COSTA MAYA REAL ESTATE

Properties for sale and rent in Costa Maya and Yucatan Peninsula

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Costa Maya is located in The Mexican Caribbean is one of the few places on this earth that offers beautiful emerald blue ocean water, some of the best diving in the world and any sport you desire. Between the exciting nightlife in Costa Maya, warm tropical weather, friendly people, famous Mayan ruins, and vast activities, this is the ultimate vacation destination for both the active sports enthusiast as well as the professional sunbather. Now let's move into the safety of the investment issues, the certainty of the solidness of the developer and of the authenticity of the property deed-title giving us ownership of our property is one of the reasons which give us the piece of mind to invest in Mexico in general and in Costa Maya and the Riviera Maya. Mexico is now rated one the best countries for investment opportunities in real estate growth as well as one of the safest for real estate investments (secured under recent changes in Mexican law.) Foreigners can own coastline land anywhere in Mexico with Trusts held by Mexican banks. These Trusts are set up as 50-year renewable lease without limitations. Foreign Land owners and homeowners can enjoy rights of ownership equal protected by the Mexican government. In the past Mexico had problems with foreign investors due to uncertainties in Land title, which resulted in many foreigners being discouraged by ownership complications. There were also restricted zones, which consisted of any land within 50 kilometers of the beach and 100 kilometers from any border.

To encourage foreign investment, in 1973 Mexico adopted a Bank Trust system called Fideicomiso, which permitted foreigner to buy and own coastal and border properties through a trust deed. This allowed foreigners to exercise complete control over real estate in the restricted zones. Under the Fideicomiso , the Mexican bank through the trust hold the title to the property in any restricted zone. Just like in the United States, the owner who is the beneficiary of the trust, administers the trust and therefore controls the property. He or she may transfer ownership, lease or improve the property at will. Foreign owners may also enjoy capital gains on sold property and can also instruct the trust to pass on the property to future generations without the cost of inheritance tax.

Mexican law also protects trust beneficiaries from any problems the Bank may have. Never can a trust be seized to satisfy judgments against the bank. In 1994 Mexican law established that Trust Deeds life is 50 year terms renewed indefinitely in 50 year increments. Mexican laws allow foreigners to acquire the rights to use, enjoy and avail real estate located in coastal and border area of Mexico. Through a trust contract ("fideicomiso"), foreigners can acquire land in Mexico for touristic or industrial purposes with the same rights and obligations that a full ownership property gives.

What is a Trustee? In Mexico banks are authorized to open fiduciary accounts and conduct trust operations. The Trustee holds legal title to the real estate property during the term of the trust contract, and is also empowered with the rights necessary to achieve the objectives of the contractual agreement that creates the Trust. What characteristics would a Trust Contract have? The legal effects of the Trust Contract is that the Trustee will keep temporary ownership of the real estate, thus complying with Mexican laws namely, Article 27 of the Mexican Constitution that prohibit foreigners from acquiring full ownership of real estate along what is known as the Restricted Zone, a belt of land 50 kilometers wide along the coastlines and 100 kms. wide along the borders of Mexico. In the Trust Deed, the present owner of the land would appear as the settler or Trustee ("fideicomitente") and would thereby deliver the title of the real estate to the Trustee, who would hold the property during the term of the Trust Contract fifty years. The buyer in turn, who appears as the Beneficiary ("fideicomisario"), is the person having the absolute use and avail of the property. Therefore, while as a foreigner you cannot register titles to land within the Restricted Zone, you can certainly own the beneficial interest of the Trust contract. In a way, it is similar to owning 100% of the shares in a corporation, and thus for most practical purposes it is like ownership.

What are the requirements? You or the seller must provide the bank with the following information: A copy of the real estate title or deed indicating the exact surface area and boundaries. A copy of a draft of the property. The name(s) of the beneficiary or beneficiaries, nationality, address and phone number. The agreed purchase price. Upon receiving the information and documents, the bank will present an application for a Trust permit at the Foreign Affairs Ministry. Once obtained, the Trust Contract is executed and legalized before a Public Notary. It should be noted that Notaries in Mexico have far greater legal competence than those in the United States. A Public Notary is an attorney at law authorized by the government to formalize title transfer processes in his Books of Protocols. The resulting documents are then registered at the Properties Public Registry, giving legal evidence of the title in the buyer's name. What rights and obligations does the Beneficiary acquire upon celebration of the Trust Contract? As the Trust Beneficiary, you will have the use and possession of the property that is, you may live on the land and undertake any alterations and/or improvements. You also have the capacity to instruct the Trustee on mortgaging, renting, selling or transferring the real estate from your beneficial interest to another person or corporation. If you sell the property to another foreigner, you may assign your beneficial interest to the new purchaser. This assignment of rights must be formalized before a Mexican Public Notary prior to the payment of federal and local taxes and fees that arise from the transfer of beneficial rights. You will also have the obligation to pay duties on the property, such as annual property tax, condominium maintenance fees, water, electricity, annual Trustee fee, and so forth. What fees will the Trustee charge? Trustee acceptance charge is $700.00 USD, plus 15% Value Added Tax, payable upon signing the Trust Contract. Trust handling and services is $700.00 USD per year, plus Value Added Tax, payable in advance. This fee will be increased by the Trustee every two years, according to United States inflation rates. On every anniversary date of the Trust the bank will mail to your address the bill of the annual fee for keeping the property in Trust.

