Owning Real Estate

Q: Can a US or Canadian citizen
own real estate in Puerto Vallarta?
Peter H. Seattle
A: Hi Peter, you sure can, by
placing the property in a bank
trust, or “Fideicomiso”. Title of
the property is transferred to a trust
with a Mexican bank acting as
Trustee.
The Trust Agreement is formalized
by the issuance of a permit from
the Mexican Ministry of Foreign
Affairs. There are three parties to
the trust:
The seller of the property is the
Trustor, the bank is the Trustee
(Fiduciario), and the buyer is the
Beneficiary (Fideicomisario.) The
buyer is designated as Beneficiary
in the Trust and the beneficiary
rights are recorded in the public
record by a Notary Public.
The Trust is currently for a term of
50 years and can be renewed for
additional 50 year terms.
Many people have the mistaken
belief that the trust is similar to
renting, or a lease, this is NOT the
case!
The bank holds the property in trust
and follows your instructions. The
property is NOT an asset of the
bank, it is your asset.
As Beneficiary, you have the
same rights, use and enjoyment
as a Mexican National, and can
sell or rent your property without
restriction, and keep the proceeds.
You may also transfer your rights to
a third party or pass it on to named
heirs.
The bank charges the person
desiring the Fideicomiso an initial
fee of approximately $500 USD
for signing the agreement and
establishing the Trust and a yearly
fee of approximately $500 USD
for administering the trust. You
are free to choose which bank you
prefer to hold your bank trust. Your
local AMPI Realtor will be able
to coordinate all the paperwork
involved in this process.
You will just need to provide photo
identification, and fill out a very
basic bank form with your personal
information and instructions on
how you wish to hold the property
and who you want to pass it to in
the event of your death.
I recommend using a bank that
will lock in the administration fee,
and has a local English speaking
representative.
You can also request a clause be
added to your trust allowing you to
attend and vote at the Homeowners
meetings without getting a proxy
every year from the bank.
Some people complain about the
trust process, but there are benefits:
As part of the closing process, the
bank’s attorneys review the deed
and are able to sign on your behalf.
It is always nice to have another set
of trained eyes review your deed
before signature.
Also, the trust separates the asset
legally, much in the way a “living
trust” does in the United States.
Finally, in the event of the death
of the buyer (beneficiary), the
property automatically reverts
to the substitute beneficiaries,
avoiding lengthy and costly probate
procedures.
Do you have a question about Real
Estate in Puerto Vallarta? Just ask!
Active in local and national Real
Estate boards; published author
and acknowledged expert on Puerto
Vallarta Real Estate, Michael
Green moved here in 1997 to take
advantage of the unsurpassed
lifestyle PV offers.
Mike can be reached at:
pvgetaways@hotmail.com