It is commonly believed that an attorney, in addition to the notary public, is required when buying property in Mexico. This is not necessarily the case. In fact it may make more sense to seek out a CLOSING AGENT to handle the many details of the transfer which can differ from what one is accustomed to when buying or selling a property in the United States or Canada.
When a Mexican property is transferred from buyer to seller the deed must be drafted by a Mexican notary public and signed by the parties, or their representatives, in the Notary's presence. This is true of a direct or fee simple, transfer as well as a transfer to a fideicomiso, the Mexican bank trust, for those properties acquired by foreigners in the restricted zone which is that area near the coast or along the borders.
A Notary Public in the U.S. takes a simple exam, gets a rubber stamp and is authorized to bear witness to signatures. The Canadian Notary requires a bit more education but has essentially the same duties and responsibilities as the US Notary. This is far different from the obligations and duties of the Mexican notary public who is required to have a degree in law, a minimum of five years of legal practice, pass a rigorous examination and then be appointed by the governor of the state in which he/she resides. The notary is legally responsible for the review of the prior deed and the tax and lien certificates. The notary must draft the new deed, calculate the taxes due and pay them. Also very important, the notary is accountable for his/her actions through the state and national notary associations.
Then why it is necessary to have a closing agent or an attorney involved in the transfer?
In Mexico a transfer is a many step process when a foreigner is involved. A permit from the Secretary of Foreign Relations must be obtained and the subsequent deed must be registered in the Foreign Investment Registry, in addition to the Public Registry where the property is located. Additionally, if the property is located in the restricted zone, along the coastlines or borders, a Mexican credit institution must be designated as the holder of the property for the benefit of the foreign buyer. This designation is done through a fideicomiso, trust, contract.
Obtaining the SRE permits, reviewing the trust contract, ensuring the registrations are completed are time consuming detail tasks that must be completed very carefully, in addition to the standard closing duties of obtaining no-lien certificates, property tax payment certifications, receiving and paying out fees and keeping an accounting of same. All these chores must be carried out in Spanish. All documents are, by law, in Spanish and must be fully reviewed.
Additionally, the buyer and seller frequently have questions about the procedure. These concerns and questions need to be explained in the buyer's and seller's native language.
When these matters are left with the Notary Public to handle, they may not all get done, or get done slowly due to the work load of most Notaries. Notaries Public in Mexico are not required to be bi-lingual. When these matters are handed to another attorney to perform, they may be sandwiched in between criminal complaints, court appearances and other more remunerative activities.
A good Closing Agent must be bi-lingual, can be an attorney with expertise in title transfers, or it can be a company with experienced bi-lingual closing officers and attorneys on its staff for consultations in the event there are title issues. More and more there are closing agents throughout Mexico. They are specialists in titles and transfers.
An experienced Closing Agent is a key person in the Mexico real estate purchasing process. Hiring a good Closing Agent who understands the ins and outs of the Mexican legal system and the requirements of the law as it relates to foreign investment will make the real estate transaction go much smoother and it can be completed far more quickly under most circumstances.
The prudent buyer will insist upon using a third party closing agent to protect his or her interests and will not depend upon the real estate agent to do this for him.
Clients should never hesitate to ask for details of professional experience and references when looking for the right fit to supervise the Mexican property transaction. This is even more important when the real estate agent in the transaction is representing BOTH buyer and seller. This is dual ทาวน์เฮ้าส์มือสอง agency which is still common in Mexico. In this case the buyer should definitely seek out his/her closing agent.
Questions to Ask a CLOSING AGENT: What exact services will you provide? What areas of law or real estate are your specialties? Can you provide an estimate of taxes and closing cost expenses? Will you order or conduct a title search? Can you provide at least three references? Do you have experience with transfers to foreigners, Mexican bank trusts and foreign investment? How long have you been offering Closing Services to the public? How do you handle the funds you receive for closing expenses? Do you prepare specific instructions for the disbursement of funds? Are you completely bi-lingual?
Closing Agents do not have to be specifically licensed in Mexico to be able to supervise the transfer process of Mexican property. It is important to be cautious and do the same homework, or more!, as when researching a real estate agent. Ask for credentials and references. The more experienced the staff and in-house counsel the company has in handling foreign investment transactions, the more protection and safety the buyer will have in a Mexican property purchase.
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