Checklists are a part of our everyday life. We do checklists for our grocery shopping, for our Christmas shopping, when planning a trip, when planning a party, and so on. But there are checklists and there are CHECKLISTS, especially when it comes to your investment. This applies as well if you are planning to acquire real estate in Mexico, where certain legal requirements must be fulfilled to secure your investment and avoid later conflicts.
What are the main issues I should include on my checklist if I’m buying Puerto Vallarta real estate?
- A title verification should be carried out. The documents that the seller provides as proof of ownership over the property must be carefully reviewed in order to certify that the person who is selling you the property is the actual owner and that his title is not subject to any conditions or consent from third parties.
- It is important to verify that the property is free of any liens such as mortgages, otherwise you can lose it in case the debt or credit that caused the lien is not paid in due form.
- The property must also be free of any encumbrances such as easements, rights of way, leases or deed restrictions.
- You must make sure that the seller does not owe taxes for the property you are planning to purchase, otherwise the transfer of title cannot take place.
- It is important to make sure that the seller is in possession of the property and that he is able to deliver this possession to you without any difficulties.
And what are the specifics if I’m buying a condo?
- If the seller is a Mexican corporation, you must verify that it is duly incorporated and that the legal representative of that corporation has enough faculties to celebrate the contract and transfer the title, otherwise the contract can be declared null and void.
- You must verify that there are no debts regarding utilities and homeowner’s fees.
- It would be wise to look at the bylaws and financial statements of the Condominium before putting any money down.
- You must also be aware that depending on the type of property you are acquiring, there are many more specific details that should be verified such as: environmental permits, concessions in federal zone, land use, transformation of ejido into private property, and the list goes on.
As you can see, executing a proper real estate purchase contract in Mexico requires for all these conditions to be fulfilled, otherwise you might face conflicts that will cost you a lot of money or even the loss of all your investment.
This article is written by Roberto Ortiz Montellano, a licensed attorney who is a member of the Mexican Bar Association and the Mexican Association of Corporate Attorneys. Check his website here.