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TITLES ON COASTAL PROPERTY

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Posted 36 minutes ago

  1 hour ago, gringal said:

Here is some information I've found on property near the beach.  (I'll be moving there soon for health reasons, so have been doing "due diligence" on property rights.)  This was written by one of the two major realtors in La Manzanilla, with many years of experience living and working with buyers there.  All of the listings he shows which have "titles" include that information.  Most listings aren't titled; even those with high asking prices. Many people moving to Mexico seem to operate on the "fingers crossed" principle.

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"Most of the Costa Alegre (not all of it) is still Ejido land. There are titled properties in Boca de Iguanas and La Manzanilla. Separately all of Costa Alegre is in the restricted zone of Mexico and you should understand what that entails. For more information please read the information below.
 

Ejido land and the Restricted Zone


People often come to the office of Costa Alegre Properties seeking information on what the situation is regarding purchasing land or real estate in La Manzanilla. In this article I will attempt to duplicate what I tell them. This is a rough outline and should not be taken as end truth. I assume no responsibility for anything, I am just trying to help others and understand better myself.

Brief explanation of La Manzanilla Ejido land

The restricted zone is apox 30 miles from the water and 50 miles from the boarders all over Mexico. Mexican citizens (including foreigners who have become Mexican citizens) can hold properties in this area but foreigners must hold the land in bank trust (fideicomiso). In order to get bank trust the property must be titled. Here in La Manzanilla we are in the process of getting titles but they have not been issued on a mass basis yet. What the foreigners are doing is putting the property in the name of a presta nombre then going to the Notary and getting a power of attorney, a lease agreement and a promise to transfer title arrangement with that presta nombre. If that presta nombre is a member of the Ejido then from my understanding technically it would be a bit more secure.

Presta nombre’s are illegal, if you are using a presta nombre to AVOID bank trust the Mexican government feels you are trying to cheat them and may take punitive action. Here in La Manz we are using presta nombre’s because bank trust is NOT available. The intent is not to cheat the government but to hold something until bank trust is available. That does not make presta nombre’s legal but the intent is certainly different.

The risk comes in two areas, the space of time in-between "buying" the property and getting title and the integrity of the Ejido itself. In the gap of time between buying and title (bank trust) things could happen, international relations could be strained or several other situations could occur.

Most articles I read on Ejido land fail to distinguish between the Ejido's themselves. Some are honest with good people and others are rotten to the core. The Ejido is not just the people in the office who run the daily business, it is the people of the Ejido itself. The people in the office can not implement a policy without it being approved by the assembly (all of the Ejido members) who meet on the first Sunday of the month every month. It is there that the consistency and integrity lies and it is there the trust (should you choose to trust) should be placed. The advantage to getting something now is having a better selection and lower cost. After titles are issued prices will soar as there are many more buyers once bank trust is available.

The above word's are my understanding of things and are not to be taken as the Bible truth (not sure that exist in Mexico). Don't go crazy and leave your common sense at the border. Gather information, digest it and then come to your own conclusion."
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From what I heard foreigners cannot own in the restricted zone near the coast or the border so whether the land is private or communal (ejido , comunal  land) it is the same ,no? they have to have a bank trust. The problem wth ejido is that there is no status of limitation so the heir  of the people who got you in can change their mind, and you are out of luck..

I would think that private deeded land is safer than ejido.. no?

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I sold RE in Mazatlan for about 8 yrs.....do NOT go near ejido land!!!!  The entire community must sign the sale documents and yes, it can be done but I know of a project that took more than a year for all the signers to agree.  We did sell a piece on the beach of an ejido at the buyer's insistence.....we had to chase around a lot to accomplish this but it was a small ejido and finally the comisario signed the final docs.   When the buyer was delayed NOB in starting work on the property and finally did return to the little house after at least a year and was looking around it...a man came along and wanted to know what they were doing in "his" property!  It did not end well for the foreigner.  The fideicomiso is good for 50 yrs and can be renewed for another 50 unless that has recently changed.  It is fairly expensive with the annual fees which are a cash cow for the administrating bank.  This trust document usually takes the place of title insurance as known NOB.

Do your due diligence!!!

