A fideicomiso is a trust that is authorized by the federal government, and created by a bank, through which a property can be owned by a foreigner, in the maritime zone.

In essence, what happened is that a number of centuries ago, during times of war, foreign powers bought up coastal areas, and/or along the border, to create military bases and naval blockades.

When the last constitution was drafted, Mexico put into the constitution that foreign powers cannot directly own property in the maritime zone, or directly along the border.

On account of this archaic law, Mexico created a system whereby foreigners could own property, via the fideicomiso trust, by acquiring a permit from the federal government.  And, with this permit, the bank can create a trust called a fidecomiso. 

With the trust, the bank owns the property for legal purposes, but the foreigner owns the property to enjoy.  The name of the bank, and the foreigner, and the foreigner’s beneficiaries are all listed on the title.  

When a foreigner acquires a property with a fideicomiso, the seller, buyer, and the bank’s legal representative all sign for the sale.  Then, when the new title is constituted, it involves the integration of the fideicomiso trust, and the deed for the property, into a single legal document. 

The new title reflects ownership by both the bank, and the foreigner.  The bank owns the property for legal purposes.  But, the foreigner owns it for his own enjoyment, so long as he does not attempt to erect a military base. 

Also, when a foreigner acquires a property from another foreigner then the sale involves a “modification of the fideicomiso trust”.  In essence, in the closing, the previous owner signs for the sale, and the new owner signs for the purchase, and the bank’s legal representative also signs for the sale, on behalf of the bank.  All three parties sign. 

The permit issued by the federal government, for the creation of the fideicomiso trust, lasts for fifty years.  After fifty years, the trust needs to be renewed.    

Before embarking upon any endeavor to acquire property in Mexico, the first thing that should be done is that the property, and its history, should be reviewed in the Public Registry of the State.  It is important to do this because only in the Public Registry do we find the current legal status of the property.  It is only in the Public Registry that we can see that the property is free of liens, embargoes, lawsuits, and that the property has a clear title.

Beyond this, in order to initiate the sales process, one must successfully acquire a “Certificate of No Liens” from the Public Registry of the State.  A Certificate of No Liens is required by the bank’s legal department, in order to authorize the sale.

Reviewing the property’s legal status is a way to avoid wasting valuable time and money on a property that cannot be acquired.  

Many people use the term “sale” in a very loose sense.  It is important to understand the legal definition of a sale, in the eyes of the state, in the State of Quintana Roo.  

Throughout Mexico, each state has its own variation of the sales process that is tailored to state law.  Most states in Mexico use a legal system that is known as “derechos declarados”, or “declared rights”.  Quintana Roo, and possibly Puebla, use a legal system known as “constituted rights”.  

These differences in legal systems affect what is deemed to be a sale.  In most of Mexico, a “legal sale” occurs when there is a signing in front of a state authorized lawyer known as a Public Notario.  Because Quintana Roo uses a legal system called “derechos constitutiva” – or “constituted rights” – a sale does not occur until record of that sale is carried to the Public Registry, and REGISTERED by the state, with the issuance of “Boleta de Registro”, or receipt of registration.

In the State of Quintana Roo, your sale does not occur until the sale has been REGISTERED by the state. 

It is very important to understand that it is not enough to sign a contract, and pay some money to some third party.  If one cannot prove that the Public Notario has been paid to carry out the sales process, and the Public Notario is not paid for any reason,  then the state is not liable for the sale. 

So, in Quintana Roo, a sale does not occur until there is completed registration, with the issuance of “boleta de registro”.  And, until that occurs, under certain circumstances it is possible that the legal owner could lose the property, for any number of reasons.  This is why it is important to carry out the sales process in a SAFE and LEGAL manner, that is fully supported by the law.      

In societies that derived their legal systems from ancient Rome, via Spain, a Notario Publico IS NOT a “public notary”, as in the US, Canada, and other places.  A Notario Publico is a LAWYER who has been appointed for life by the Governor of the state, and who is vested with a special public faith.  While there are many lawyers in Mexico, there are few Notarios.  In fact, the Notarios are numbered in each state. 

In many states the requirements to become a Notario are very strict.  For example, the lawyer must be 35 years old or older, not have a criminal record, not a gambler (must collect taxes), practices law for five years, worked under another Notario Publico for two years, pass very tough tests in both state and federal law, take special classes to become a Notario, and then take a final examination.  If a candidate can pass all of this, then he becomes a candidate in waiting.  And, when enough Notarios have either retired, or passed away, then he is appointed by the Governor for life.

Because the Public Notario is vested with a special faith from the Governor, under the Constitution, he has the power to go to the Public Registry, and file for change of ownership, after a closing.  No private party has this power – only a Public Notario.     

While many people use private contracts for various transactions in Mexico, it is really important to use a legally sound contract, in real estate transactions.  The best type of contract to use is a contract created by a state-authorized lawyer called a Public Notario.  A contract made by a Public Notario can be “protocolized” which is a type of legal registration.  A registered contract bears seals from the state. 

Also, as a representative of the state, the Public Notario certifies that the contract is legally sound.  And, he certifies that the parties who signed did so in good faith.  They were not under any type of duress.  And, a Public Notario must have a translator present, to sign alongside the foreigner, in the event that translation must be made into the foreigner’s language.  This protects the foreigner from signing anything that he does not fully understand. 

In the event that any type of problem arises, when the contract is taken to court, it is critical that the contract withstands any and all scrutiny.  Sometimes, private contracts cannot stand up under intense scrutiny, for a number of reasons.  But, a legally registered contract is indisputable, in court.   

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