Procurement Design Development Construction Management
Answers:
Here you will find brief answers to a few of the more commonly asked questions. Please feel free to consider us a source contact for any other questions you might have. We can flesh out all of these answers for you and a great deal more.
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Property
Immigration
Design and Development
Property Management
Property
Q: Is it legal for foreigners to own property in Mexico?
A: Yes! Under Mexican law, specific requirements exist for foreign ownership of property in the restricted zones. All of Realty Executives Mexico properties are sold through a Bank Trust. The bank trust holds the deed of property. Trusts are good for 50 years and can be renewed every 50 years.
Q: Will I own title to the land?
A: Yes! The title to your land will be held on your behalf by the Fideicomiso bank trust as required by Mexican law. Title insurance will be covered by an individual title insurance policy on the property.
Q: HOW DO I OWN RESIDENTIAL PROPERTY THROUGH A FIDEICOMISO / BANK TRUST?
A: The law is very precise about the real estate Fideicomiso. The Fideicomiso is designed specifically for non-nationals to own residential property in formerly restricted zones. It provides, under the Mexican Constitution, the same legal rights of ownership, as a Mexican would have. It bestows upon the owner of the trust absolute and irrevocable control over the property held in trust. It is set in 50-year increments renewable for perpetuity. It can be bought, sold, inherited & willed.
Q: DOES THE BANK OWN MY TRUST?
A: NO. The bank trust operates much the same way as a U.S. bank trust does. The bank only holds the trust for your ownership and protection under Mexican law. It does not own the trust. The bank serves as the owner’s “employee”. It operates solely under the instructions of the owner of the trust. It can be bought, sold, inherited & willed. The Fideicomiso acts much the same as a Deed of Trust does in the U.S. providing equity ownership.
Q: ISN’T A BANK TRUST THE SAME AS A LEASE?
A: NO. Under a bank trust the beneficiary (buyer/owner) has all the rights of ownership: the rights to use, borrow money on, make improvements on, and transfer. A lease grants only the right to use. If the tenant makes improvements, such as building a house on the property, that house does not belong to the tenant, nor can the tenant sell the property or borrow money on it. A lease cannot contain provisions for future renewals whereas a Fideicomiso is guaranteed renewable into perpetuity.
Q: CAN THE MEXICAN GOVERNMENT TAKE AWAY FOREIGNERS’ PROPERTY AT ANY TIME?
A: NO. The Mexican government formed the Fideicomiso for foreigners through constitutional law and provides them, under the Mexican Constitution, the same legal rights of ownership as a Mexican would have. Secondly, the N.A.F.T.A. Treaty (1994) between Canada, Mexico and the U.S. further put in place many requirements including providing security from any of these governments arbitrarily seizing land from its rightful owner.
Q: Do I have to go to separate places to obtain escrow, mortgage and title services?
A: No! Puertomagic has in-house Escrow, Title and Mortgage services.
Q: Can the Mexican Government confiscate my land?
A: Foreigners often worry about their land being expropriated by the Mexican government. Under the North American Free Trade Agreement, NAFTA, Mexico may not directly, or indirectly, expropriate property except for a public purpose. This is the same as "Eminent Domain" in the U.S. Where it is necessary to expropriate land, swift and fair market compensation must be paid, together with accrued interest.
Q: What happens if the bank fails?
A: In the event the holding Bank should ever fail, be bought by an unauthorized Bank, etc., what happens to the Fideicomiso? Answer - the Fideicomiso will be transferred to another authorized Bank. The Bank does not own the Fideicomiso, you do!
Q: Can my family inherit my property?
A: Yes! Inheritance in Mexico is actually easier than in the U.S. since the property can be inherited directly without the delays and expense of probate as long as a will is in place. There is no inheritance tax in Mexico as long as a will exists.
Q: Can I legally own property without a bank trust if I have an FM2?
A: No, the only way a foreigner can own property in Mexico without a bank trust is to become a Mexican citizen or to have a corporation.
Q: What happened at Punta Banda? Didn’t the government take the land from some Foreigners?
A: No. The problems at Punta Banda started many years ago, and while it is complicated, following is a layman’s simplified version: The property “bought” by many Americans was never legally “owned” by the seller to begin with. (This is a typical real estate scam come to reality and a good reason to pay for a local reputable Estate Agent.) The titles registered always had a, “cloud on the title” (never was title insurance available, let alone purchased.) In the 1980’s, the “rightful owners” of the property petitioned to be paid or have their property returned. The majority of foreigners negotiated with the “rightful owners” to lease the property they had come to call their own, and continue to enjoy that property to this day. However, some Americans did not want to negotiate with the “rightful owners” and continued their lawsuits. After going through the Court System for many years, the Supreme Court upheld the decision that the land was to be returned to its “rightful owners.” When the Americans lost the final decision they were evicted. Many refused to leave and the military acted much the same as a Sheriff in the U.S. would do to uphold the Court’s ruling for the prevailing party. The government did not confiscate nor does it own the land. It only upheld and enforced the Supreme Court’s decision. It was unpleasant, very expensive, and left hard feelings on both sides.
Q: What can Puertomagic do to help me in this process?
