Entertainment Magazine: Mexico: Real Estate

How to Obtain Title Insurance to purchase Mexican property

To avoid real estate scams in the United States, title insurance must be purchased. In Mexico, the same benefits apply. It is very important to obtain title insurance when purchasing any Mexican property.

Investors have been pouring bilions of dollars into Mexican real estate- homes, hotels and resorts. A fraction of these projects have run into problems and delays.

Without title insurance, those investors would not be protected under Mexican law. It is well worth the $500 to $3,500 USD dollars per title examined.

An ALTA format policy issued in the US, according to US law and jurisdiction. If any claim arises from title, it will be handled in the US courts.


Q: What is the procedure for obtaining Title Insurance for properties in Mexico?

A: There are several steps involved in obtaining title insurance when purchasing property in Mexico:

  1. The buyer pays an upfront fee for the title search
  2. The title research is performed by the title company and a Preliminary Title Report (PTR) is issued.
  3. When the PTR is in compliance, the title company issues a Commitment for Title.
  4. The Notario Publico takes the Commitment of Title and registers it in the Public Registry of Property recording office of the county where the property is located.
  5. The title policy is then paid for at closing.

Q: What does the title company need to begin the title report?

A: The title company requires that all fees be paid in advance and a copy of the seller's title.

Q: How long does it take to receive the Preliminary Title Report?

A: Between 7 - 20 working days depending on title conditions.

Q: How long does it take to receive the Commitment for Title from the insurance company?

A: Two days after receiving the Preliminary Title Report 5.

Q: What is the cost of the Title Insurance Policy?

A: Title search fees may vary depending on title conditions and location. These fees can be from $500 to $3,500 USD dollars per title examined.

Q: What kind of Title Insurance Policy is offered?

A: An ALTA format policy issued in the USA according to US law and jurisdiction. If any claim should arise from title, any and all claims will be handled in the USA Courts.

Q: What does the Title Insurance Policy cover?

A: Title Insurance Coverage for property in Mexico includes the following:

  • Assurance as of the identity of the legal owner of the property.
  • Identification of all existing financing recorded against the property.
  • Identifications of all easements, private restrictions and other encumbrances recorded against the property.
  • Assurance as of the existence of legal right of access to property.
  • Assurance for a lender that it has a valid and legally enforceable security interest in the property.
  • Indemnification against loss based on covered matters.
  • Indemnification as to the cost of defense against adverse claims and any losses that may occur as a result of such defense.

Q: When does the buyer receive the Title Insurance Policy?

A: After title is recorded in the local Mexico Public Registry of Property recording office where the property is located.

Q: Can the Title Insurance Policy be transferred to future buyers?

A: No. The policy covers the current buyer's title; any new title has to be insured again with a new policy.

Q: When does the buyer pay the premium?

A: On the day of the closing.

Q: How often do I pay premium on my Title Insurance Policy?

A: One time payment and is valid until transfer of title to a new buyer.

Q: Does the buyer need to be present at closing?

A: No. The buyer can appoint whomever they like through a power of attorney.

Q: What is the benefit when a developer has a Master Title Commitment (MTC)?

A: The primary benefit is that a title search is performed on the first property/unit or sale of the development and that title report is used for the remaining properties/units, reducing the title search cost and title search time. The buyer can then move directly to obtaining a title commitment and the closing.

Q: What other things besides chain of title does the PTR include?

  • Mexican Federal Zone concessions. The Mexican Federal Zone consists of an area of 20 meters from the highest tide inland. In Mexico, the Federal Zone can be concession to individuals, including foreigners, in order to have a private beach and access control. This mechanism brings added value to beach properties.
  • Utilities services paid such as water and other public services.
  • Mexican homeowners or developer fees that might effect the property according to CCR's
  • Lease agreements effecting property.
  • Ejido or agrarian regime effected property.

Q: Does the title company provide escrow service?

A: Yes. Mexico Escrow services are provided through title insurance companies in the USA. A flat fee is charged (an average $700 per transaction) and the amount may vary on Escrow Agreement conditions. All monies are transferred to bank accounts in the USA, and the escrow agreement will vary depending on particulars.

Copyright 2006 by GainClients, Inc.

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