by Peggie Pentecost
While Puerto Vallarta is not likely the only haven with an international population growth, I have found that buyers and visitors alike boast of its beauty, perfect climate and many available amenities. This town also has been referred to as the “San Francisco of Mexico” with its many cultural resources, including an inordinate number of art galleries and restaurants serving up international fare prepared by award-winning chefs.
This beautiful beachfront city is located in the state of Jalisco and is accessible by air through one of Mexico’s more modern airports, just minutes from the city. Travelers from all over North America and beyond have found this lovely destination and made a piece of it their own by returning year after year. Because of the interest in purchasing property by foreigners, here are some important things you will want to know about assisting your clients with their purchase in this and other sought-after locales in Mexico:
The first step in the real estate purchase process would be to locate a reputable and trusted real estate company since it is necessary to the transaction. You will also want to be sure that your clients engage the services of a licensed Mexican lawyer since the legal documents for the transaction will need to be drawn and reviewed to meet requirements in that country. Additionally, the attorney will conduct the title search for the subject property and assist the buyer in determining if there exists issues and how to address them. While many of the real estate companies have an attorney they can make available to you at no charge, it is recommended that you or your clients have their own. While much of the written documentation is familiar to us here in the U.S., there are no licensed real estate professionals there and real estate companies merely need to set about establishing a Mexican corporation to be in business. Your best source for verifying the reputation of a company would be to contact the Consulate General or someone you may know that already has done business in the area where your client is purchasing. The Mexican attorney is likely your most valuable asset. He or she is accustomed to dealing with many transactions and all of the parties associated to them, such as banks, governments, notaries, etc. and is well aware of the costs that are usual and customary, saving your buyer money as well.
Extremely important is the understanding of purchasing within a Restricted Zone and arranging for the “Fideicomiso” trust agreement which allows the foreign buyer to set up a trust arrangement. These restricted zones forbid foreigners from owning real estate. However, these “Fideicomiso’s” allow them to be the trust beneficiary, retaining all the rights of ownership with the bank holding title to the property.
Before you can acquire real estate in Mexico, it is required that one obtains a permit from the Ministry of Foreign Affairs prior to entering into a contract for purchasing property. These beneficiaries can be Mexican corporations, legal entities or individuals. The Ministry permit is issued within 5-30 days so long as it complies with the stipulated requirements and depending on where it was originally submitted. After that time, as long as there has been no action by the Ministry, the permit is considered authorized. Even upon the expiration of this permit, the beneficiary still retains all rights to “use” and “exploitation” of the property under the fiduciary relationship with the bank holding the title.
Before venturing off to Puerto Vallarta for a property purchase, dozens of qualified CIPS REALTORS® right here in the Houston area can assist you with much of the necessary steps needed to finalize a purchase of real property there. Being properly prepared with all of the information will help make your process go more smoothly and make the purchase an enjoyable experience. You too can join the hundreds of foreign citizens who have decided to make Puerto Vallarta their second or first home.