A: We verify that the property that you are making a bid on is owned by the seller or their representative and then help you to make the frugal decisions that will enable you to accomplish your goal.
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Immigration
Non-Immigrant Permits are generally for people who intend to visit Mexico for less than six months and then depart. Non Immigrant classifications include Tourist & Business Permits, Traveler in Transit, Students, Distinguished Visitors, Local Visitors, Provisional Visitors, Correspondents/Journalists and Religious ministers. U.S. citizens planning to work or live in Mexico should apply for the appropriate Mexican visa at the Mexican Embassy in Washington, DC or nearest Mexican consulate in the United States.
If you're involved in journalism or media, you can be issued with a Correspondent's Permit, which enables you to carry out journalism work. The permit lasts for a year, but can be renewed as many times as required, provided that you are continuing your journalism work.
FM3 status is a Document status for a non-immigrant. This visa category permits a stay in the country of up to one year and may be renewed up to 4 times for one year periods each. There are no limits on entry and exits from the country. Different categories include: Visitor (white collar management, technical, professional, member of board of directors), artistic, athletic, clergy, etc. The category of visa depends on the filing request made at the time of issuance. This visa category does not create residency rights and may be for lucrative purposes.
Immigrant Permits are generally for people, who wish to live, work, invest and/or retire in Mexico and/or wish to qualify for permanent residence. There are two categories with several classifications within each category. It is highly recommended you seek professional help when considering a long term situation in Mexico.
FM2 status is an Immigrant Visa Category and is most generally used for the purpose of gaining residency status. FM2 status authorizes a stay of one year and may be renewed up to 4 times for successive one year period. At the completion of the 5 years, one may request residency status. This is a subjective decision by the authorities. During the 5 year period the visa holder may only be absent up to 18 months, whether on a continuous basis or sporadic basis. If the absence requirement is surpassed, residency may not be requested at the conclusion of the period. This may be for lucrative purposes.
A Retirement Visa allows one to live in Mexico but not to earn money in Mexico. The retiree must prove sufficient resources from abroad to live in Mexico. In some cases, the retiree could act as a part-time professor, researcher, investigator or technician. This visa is valid for renewable one year periods.
Q: What can Puertomagic do to help me in this process?
A: Depending on what you intend to use your newly acquired property for; we will provide you with the necessary documents, the translator if needed. We will walk you through the entire process. In most cases you can handle this in your country at the nearest Mexican Consulate. Most of the documents are available on line at http://www.embassyofmexico.org/eng/ and the process takes between two weeks and a month. If you do this in Puerto Escondido it can take three months or more.
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Design and Development (Some Options)
Property Development:
While the property is being secured in your name we will begin the process of designing the building that you have in mind. We will set up a series of meetings with one of our Architects or your own who will work to design a space that will meet all your needs. Since the building codes in Mexico leave something to be desired, we prefer to use Uniform Building Code's of California to insure that the buildings we create are of the highest quality and integrity. After your Architect and engineer have completed the plan to your satisfaction, we will submit it to our Mexican Architect who will review it for viability and compliance in Mexico. (Any plan for building in Mexico must be stamped by a certified Mexican Architect.) Then he will procure a building permit for your project. In the meantime the Project Manager will begin the bidding to procure a proven builder in the area. We currently have three main contractors here in Puerto Escondido. They are all bilingual and have all been in the building industry for over 25 years. Each of them has a full team of specialists that provide the various skills necessary to build any design. Typically a 2000 square foot building takes eight months to build out to completion. During construction Puertomagic will supervise the implementation of your plan to assure the high level of quality that is the key to your satisfaction and our continuing success.
Choosing an Interior Design Package:
With most immigration visas, you are entitled to import household goods for no duty; one time. We will help you to understand the criteria for this one time importation. Some people want to bring items from the USA and others want to furnish their homes with items they purchase in Mexico. The depth of your participation in this process is a personal choice.
Options:
You can drive down to Mexico in your own personal vehicle, hauling the items that you want to have in your new home or you can ship them to one of the several local ports and then truck them to your home or you can purchase all these items in Mexico. Alternatively we can provide you with designers that will produce interior design drawings with specifications for all design elements, purchase and supervise the correct installation of the approved design before you ever see the finished product. Of course your personal involvement in this process is at your discretion. Perhaps you want to decorate your home personally and only need information on where you might find such items as you would like. We will be happy to supply you with vendors, suppliers and boutique locations that will have the items you would like to use. This is a grand opportunity for you to explore Mexico. We will provide you with a bilingual driver guide for these buying expeditions. They are always great fun! Remember, if you are having items shipped to your new address, have patience; in Mexico, "manyana" does not mean tomorrow, it means, not today.
If you like, PUERTOMAGIC will provide you with interior designers on request.
Be aware, shipping anything to Mexico is a difficult task and is fraught with delays and unexpected costs. We can provide you with choices of shipping companies, customs officials in Mexico and will set the whole process up for you, or you can have a go at it yourself.
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Property Management
Many people want to have a winter home in Mexico and are faced with the property sitting empty for months on end. Puertomagic can provide several options that will keep this property secure in your absent. We also have maintenance services that we can set up for you such as gardening, pool service, maid service and even day to day shopping needs. We also manage rentals for people who world rather not be bothered |
