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As was indicated, the restrictions on the acquisition of real estate by foreign individuals, foreign companies, and Mexican companies with foreign investment must be taken into account.
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Along with the above, it is equally important to determine the best location to acquire property in Mexico before making the purchase. In order to make that determination, the following should be taken into account:
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a) Which states of the Mexican Republic offer tax incentives for companies that wish to become established in their territory. To obtain this information the Ministry of Economic Development of each state should be contacted;
b) Whether the property has adequate access roads;
c) Whether there is access to utilities and a sufficient water supply;
d) Whether it is near suppliers and clients.
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Once the property to be acquired has been chosen, the buyer should:
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a) Review the title to the property, which must be registered before the appropriate Public Registry of Property. The title deed for real estate consists of a public instrument granted before a notary public that records the acquisition by the owner of the property;
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b) Verify in the appropriate Public Registry of Property that the property is free of liens or encumbrances by obtaining a liens certificate. In Mexico, all real estate available for private ownership must be registered in the Public Registry of Property of the state in which it is located. In the Public Registry of Property all transfer of the property will be registered, as well as any encumbrances upon it, such as mortgages or attachments. In order to verify that a property is registered under the name of the person who claims to be the owner and that the property is free of
encumbrances, a liens certificate must be obtained. Such a certificate is issued by the Director of the Public Registry of Property;
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c) Check the National Agrarian Registry and obtain an agrarian certificate. In this regard it is very important to take into account that ejidal lands are not subject to private ownership, and therefore any contract by which ejidal land is acquired will be null and void and unenforceable since the ejidal lands cannot be sold. For this reason, in the case of any acquisition of land in rural zones, it is essential to verify in the National Agrarian Registry that the land to be acquired is not subject to agrarian regulation;
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d) Verify that the property has the land use (uso de suelo) zoning classification required by the buyer in order to carry out its activities. In order to verify the zoning of the property, it is very important to obtain from the municipality or, in the case of the Federal District, from the corresponding political subdivision, a zoning certificate. The zoning classifications vary from municipality to municipality, however they can be divided into the following types:
- Residential. In this zone generally only residential dwellings are permitted;
- Commercial. In this zone the installation of all types of businesses is generally permitted, such as stores, restaurants, banks, etc;
- Industrial. Under this type of zoning the installation of all types of industry is permitted.
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Each of the zoning types mentioned above have different sub-classifications that vary from municipality to municipality. Therefore, it is very important to verify that the type of business that you wish to establish corresponds to the zoning classification of the property;
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e) Request receipts recording the payment of real estate taxes for the last five years, in order to ensure that there are no amounts pending payment or, if necessary, request a tax certificate from the treasury;
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f) Request the receipts for the last five years recording the payment of water services to ensure no amounts are due or, if necessary, request from the treasury a certificate evidencing no charges in this regard are due;
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g) Do a topographical site survey and request a plot plan in order to confirm that the real area of the property, and the metes and bounds, coincide with the area established in the public instrument recording the ownership of the property;
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h) Verify that the property has sufficient water for your production processes. If a new well must be drilled, determine the possibility of obtaining such a permit from the National Water Commission. If the well already exists, verify that it is legal and up to date in payment of the corresponding fees;
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i) Test soil samples to confirm there is no contamination present. This testing should be carried out by a laboratory accredited by the Entidad Mexicana de Acreditación, A.C. (EMA), recognized by the Ministry of Environment and Natural Resources for carrying out such tests;
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j) If the property is inside an industrial park or subject to a condominium property system, carefully review the industrial park or condominium rules and check the amount to be paid in maintenance fees.
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Pursuant to the laws applicable in each of the states of the Mexican Republic, the purchase and sale or alienation of real estate must be recorded in a public instrument.
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Therefore it is important for the buyer to contract a notary public, preferably of the location of the real estate, in order to execute the purchase and sale before such person.
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Among the obligations of the notary is to verify that the property is free of liens and that nothing is owed for water services or real estate taxes.
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Information by Von Wobeser & Sierra, S.C. |