 

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I agree with Willie. Do NOT purchase land alone or land with a house that is not already titled and either ready for the transfer of an existing Fideicomiso or ready to get one. TITLED and REGISTERED is an absolute must BEFORE the Fideicomiso. Absolutely do not let anyone talk you into it with the lure of "prices will go up if and when". It's a nightmare that you don't need at any stage of life. Period!

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14 minutes ago, Ferret said:

I agree with Willie. Do NOT purchase land alone or land with a house that is not already titled and either ready for the transfer of an existing Fideicomiso or ready to get one. TITLED and REGISTERED is an absolute must BEFORE the Fideicomiso. Absolutely do not let anyone talk you into it with the lure of "prices will go up if and when". It's a nightmare that you don't need at any stage of life. Period!

Trust me, all:  I have no intention of buying ANYTHING that is not already TITLED AND REGISTERED.  I am both cautious and thrifty, and have no intention of putting my money at the kind of risk doing otherwise would involve.  I'd rather rent for the rest of my life.  In any case, I can't do anything either wise or not until my property here is sold.  That may take awhile!  At this point, everyone "in the know" says the market here is not moving.  Hopefully, it will improve.🙃

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Well it is always slow in the summer.  My esposa says the attendance at the last "Introduction to Lakeside" seminar at LCS was well attended.

 

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I agree with Mainecoons. The timing of putting up your house for sale wasn't great. Have patience. Don't know about the U.S. but, in Canada, the best time to list is in March because everyone wants the sale completed in June and, if they have kids, get them into the new school for September. A little different here but I suspect the action starts around October.

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2 minutes ago, Ferret said:

I agree with Mainecoons. The timing of putting up your house for sale wasn't great. Have patience. Don't know about the U.S. but, in Canada, the best time to list is in March because everyone wants the sale completed in June and, if they have kids, get them into the new school for September. A little different here but I suspect the action starts around October.

I know the timing isn't ideal, but my choices are limited due to factors beyond my control.   March would have been better, but I didn't know then what I know now.  Such is life.🙃

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We built and owned a home near the beach in San Carlos, Sonora for 9 years.  We had a fideicomiso and paid an annual fee for it. We sold in 2007 and moved here so things may be a little different. FYI We could not  purchase the land, let alone start to build without the fideicomiso .

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16 hours ago, bmh said:

From what I heard foreigners cannot own in the restricted zone near the coast or the border so whether the land is private or communal (ejido , comunal  land) it is the same ,no? they have to have a bank trust. The problem wth ejido is that there is no status of limitation so the heir  of the people who got you in can change their mind, and you are out of luck..

I would think that private deeded land is safer than ejido.. no?

Yes!  Presta nombre was invented to separate gringos from their dinero. I'm wondering if P T Barnum had anything to do with it.

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The fideicomiso laws have been close to scrapped over various political regimes in Mexico, usually pressure from the real estate sector that this will greatly improve marketing efforts. It makes sense to scrap it when you realize the only reason it exists was prevent foreign nations from installing cannons on borders and sea routes. The distance is based on maximum imaginable cannon range at that time.

The best remaining beachfront and beautiful natural reserves in Central Mexico (including Lakeside) are nearly all in Ejido. There are certain lawyers who have specialized in the process of titling Ejido lands and they have done very well financially.

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49 minutes ago, CHILLIN said:

The distance is based on maximum imaginable cannon range at that time.

50 or 100 km? Where do you dream up your "facts"?

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After conceding so much territory, Mexico thought this buffer zone, prohibiting foreigners from owning land, would discourage military incursions, which included a lot of cannon artillery back then. This is a fact.

The realtors want to do away with fideicomiso, and the bankers want to keep it - 100% profit for them.

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1 hour ago, CHILLIN said:

After conceding so much territory, Mexico thought this buffer zone, prohibiting foreigners from owning land, would discourage military incursions, which included a lot of cannon artillery back then. This is a fact.

The realtors want to do away with fideicomiso, and the bankers want to keep it - 100% profit for them.

My Notaria - a she - explained the huge cost to start it is a federal government fee/tax/security based on the cost of the property not the bank or notaria fee to start it which costs are a small fraction. Banks make very little and $300 to $400 a year for maintenance and responsibility is only about $30 US per month. Many banks are giving up providing this service - not worth it to them obviously.