What other expenses must the Beneficiary cover upon celebration of the Trust Deed? You must pay all fees, taxes and expenses that arise from the purchase and formalization of the Trust Deed before a Mexican Public Notary. You must also cover the costs of the permit that must be obtained from the Foreign Affairs Ministry, and of registering the Trust Deed at the National Registry of Foreign Investments. What happens if the Beneficiary passes away during the legal period of the Trust Contract? The Beneficiary has the right to appoint a substitute Beneficiary or Beneficiaries, who would acquire all rights and obligations stemming from the Trust Contract in the event of the beneficiary's death during the Trust's span. Through such designation your heirs will never need to follow any probate proceedings before any Mexican courts that could cost time and legal fees. They would only need to present the death certificate and IDs to the bank, which in turn would give instructions to a Public Notary in order to register your heirs as the new owners (Beneficiaries) of the Trust property. What happens when the Trust Contract expires? A presidential decree was issued on December 27, 1993, to establish a new Foreign Investment Law. According to its Article 13, the Foreign Affairs Ministry may allow the renewal of Trusts within the Restricted Zone upon the expiration of their term. Furthermore, the Foreign Affairs Ministry may also authorize a new Trust over real estate to be transferred from one Trust to another for a period of up to 50 years, when the Beneficiaries of the original and new Trusts are different. the prices mentioned above may change without previous notice. Mexican notaries ( notarios públicos ) are appointed by the government to control all recordings and documentation of real estate corporate and private records regarding transfers of ownership. Notaries also perform title search's similar to American title companies and guarantee your property to be unencumbered.

Fideicomisos are solid protection for your investment capital and has reshaped the Mexican tourist industry into one of the Best places on earth to park your money. Foreigners may also own rental properties or other businesses which own property by forming a Mexican Corporation owned by foreigners. In this case the Mexican Company, which would hold the title, owns the property and a trust with a bank is not needed. Though the only benefit would be a few bucks for annual trust fees. The Closing is performed by the Notaries and most properties only require 30-60 days complete the closing process. Though it might take considerably longer to receive the bank trust or actual title. Real estate transactions are performed by Notarios as the government requires. The government employs Notario Publicos to record the transfer of title at the time of closing. Much different than the term "Notary Public" in the US. Notarios are highly specialized government appointed attorneys that are licensed and closely regulated. Only they can affect a legal transfer of title. The legal necessity is to formalize it by executing a deed of transfer before a public notary, which will then be recorded in the corresponding public registry of property, to produce effects before third parties. A public notary in Mexico, although similar by title, is not similar to the one you have in the United States of America.

A public notary in Mexico has to be a lawyer and obtain a degree of notary with the local authorities, and then is granted by opposition the right to operate as a public notary. Public notaries are well known people in their towns and usually are considered very honorable personalities in their communities. It should be noted that Notaries in Mexico have far greater legal competence than those in the United States. A Public Notary is an attorney at law authorized by the government to formalize title transfer processes in his Books of Protocols. The resulting documents are then registered at the Properties Public Registry, giving legal evidence of the title in the buyer's name. Since public notaries are quasi government agents and recorders, they assist the authorities in such way that they verify the legal capacity of the parties to exercise their rights to sell and acquire the real estate; recordal of ownership to the real estate to be transferred at the corresponding public registry of property; and payment of real estate property taxes and water contribution fees; they will even register the transfer of the real estate property; they pay the legal fees of taxes for registration of the real estate and they even withhold the income tax generated by the gains of the seller and pay each tax to the corresponding authorities. Prior to the closing, the notario's additional duties include: (i) to examine the documents of the selling party to ensure their accuracy and legitimacy; (ii) to verify title; and (iii) to search the public records to determine the status of the seller's title to the property and the existence of liens against the property. The notario is also responsible for the collection of all applicable property taxes and government transfer taxes. Notarios specialize in transferring real estate and have handled many countless transactions before they are considered for appointment. They must be recommended by their peers, the community, and scrutinized by the government before they are appointed.

