LAKE HAVASU CITY PROPERTIES ON REAL ESTATE
BUYING REAL ESTATE IN MEXICO
THE RESTRICTED ZONE AND "FIDEICOMISOS"
The
law declares that the Mexican nation has original ownership to all land
and water in Mexico, as well as minerals, salts, ore deposits, natural
gas and oil; but that such ownership may be assigned to individuals.
The
Mexican Constitution prohibits direct ownership of real estate by
foreigners in what has come to be known as the "restricted zone." The
restricted zone encompasses all land located within 100 kilometers
(about 62 miles) of any Mexican border, and within 50 kilometers (about
31 miles) of any Mexican coastline. However, in order to permit foreign
investment in these areas, the Mexican government created the
"fideicomiso," (FEE-DAY-E-CO-ME-SO) which is, roughly translated, a
real estate trust. Essentially, this type of trust is similar to trusts
set up in the United States, but a Mexican bank must be designated as
the trustee and, as such, has title to the property and is the owner of
record. The Mexican Government created the "fideicomiso" to reconcile
the problems involved in developing the restricted zone and to attract
foreign capital. This enabled foreigners, as beneficiaries of the
trusts, to enjoy unrestricted use of land located in the restricted
zone without violating the law.
A "fideicomiso" is a trust
agreement created for the benefit of a foreign buyer, executed between
a Mexican bank and the seller of property in the restricted zone.
Foreign buyers cannot own real estate in the restricted zone due to
Constitutional restrictions. The bank acts on behalf of the foreign
buyer, taking title to real property. The bank, as trustee, buys the
property for the foreigner, then has a fiduciary obligation to follow
instructions given by the foreigner who is the trust beneficiary. The
trust beneficiary retains and enjoys all the rights of ownership while
the bank holds title to the property. The foreigner is entitled to use,
enjoy, and even sell the property that is held in trust at its market
value to any eligible buyer.
For buying or selling real estate in Lake Havasu City, call Dean Baker Owner/Broker Lake Havasu City Properties, 16 years experience, over 600 homes sold in Lake Havasu.
Cell phone 928-486-3368or (888) 854-7210.