As we are approaching 2009 and the immanent possession of our units, there are some questions arising about trusts.
Having been down this road before, we will make this process as seamless and pleasant as possible. We pretty much know how the process works and understand the reasons for this method of property ownership, so here is a partial explanation for the trust method of property ownership in the “Coastal Zone” of Mexico.
Many people are still under the impression that the ownership of property in Mexico is not available to foreigners. It’s still not unusual to have someone emphatically exclaim that “you can’t own property in Mexico”, or that “you have to have a Mexican partner on title to own property in Mexico”. These and other perceptions are just that; perceptions.
Reality is something like this (give me a little wiggle room here on the details, but I think this is close):
At one time the Mexican Gov’t. prohibited foreign nationals from owning land in the restricted border zones (within 50 km. of the ocean, etc.) because they were concerned about being taken over by foreigners. This became a part of Mexico’s Constitution and as such can not be altered. During this period in Mexico’s past, people who loved Mexico and wanted part of it for themselves, tried (sometimes with bad results) to own property.
The Gov’t has since introduced a system of Land Trusts so we can own our own piece of paradise on the ocean or anywhere in the restricted zones (Ejido land excluded - more on this another time). Not unlike a trust created in Canada or the USA where assets are lodged in the trust and held for the exclusive use of the beneficiary, your Mexican trust holds the property deed for the sole benefit of you, the beneficiary. You have the right to do anything with the property (within the law of the local jurisdiction of course). You can occupy, rent, sell, develop, lease, etc. at your discretion. One advantage of the trust is that when creating the trust document for a specific property, you lay out your beneficiaries upon your death, eliminating the need for a Mexican Will.
The disadvantages include the cost of creating the trust (only slightly more than Mexican’s pay to create a new deed when they buy) and secondly, the annual fee payable to the bank that holds the trust for you. I look at this fee (tax on us) that Mexican’s do not have to pay, as a part of the price we pay to enjoy all that Mexico has to offer. This ‘payment of yearly trust fee’ certainly makes for good discussion at margarita time.
In summary, you do not need to be a resident of Mexico to own property in Mexico. The laws governing property ownership are certainly different from ours, but the result is nearly the same. Maybe their system is a little inconvenient at times, but it is very comprehensive, providing protection for the buyer and seller. When the time comes, make sure you use a good Notary that adheres to the proper procedures. Ask questions!
Hope this helps and that it answers more questions than it raises. There is lots of information on trusts in different publications and on the internet, most of which is factual. Most important for you to know now is that other than the time needed to make a few trips to the Notary, this purchase (we sincerely hope) for you should be painless and efficient.
To learn more about real estate in Manzanillo and stay updated on Perla Del Mar’s progress, sign up for our newsletter!
Written by Mark
Some adjustments have been made in the kitchen plans which will make these kitchens even more outstanding. Note in the pictures: the refrigerator has been moved to the back of the kitchen, dramatically increasing the counter area near the stove, sink, dishwasher and island/bar area. Although the overall kitchen size is relatively the same, the plan appears larger and is dramatically more open.
Among the other changes are new larger stainless sinks, small changes in lighting, appliance positioning, and a deeper counter overhang. A cleaner look with less grooves allows the tropical hardwood to display it’s natural beauty, and will make it easier to clean and maintain.
It’s satisfying to see these units near completion and to hear the excitement in the voices of those who are anxiously awaiting completion of their units. We expect to show Perla to many northerners who have expressed interest and are coming to Manzanillo in the next three months to look into our Manzanillo real estate. 
