partner…) and if anything is to happen to you, they will automatically become main beneficiaries. The beneficiary has every legal right to occupy, rent, modify or inherit the property, and this is protected by the Mexican Constitution. The big advantage of this scheme is that there is no paperwork, you pay once a year and you are done for the next 12 months.
The other way to become a titleholder is through a Mexican corporation:
This scheme is advised if you are thinking of buying several properties (you can have as many properties as you want) for commercial use or if you are going to create another business. Indeed, you can operate a business through it, work from home, or run an internet business. It is actually quite simple to set up (it shouldn’t take more than a week) and you can incorporate under whatever name you wish. You need a minimum of two shareholders, though. This option has many advantages (tax wise for example) but on the downside, it involves a lot of paperwork and administrative work. This scheme requires you to pay on a monthly basis and probably to deal with an accountant (that you will have to pay as well).
You now are a little bit more aware of the different options offered to you if you want to buy in the restricted zone, but the best advice no matter what is always to ask a real estate professional.
At Living Riviera Maya Real Estate, we can help and guide you through each step. We have the experience, knowledge and we will find the solution that works best for you!
If you are not familiar with the buying process of a property, here is a little explanation about the different stages and steps, in particular the «Promissory purchase and sale agreement», also known as «Promissory agreement» which will be the foundation of your transaction because it contains all the important elements and details to close the deal.
The first stage is called: The pre-closing
You have found the property of your dreams, you are ready to buy it. You will then make an offer to the seller with the various conditions you want from the seller (e.g. price, furniture included or not, renovations to do before the official sale takes place, etc…). You will submit it to the seller and if he/she agrees, you will move to the closing process, the next stage.
In the closing process, the most important document is the “Promissory (purchase and sale) agreement”.
But what does it contains exactly and why is it important?
In the “Promissory agreement” you will find:
- the purchase price
- a description of the property that will be sold
- a full list of the furniture, items included within the property and in the purchase price
- obligations that the buyer must respect, the most important one being to pay the seller
- obligations that the seller must respect, the most important one being to provide the buyer with the property based on the characteristics that were agreed in the purchase and sell agreement.
- A date of when the physical possession will be delivered
- A certain date of when the transfer of title will take place
- Jurisdiction, which means the place where the agreement is executed
- Penalty clauses, to guarantee both the buyer and the seller, that if anything goes wrong, there will be some sort of indemnity or a legal security.
The “Promissory agreement” will then evolve and mature into the final document: The “Deed”. This last document will be formalized by a public notary, the last stage, is when the buyer pays all closing costs associated with transferring the deed in their name. And last but not least, that last document is submitted to the public registry for recording.
But as you can see the most important stage is the “Promissory agreement” because all the rest of the transaction ensues from that document.
LRM: Buying in Playa del Carmen…a dream come true!
You’ve been on holiday several times in Playa del Carmen and have fallen in love with the place, you have been considering buying a property in Playa del Carmen, Mexico, but you don’t know if as a Canadian or an American you can fully own a property there…
Yes, Canadian and Americans can actually own a property in Mexico, through a bank trust.
Here are a few guidelines that will help you through the process of buying in Playa del Carmen, Mexico.
First of all, you need to make sure that you really like the place, that it is where you want to spend all your holidays, or retire or possibly raise a family and start a business.
You need to be sure that it’s a place where you’ll feel at home, safe and happy. Not very difficult though when it’s Playa del Carmen!
The whole Yucatan Peninsula is actually one of the safest places in Mexico and Playa del Carmen has a unique Caribbean vibe…at night and during the day!
Then, once you know for sure you like the area, you need to find a great and knowledgeable agent. Someone who will find the perfect property for you; the one that will meet all your desires. Investing in a property is a big thing, it’s a big decision and whether it’s in your home country or in Playa del Carmen, you shouldn’t settle for less than a perfect match!
In addition,choosing a professional agency such as Living Riviera Maya, with experience and credentials, will guide you through each step of the buying process. Their role is to help you choose the best property at the best price that fits your requirements.
The agency will take measures to protect you financially and make sure the title of the property is clear. Ideally, you should work with someone who speaks your language and knows very well all the local customs.
Last but not least, you will need to hire a good notary. Your real estate agency will help you with that, not to worry.
The notario in Mexico has higher education and is only person who can legally create titles for property or who can convey already existing title between people. That is one of the major differences in buying real estate in Mexico.
That person will go through all the paperwork and legal aspects. Mexico is not Canada or the USA so it’s preferable to work with someone really specialized in Mexican laws and regulations.
If all that is done correctly, you will become the happy owner of a Playa del Carmen real estate, with no bad surprises, no extra bills and where you will be able to relax and enjoy all the wonders of your new paradise!
Now that you are one step closer to buying in Playa del Carmen, do not hesitate to contact Judi Shaw at Living Riviera Maya…She and her team are your best allies! Fantastic record, extensive experience with expats, on site since 2003, Judi and her team will help you make your dream come true…trouble free!
If you are in the process of buying a property in Mexico, you might want to consider settling the deal using an «Escrow» service. Indeed, the advantages are numerous.
But what is an « Escrow » service and why is it interesting?
Definition of Escrow: It is a financial instrument held by a third party on behalf of the other two parties in a transaction. The funds are held by the escrow service until it receives the appropriate written or oral instructions from both buyer and seller, or until obligations have been fulfilled by all parties involved in the transaction.
Basically, it means that the buyer and the seller agree on a third party (usually an attorney or an escrow company) to manage an account (escrow account) into which the transaction money will be transferred.
