Home Possession without Title is Risky -- Baja Real Estate
Get Your Property Title into a Bank Trust Now
By Brian Flock
With alarming regularity in the past, foreigners buying property in Mexico ignored their basic purchasing rights. Complete, legal title to a property in Mexico should have transfered at the same time that you took possession of and started paying for real property. Yet many buyers mistakenly accepted the keys to the unit, even though the deal had not properly “closed” and they did not have their name on the title, better known as a Mexican bank trust or fideicomiso.
You should place your property in a Mexican bank trust as soon as you take possession of the keys to it, regardless of whether you financed through a bank or though seller-carried loans. You always have taken title at closing in your home country. This is how virtually all lending institutions insist on doing it in Mexico.
(IMPORTANT TIP: If you took possession without taking title at any time in the past, now is the time to take action during a “down” housing market when property values are lower.)
A seller may have suggested or even required that you not close title at possession of the property. The stated rationale was often that this would allow you to reduce the upfront cash expenditures of Mexican closing fees. Alternatively, you may hear that the seller’s policy is not to give title until they have been 100% paid for the unit, and that this is “the way things are done here.” They may have said that this was a requirement of their bank, or that the city hadn’t properly registered the property and that they were waiting on “paperwork.”
Whatever the reason given, unless you signed a contract which agrees that this was the way that the deal would be done, there is no legal basis for requiring that you take possession and make payments without closing title on the property. Doing so is risky to your investment and can also cost you substantial closing costs and income taxes the long term.
If you have already paid for your property and have not taken title, all is not lost and the current “down” real estate market is the ideal time to take action in order to save costs and avoid future taxes before prices rise again.
Take action to get your title now in order to shore up your family’s legal property rights, avoid competing claims, save yourself up to tens of thousands of tax dollars, streamline a future sale, and protect your family heirs from unpleasant surprises.
Brian Flock is a degreed and certified real estate broker in Baja California, Mexico. For information on how to secure your property title, Brian may be contacted at (619) 793-5224, brian@bajaoceanrealty.com, or www.bajaoceanrealty.com.