For foreign, owning a property in Puerto Vallarta can be truly captivating. Being a coastal zone, it is essential to create a trust that guarantees an easy and safe purchase. Sarah Elengorn, director of Elengorn Realtors and Marco Ramírez, substitute notary attached to Public Notary Public 2; They explain the process in a general way.
Currently considered one of the most useful legal tools, the trust provides a solution to a wide range of personal and / or commercial needs for both individuals and corporations. In order to know in general what it implies, we approach Marco Ramírez, substitute notary attached to Notary Public 2 and Sarah Elengorn, director of Elengorn Realtors; who explain us in a general way the process.
Its creation has to do with the history of Mexico, when in the old days large territories were lost. “To prevent that from happening again, laws were developed so that no foreigner could buy real estate on the border or in front of the sea. With the growth and economic development of the country, foreign investors came and in a certain way, the law had to be changed. As a result, the trust emerged, “says Elengorn.
What is it?
“Legally, the trust is a contract in which a person – called a trustor – transmits to an institution the property or ownership of assets or rights to be used for a legal and specific purpose in favor of another person called a trustee,” explains Ramírez.
Who can use a trust?
“Foreigners who intend to acquire real estate outside the restricted zone or obtain concessions for the exploration and exploitation of mines and water in the national territory, must submit a document beforehand to the Ministry of Foreign Affairs to obtain the corresponding permit. Therefore, the trust turns out to be a necessary vehicle for foreigners to acquire the rights to use and use real estate, “Ramírez says.
“In fact, I’ve also had to collaborate with Mexican clients that have trusts to protect their investments and in the future, ensure that the real estate is transferred to their heirs in a more agile, easy and safe way,” Elengorn adds.
What actors intervene in the process?
“The seller as trustee, the fiduciary institution -regularly a bank- as trustee and the buyer as trustee under the guidance of the notary public and the advice of the real estate agent throughout the process,” says Ramírez.
How long is the process to establish a trust?
“The normal process can be done between 30 and 45 working days from the complete integration of the file, until the delivery of the testimony of the public instrument that contains the trust – that is, the deed -. It can vary up to 90 days after the closure “, says Ramírez.
“Now, if it is a cession of trust, that is, that the seller is a foreigner and the buyer is another foreigner who wants to take the rights to the existing deed, it can also be done, since the trust is valid for 50 years. and it is automatically renewed. For example, if the seller has three years with his property, the buyer can acquire that same trust, but it will be for 47 years. That way, all the previous procedure will be saved. It’s a relatively easy process, “complements Elengorn.
What is the role of the fiduciary institution?
“Although the deed is in the name of the bank, the first beneficiary is the foreign buyer. This means that you have every right to sell, rent or use the property. At the same time, it acquires all responsibilities. The institution will not be presented to the condominium meetings, or pay the property – all that is specified in the deed. Basically, the bank puts the name so that the foreigner can acquire the property, giving him the same rights and benefits as the Mexicans, “says Elengorn.
What are some advantages?
“Fortunately, it is a standardized process for all public notaries and fiduciary institutions, so it is relatively simple from the client’s perspective, since notaries diligently develop the process until its completion,” says Ramírez.
“Besides that, it can become a personal testament. In the event of the death of the original owner, the beneficiaries can receive the property without having to go through the long trial process, “Elengorn complements.
What is something essential that must be taken into account?
“That the names of the beneficiaries are written correctly. On many occasions, foreigners usually write Bob Smith instead of Robert Smith. Although it is something elementary, it must be taken into account, since once the writing is, it is very difficult to change it, “Eleng concludes.
by: vallarta real estate