the settlement
company ®
_________________________________________________________________
Zaragoza
y Guerrero, San José del Cabo, B.C.S., México 23400
TEL:
011.52.114.2.20.06 FAX: 011.52.114.2.20.16
E-Mail:
info@settlement-co.com
TITLE
SEARCH AND INSURANCE IN MEXICO
by
Linda Neil
Title
insurance, so common in many parts of the United States and Canada, is in its
infancy in Mexico. While the Public Registry system operates in much the same
manner as in other parts of the world, the actual work is still performed
manually. Deeds are handwritten into large books, a computerized system is
still a dream and title plants are non-existent. Maps of subdivisions and
properties are uncommon or incomplete.
Thus, information available to create a
chain of title for a specific property requires a visit to the local public
registry office in the municipality where the property is located, and may
require hours of laborious research and investigation to determine if the
property is private property, who the sellers are, and if there are liens or
encumbrances on the property.
Several major United States title
insurance companies have entered the marketplace and are now doing searches in
certain parts of the country. One Mexican insurance company is also offering a
policy. For those who wish title insurance, we need to have a general
description of the property, the name of the current holder of title,
preferably a copy of the deed, and the approximate amount to be insured. With
this information, we are able to investigate the existence of any existing
title data and confirm whether or not title insurance will be available for the
specific property.
Many people have said that title
insurance is unnecessary in Mexico. This is not correct. Those who acquire
title in fee simple - in the interior of the country, rely upon the Notary
Public to search title. Title search, in this case, consists of requesting and
receiving a Certificate of No-Liens on the property, which is issued by the
Public Registry Department. This certificate, plus the Seller’s declaration in
the deed that the property is being delivered free and clear of liens and
encumbrances, are the only assurances that title is valid. Should the
Certificate of No-Liens be issued in error or due to oversight, or should the
seller misrepresent the property, a civil suit against the seller may be the
only legal remedy for resolving problems.
Those who acquire property in the Mexican
Bank Trust (fideicomiso) have felt comfortable in relying upon the trustee
bank to research title. This is also inappropriate. The standard fideicomiso
(bank trust) document will have a disclaimer in which the bank will supply a
power of attorney to the legal representative of the beneficiary of the trust
in order to settle title matters or problems, but the trustee bank will not be
the responsible party if, indeed, title problems arise.
A title insurance policy will guarantee
four important matters:
1. That title to
the estate or interest described in the policy is as stated therein;
2. That there
are no defects, liens, or encumbrances (registered easements, etc.)
other than those stated in the policy;
3.
That title is marketable;
4.
That there is right of access to and from the land.
The standard exclusions from coverage in
both the U.S. and Mexico are:
1. Laws,
ordinances or regulations restricting the usage of land (zoning, construction,
environmental protection - contamination)
2.
Rights of eminent domain - unless recorded prior to date of policy
3.
Defects, liens, encumbrances, adverse claims
a.
Created, suffered or agreed to by claimant
b.
Not a matter of public record but known to claimant
c.
Created subsequent to date of policy
4.
Taxes or assessments not shown as existing liens
5. Facts,
rights, interests or claims not shown by the public records but which could be
ascertained by an inspection of the land or by making an inquiry of persons in
possession there of.
6. Easements,
liens or encumbrances, or claims thereof not shown by public records but could
be discovered by a physical inspection thereof,
7.
Discrepancies, conflicts in boundary lines, shortage in area, encroachment or
other facts in which a correct survey would disclose.
Exclusions from coverage (Mexico only)
1. Water rights
or claims or title to water (All water rights are owned by the Mexican
government);
2. All
substances and deposits described in article 27
of the Mexican constitution, the dominion of which is reserved to the Mexican
government; (i.e.) minerals, petroleum and related hydrocarbons, salt and
precious gems;
3. Confiscation
or expropriation by insurrection, rebellion, revolution, civil war, military or
usurped power, through the efforts of a political, revolutionary constituted
government of the nation or one of itssub-entities;
The powerful reasons for obtaining a
policy of title insurance, when available, are to insure against error by
searchers, fraud and forgery in deeds. If a mortgage or pledge guarantee is
involved and the lender is a foreign institution, a policy of title insurance
will generally be required in order to make the loan.
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ABOUT THE AUTHOR:
Linda
Neil is the founder and Chief Executive Officer of The Settlement Company
located in Los Cabos, Baja California Sur. It is the original escrow company in
Mexico and is dedicated to processing the trusts and title transfers of Mexican
real estate for foreign buyers and sellers. Mrs. Neil, a real estate broker
licensed in California, has spent more than twenty-five years in Mexico in the
development of real estate and related activities. She frequently presents
seminars on the subject of real estate ownership in Mexico and is a member of
AMPI, NAR and FIABCI. She holds PROFECO Certificate 00065/96 based upon
demonstration of her qualifications and business practices. The Settlement
Company handles transfers on properties located throughout Mexico, makes annual
property tax and bank payments and provides title search and title insurance on
properties on properties in Mexico.
For further information contact: The
Settlement Company, Telephone: U.S. & Canada: 1.877.214.4950 Mexico: 01.800.627.5130
Facsimile: 011.52.624.142.2016
Articles/titlesearch