Friday, November 24, 2006

6 Steps to Title Integrity in the RIviera Maya

Lack of Certainty in Titling Inhibits Investment in the Riviera Maya

Title Insurance is key to your Purchase in the Riviera Maya

by Ivan Castillo

Mexico offers an exciting opportunity for real estate investment. The 1994 liberalization of ownership provisions, provides non-Mexican nationals with greater legal freedom and ownership rights, opening the market to new sources of capital and providing non-Mexican nationals with many exciting investment locations. But before any investment is made a purchaser needs to be aware of the basic issues that surround property transfers and ownership laws.

At Stewart Title, we recommend these six principles to help buyers avoid risk;

1. Determine if the seller has legal ownership of the property and if it can be transferred legally.
2. Hire Mexican counsel or a title insurance company to search the ownership status back to the sovereign
3. Have your legal counsel review the buy/sell agreement, which usually determines the transaction's terms and conditions.
4. Arrange for a title company to handle the escrow of funds
5. Obtain a property ownership insurance policy to protect against recording errors, liens, encroachments, taxes, fraud, misrepresentation and other ownership issues.
6. If the property is a condominium regime (the regimen de condominio and the like), which defies the owners' rights, obligations, and restrictions.

These steps are even more important to take as, here in the Riviera Maya, the double titling of lots and property title forgery are the main inhibitors of investment in Quintana Roo. The lack of legal certainty causes rejection of about 30% of all applications to insure land - regarding property - mainly in the Riviera Maya.

The lack of certainty as to land tenancy prevails because in the Quintana Roo state there is no true control over the property titling. There are 4 Public Registry of Property offices - in Cancun, Playa del Carmen, Cozumel, and Chetumal. They are run separately and are NOT linked together in order to identify lots already executed by deed in another municipality. A title search can reveal the errors in title. Here at Stewart Title, our attorneys do the research to identify the property defects.

As a real estate information services corporation, Stewart has been providing buyers, sellers, and lenders, with the information and solutions to protect their real estate for more than a century. For more than a decade Stewart Title Guaranty de Mexico has provided non-Mexican nationals with the educational resources and title/escrow services to protect their Mexican real estate investments.

As the only U.S. based title insurance company to have a fully licensed Mexican underwriter, our bi-lingual professionals on both sides of the border pride themselves on helping you safely, securely navigate the Mexican closing process. For more information about how to safely purchase property in Mexico please contact us anytime.

Ivan Castillo is the General Manager for Stewart Title Riviera Maya.

He can be reached at ;

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