Escrow money is always linked to the terms of the purchase contract and funds are only released based on an “instruction letter”. That document contains the terms and conditions to follow before the money can be delivered to the seller.
Why is it interesting?
It is a very safe method of payment. It provides security to the buyer and the seller.
The buyer is ensured that the funds will be delivered to the seller if and only if the latter fulfills all the contractual obligations and terms in the “instruction letter”. If anything wrong happens, the escrow service will keep the money in the escrow account and will return it to the buyer.
For the seller, the use of an escrow service is the guarantee that the buyer has the money to purchase the property. The funds are held in the escrow agreement prior to the conditions being met and upon fulfilling them, the seller will receive the funds.
If you are interested in using such service, ask your real-estate agent for references. As a professional in the business, he/she has all the useful resources in his/her personal network and will provide you with very useful information.
Once you find the escrow company you want to do business with, the 2 documents you will need are:
– The property title (a legal description of the property that will be transferred).
– An identification which can be a passport or a driver´s license.
The company will then draft an escrow agreement, which will be executed by the buyer and the seller. And that escrow agreement is the official document through which the service of the escrow company will be hired.
We hope this Escrow explained article was helpful ! Please call us with any questions you may have. Judi Shaw | 1 604 628 7247 Direct | +521 984 116 3251 Mexico Cell
Are you a Canadian or a foreigner and you are thinking about buying a property in Mexico, more specifically in the Riviera Maya or around Playa del Carmen…?
You would like to use the services of a real estate agent but don’t know which company to trust or where to start…
You want to have all the information possible and all the services related to an overseas transaction at hand in order to make a trouble free investment. It’s totally understandable and you shouldn’t settle for less.
Look no further, Judi Shaw and her team at Living Riviera Maya Real Estate is the answer! She’s an experienced real estate agent based in Playa del Carmen, Riviera Maya. They will certainly be a major asset in every aspect of the buying process.
In order to learn more about her, we have asked Judi a few questions (that you may also have)… Her answers will definitely consolidate your decision to deal with her.
1) You are Canadian, Sauder School of Business UBC,licensed in Real estate,…how can do business in Mexico and really help me find the property of my dreams?
Well, first of all, you have the guarantee that I have a degree in business, I have a previous license in real estate in BC with all the training and education and licensing involved.
Not all real estate agents in Mexico have such background. I know how to do my job professionally with the higher standards. Secondly, it means that I understand Canadian (North American) needs and wants better than anyone. Thirdly, I have been living and working here for more than 13 years, I know the market and I keep my knowledge up to date…and NOW I am one of the very few truly licensed to practice real estate in the state of Quintana Roo. According to the new law in 2014, anyone selling renting or administering properties has to be licensed and only about 20 of the 2000 or so agents are currently licensed. I received my license on Feb 20 2016.
2) What kind of experience do you have in Mexico, is it really worth something?
I was recruited in 2003 from Whistler, BC to the Riviera Maya to take part in the largest launch of pre-construction luxury real estate in the Riviera Maya Mexico, called Rosewood Mayakoba. To date, it is still viewed as a turning point in real estate here in the Riviera Maya. I have experienced, first hand, the boom of Playa del Carmen as a major international destination and real estate market. I have seen its development, I know every aspect of it. All of my contacts are assets for you.
That was 13 years ago and since that time, I have never stopped being part all major real estate development.
3) How do Mexican competitors see you? And Mexican property developers?
But I am Mexican! I was naturalized as a Mexican in early 2016. I am well respected by my peers and other professionals involved in the real estate business. I speak Spanish more or less fluently which is a great asset when it comes to negotiation, people don’t see me as a foreigner anymore. No bad surprises due to misunderstanding! In addition, I have a deep knowledge of the Mexican real estate legislation, I can’t be fooled!
4) Do you work alone? Do you have enough time to take care of all your clients?
I have a fantastic team, very dedicated to our clients. We take pride in being there for our clients at every stage of the buying process. My team has very high standards and we offer a very high-quality service. We listen, we understand and…we care about all our clients!
In addition to that, I have built an extensive network of contacts in the industry, including legal support, tax advice, mortgage consulting, immigration assistance, rental and property management connections, and more…
5) What kind of protection do I have if I decide to use your services?
I am affiliated with various professional associations:
- Member of NAR (National association of Realtors)
- Member of Luxury Home Marketing Institute
- Resort and second home property specialist with NAR
- Transnational referral certificate (TRC)
Licensed real estate professional in Quintana Roo with SEDUVI, the governing body.
6) Is your expertise only in condos transaction? What if I am interested in investing in a lot or a hotel?
Good question! I have an extensive experience in all different kinds of transactions. Condos, houses, villas, commercial properties such as hotels and investment properties, lots and land to build your dream home. We have access to all properties and more importantly, we know how to handle each type of transaction!
7) What if at some point, I want to sell my property?
I can certainly take care of that. My role is to find the best buyer for all the properties in my portfolio and the best property for each of my client. My website enjoys the first place on google, organically. We list and market homes condos hotels and lots with great success due to our proprietary marketing methods
8) You are obviously well established in Playa del Carmen and know the real estate market there very well, now, what if I am interested in another place?
My company covers all these areas: Riviera Maya, Playa del Carmen, Playacar, Puerto Aventuras, Playa Paradise, Playa Paraiso, Puerto Aventuras, Akumal, Tulum, Yucatan, Cozumel, or Bacalar…
We can certainly help you find your dream home in your dream spot!
I live here love it and own here. Let me show you the same.