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Real Estate in Mexico - Truth vs. Lies
Our contributing legal author Lic. J.E. Beaulne, LL.B. provides us another
interesting article about legal terms in Mexican real estate.
When one comes to Mexico he normally meets a real estate
salesperson or an OPC (timeshare salesperson) and from that moment he is given a
line of (CACA DE TORRO) 99% of the time…
I conducted a personal survey on this matter and found that 90% of the
salespersons are not qualified when it comes to the legal matters during a real
estate transaction in Mexico and, to cover their ignorance they just simply lie
instead of saying “Sorry I do not know”.
Example: The word “trust” is used to describe the contract under which a foreign
person can obtain a personal Right to enjoy a real estate property in the
restricted zones in the Mexican territory. In Mexico we simply do not have a
trust law…in Mexico we have contracts and since a “trust” is not a contract in
the Common law system and that it does not exist in Mexico why does one lie? The
answer is just simple ignorance and, non respect of the Mexican legal system.
This been said we do know that the word “trust” is used to make the prospective
buyer comfortable but this is no excuse for not using the proper applicable word
which is “contract”. It is also true that when one is trying to use the proper
Spanish terminology or name of the contract that provides the Right to enjoy a
real estate property in Mexico it might confuse the listener but it is not an
excuse for the lie.
The reason why the complete name of the contract which is:
“Fideicomiso Traslativo de Dominio” is difficult to explain is again because of
ignorance but there is a simple remedy, instead of telling lies why not tell the
truth just by saying it in the following manner:
“When buying property you get an FTD contract which is a good as any title in
the world if not better”
In the event that one needs to provide the definition of the 3 letters one can then express the proper terminology or just say: It’s simply means a contract that transfers the domain (ownership) of the property
An other lie is when the combination of the following words are used: “Mexican corporation”. In all the law books in Mexico there is no such entity…but there is the expression: “SOCIEDAD” which translate in “PARTNERSHIP” and the difference between the two is like night and day…especially when one of the partners wants to sell his part…..
The above does not have great importance in the eye of the ordinary Joe but when it comes to resolve a legal situation in front of the Courts it is a different situation. A smart lawyer can have a field day with the two situations. First of all he can ask the Court to reject the complaint because there is no “trust” but a contract, why? Because a judge as to apply the law and if the law does not mention a “trust” how can he apply the law…
The most damaging lie comes when one is told that it is safe to buy “EJIDO
LAND”. In reality it is safe but not so easy to make it safe. Actually there can
be a real unsafe situation when the procedure is not follow to the letter of the
law.
Why one may ask? Because of article 84 of the Ley Agraria (Agrarian Law). This
forgotten article is the key to safe ownership of a Right or an unsafe ownership
for eternity…because, if the procedure regarding the “Derecho
de Tanto” was not done before the first transaction anyone who is a member
of the community (Ejido) can ask a Court to have the Title of the Fideicomiso
Traslativo de Dominio (FTD) contract or the “Escritura” declared null and, since
there is no prescription (statue of limitation) on this his Right to request the
annulment it could happen much later in life…like after the land supports a big
investment… How can one know if the procedure was done? Call us…we’ll tell you…
As some one once told me: “To tell the truth is easy because you do not need to
remember it”.
Lic. J.E. Beaulne, LL.B.
Abogado / Avocat / Attorney at Law,
Cedula profesional # 0086,
Miembro del Colegio de Abogados de B.C.S.
Member of the Lawyer's College of B.C.S.
Plaza Cerralvo, Suite 6
Alvaro Obregon #1665
La Paz, B.C.S., Mexico C.P. 23000
24 Hour Emergency Tel: 044-612-8681027
Office: 612-128-6859
Puerto Vallarta - 044-322-227-6531