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On 6/25/2019 at 4:36 PM, AlanMexicali said:

My Notaria - a she - explained the huge cost to start it is a federal government fee/tax/security based on the cost of the property not the bank or notaria fee to start it which costs are a small fraction. Banks make very little and $300 to $400 a year for maintenance and responsibility is only about $30 US per month. Many banks are giving up providing this service - not worth it to them obviously.

My fideicomiso fes are $527US/year once they tack on the IVA. What "maintenance and responsibility " do they do? Seems like money for nothing to me. I'm happy I can have a place in Mexico and if that what it takes, I'm not complaining, I just don't see that the bank actually performs any function for that fee, they simply hold the title. 

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On 6/24/2019 at 7:54 PM, gringal said:

Trust me, all:  I have no intention of buying ANYTHING that is not already TITLED AND REGISTERED.  I am both cautious and thrifty, and have no intention of putting my money at the kind of risk doing otherwise would involve.  I'd rather rent for the rest of my life.  In any case, I can't do anything either wise or not until my property here is sold.  That may take awhile!  At this point, everyone "in the know" says the market here is not moving.  Hopefully, it will improve.🙃

Gringal where is your location when you indicate that the "market here" is not moving. My impression about  Lakeside is that the market is good, many of my friend's  have sold and returned to the USA & Canada

 

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On 6/24/2019 at 6:54 PM, gringal said:

I am both cautious and thrifty,

Ha ha, I learned that some time ago. You probably remember you were asking where to find sea salt at a good price. I replied that I liked to buy it in the small shakers that were $10 pesos. You replied something to the effect that you already owned plenty of salt shakers and you weren't about to spend that much on a 3 month supply of sea salt. I knew then that "thrifty" was probably your middle name.  All in good fun, I'm not poking fun here just remembering my reaction to your reaction. Cheers!

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5 minutes ago, pappysmarket said:

Ha ha, I learned that some time ago. You probably remember you were asking where to find sea salt at a good price. I replied that I liked to buy it in the small shakers that were $10 pesos. You replied something to the effect that you already owned plenty of salt shakers and you weren't about to spend that much on a 3 month supply of sea salt. I knew then that "thrifty" was probably your middle name.  All in good fun, I'm not poking fun here just remembering my reaction to your reaction. Cheers!

I proudly admit to being "thrifty"! That's why I ain't broke yet!😉

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1 hour ago, lakeside7 said:

Gringal where is your location when you indicate that the "market here" is not moving. My impression about  Lakeside is that the market is good, many of my friend's  have sold and returned to the USA & Canada

 

True, most real estate operations are way down on listings compared to the recent past, not that much product available, and a lot of what´s available is overpriced or not desirable.

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2 hours ago, lakeside7 said:

Gringal where is your location when you indicate that the "market here" is not moving. My impression about  Lakeside is that the market is good, many of my friend's  have sold and returned to the USA & Canada

 

I am located on the same street as LCS in Ajijic. I just talked to my real estate agent, and anything over $200K is going out very S L O W L Y.  Your friends may have a different situation.  This is allegedly the one of the best locations in Ajijic, and the agent said it is not overpriced. I have a 4 bedroom roomy house, attractively decorated with a separate casita which is only a few years old. It also has a garage on the "no parking" side of the street; a big deal in this area.

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2 hours ago, gringal said:

I am located on the same street as LCS in Ajijic. I just talked to my real estate agent, and anything over $200K is going out very S L O W L Y.  Your friends may have a different situation.  This is allegedly the one of the best locations in Ajijic, and the agent said it is not overpriced. I have a 4 bedroom roomy house, attractively decorated with a separate casita which is only a few years old. It also has a garage on the "no parking" side of the street; a big deal in this area.

I think your property is significantly over $200k and would be in the higher price range and slower sales etc

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8 hours ago, lakeside7 said:

I think your property is significantly over $200k and would be in the higher price range and slower sales etc

Yes, it is.  As I said in my post "anything over $200K is going out S L O W L Y."  My property is on MLS for over $350K (and well worth it).  So, nothing to disagree about, is there?😏

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