Mexico - House Sale
Selling your house takes as much attention to details as buying one in Mexico. There are some restrictions for foreign ownership of real estate, according to the Foreign Investment Law of the United Mexican States (official name of this country). It was published in the official Gazette of the Federation, on October 27, 1993. These restrictions have more to do with the purchase of land in coastal areas or near the country’s boundaries, and therefore, will not apply to the purchase of most properties within Mexico City.
When selling a property, the first difficulty is determining the ownership of the property. Ownership and sales may be registered in Mexico, but registration is not a requirement, thus the owner of a property may not be the owner and may not have the right to transfer a title to the property. There is no title insurance either; in the case of a fraudulent sale, the only recourse of the buyer would be through the criminal courts, which usually take up large amounts of the investor’s time and money before giving a ruling.
The vendor is responsible for the property sales tax in Mexico. It may amount to up to 35% of the profit made by the vendor at the sale. This is determined by updating the acquisition cost (with official inflation indexes) of the property.
For security reasons, it is recommended that any sale of real estate be made through a reputable real estate, since many people you don't know, will be parading to see your house (and one of them will be the lucky buyer).
We strongly advise that you also hire the services of a specialized attorney.
In Mexico, the only enforceable provisions are those contained in a legal, written and signed contract. Letters of intent, word agreements and the like, which may be legally enforced in other countries, are meaningless in Mexico.
All legally binding contracts in Mexico are written in Spanish. A contract in any other language is invalid. If you request to have a copy of the contract in your native language or in English, the Spanish version will apply, so it is important that the translation from Spanish is as exact as possible. When you sign a contract, be sure to understand each of its provisions. It is most likely that one of the provisions will say that you fully understand and agree to all parts of the contract, and that it should be immediately binding.
Do not rely only on your real estate agent to understand the contract, even if he/she seems reliable. We recommend you to obtain the services of a "perito traductor" - expert and licensed translator- to avoid any problems.
It is recommended that you have any signed contract immediately registered through a notarial office, although this is not required in Mexico. Ask the notary to give you certified copies of the contract and have those certified copies authenticated by the embassy of your country. Registering a contract does not guarantee its legality, but it gives a great deal of protection under the Mexican law. Do not rely on the buyer or real estate agent to register the contract. The costs of the above mentioned services may be a little high for the purchaser, but well worth the cost.
In Mexico, the document used to pass on property from one party to the other is called "escritura". Certified copies of the original "escritura" are given to both the vendor and the purchaser, but the original itself is inscribed in the notary’s ledger and not given to the purchaser. The copy must have an original signature of the notary, and should provide the entry information of the transaction on the notarial ledger. Before having the "escritura" inscribed in the notary ledger, be sure to verify that the information it contains is correct. The correction of any errors later on, could be very costly.
As a protection to the purchaser, the notary public will require a document named "Certificado de Libertad de Gravamen". This document should be provided by the seller or the notary, to declare that the property is free of liens and/or encumbrances. This document is provided by the "Registro Publico de la Propiedad", the Property Public Records.
Useful websites:
www.ricardobarraza.com