Similar to the european system of real estate transfers, all transactions in Mexico must go through a Notario to be legal and binding. Even if a person could get title insurance on their property, the transaction would not be binding unless it is handled by a Notario and has his official stamp. For practical purposes the notario is your lawyer. The Mexican Notary Public is an attorney who has practiced his profession for at least five years and has been appointed by the governor of the state in which he is practicing. His duties and obligations include; drafting of the deed, calculation of seller’s capital gains taxes and buyer’s acquisition taxes and to "give faith" to the validity of signatures. The persons signing before him must prove they are who they say they are. Because the responsibility and potential liability for the actions of the Mexican Notary Public are considerably higher than those of Notaries Public in the U.S. and Canada, the notary’s fees will also be substantially higher than those charged on the other side of the border. These fees are based upon a rate schedule reviewed and approved annually by the College of Notaries Public and are tied to the amount declared in the property transfer. Traditionally, the buyer and seller have met at the Notary Public’s office to sign the deed and to exchange funds and deliver possession of the property. Mexico is not the 'wild west' as some may perceive where anything goes and the prevailing Mexican attitude is 'trust me, no problema.' It is inherently important for non-Mexican buyers to understand that Mexico has formality of law with authorized regulation of real estate development procedures at all levels and this formality is coupled with a statutory government framework for the legal conveyance of real property and is enforced by the Public Notary. To finalize the section about security we must acknowledge that with two independent legal entities instances ( Public Notary and Bank Trust ) verifying the legality in every aspect of our real estate transaction must give us the peace of mind to go ahead and purchase our property.

Title insurance does not make much sense when buying condos in new developments. This is so as the developer has done all the work for you. The developer will not risk a millionaire investment to get all land permits and purchase a big parcel of land to construct a building if he is not sure the land is free of any encumbrances. For the cases on which the purchase is a pre-owned property and if we want to add extra locks to our security we may consider expend a little bit more and get title insurance. The real property conveyance process in Mexico, like any other civil code system in South and Central America, and many other countries in the world, is reliant upon individuals to transfer ownership rights. These highly educated and public notaries have the obligation, right and privilege to consummate all real estate transactions within their given territorial jurisdiction. Their acknowledgment and certification procedure provides judicial certainty to the authenticity of the process. With this process in place, Mexico can be said to have a good land convincing system. However, one must never lose sight of the fact that it is a system reliant on the performance of various people, not just the public notary. Sellers, buyers, agents, surveyors, property recorders and municipal employees all come into the mix. And as we have all learned throughout the annals of time, human beings, though not intending to do so, do make mistakes. Errors are made. We are not infallible. In real estate matters though, mistakes can be costly and create significant losses. For that reason alone, reliance upon a monetary indemnification that guarantees remuneration in the event of loss due to a title defect or error is a must. Suing the seller to recover property or money, whether in the United States or in a foreign jurisdiction, is a tough alternative to the viability of title insurance.

Title insurance on Mexican real estate is more than just a title insurance policy. It is an in-depth examination concerning title documents, and real estate closing process. In order to issue an Owner's Policy of Title Insurance, and assume the inherent monetary liability that comes with the policy issuance, the insuring company must be as certain as possible regarding all of the various elements in the property transfer. The process of the title insurance company, is to eliminate risk by examining all of the relevant issues today. If given the opportunity, a title insurance company may both buyer and seller of the relevant concerns that may be outstanding or in process prior to the consummation of the property conveyance. This type of investigation coupled with financial indemnification gives the non-Mexican purchaser of real estate comfort and security knowing that a company with over 100 years of expertise has examined all of the title matters and issues a title policy. When compared to the other closing costs associated with real property conveyances in Mexico, i.e., transfer taxes and notary fees, an Owner's Policy of Title Insurance will for the most part be the cheapest. It is often said that it is the responsibility of the notario to provide title assurance, and that they have the same requirement of certification as would a title insurance company. That is true. However, it is not often understood that in Mexico a title policy not only protects against liens, encumbrances, and tax issues, but also against fraud, misrepresentation, impersonation, secret marriages, incapacity of parties, undisclosed heirs and other hidden risk as provided by the policy insure a variety of title matters for the benefit of the proposed insured. For example a title insurance policy has the ability to provide affirmative coverage and endorsements that protect purchasers against risks that may be discovered in the title search process. How can any one individual, even a notario publico, give these types of assurances that have real dollars standing behind the assurance and that ultimately will protect a buyer in the event of a loss. Lets review another important subject involved in real estate transactions, the financing, only recently financing for foreigners became available in the Mexican territory.

Financing is available for American, Canadian and British citizens in Mexico. Loans can be obtained within three months from the filing of your application. Starting immediately, there is an innovative way to obtain the funds necessary to buy or build your Dream Home in a tropical paradise. For those individuals who dream of the perfect get away vacation home, the retiree looking to enjoy the tranquility that Mexico offers or if you are looking for relief from high taxes on your American investments, please read on. Loans starting from $50,000 USD are available to anyone with a minimum 600 credit score. Financing is available for pre-construction, existing structures, or combination land/home packages. The procedure parallels the purchasing process that you experienced with home purchase in your own country. Following the completion of a simple loan application and approved credit, calculate the maximum loan amount for your proposed project. After choosing your piece of Mexican paradise, the loan application is finalized. Within 90 days, you and your contractor can initiate work on your new dream Home. Other alternative for financing is Conficasa Riviera Maya they have joint offices in Houston, Texas and Costa Maya, Mexico. All loans are offered through major US lenders and most loans require a 20% down payment. This explanation covered the most important factors that show why is wise to invest in the Riviera Maya in general and in Costa Maya in particular.

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