Plain and simple, foreign home ownership is a risk. First and most importantly you must decide how much money you are willing to lose.It should be an obvious point, but I am surprised at how naively many people approach foreign ownership.
I blame cable television.
HGTV’s “House Hunter’s International” and “Mexico Life” make it seem so easy and so irresistible to buy a home.
Nonetheless, the old adage is true:Don’t believe everything you see on television. The first thing to remember is the laws and legal systems here in Mexico are not the same as the Canada, the US and Europe. In North America you can be realively assured your rights and interests will be protected.
It’s not necessarily the same here.
The story of expatriates in Tulum, Mexico serves as a cautionary tale. Tulum is located in southern Mexico near the tip of the Yucatan Peninsula.
This pueblo was once remote, beautiful and unspoiled by hotel developments. The daytime temperatures range between 80 and 90 degrees and the nights are cool and breezy. Historically, Tulum was a center of Mayan civilization. The area is surrounded by striking Mesoamerican ruins.
In the beginning of the last decade, French, Italian, Dutch and Portuguese expatriates seized opportunities to build lavish coastal homes. In Tulum, life is easy, breezy and the local cuisine is off the charts. Cue HGTV and other expatriate media and within a decade the land prices began to soar.
As a result, local citizenry; greedy entrepreneurs and deceitful opportunists also sensed an opportunity to “gana mas dinero” (get paid!). Eventually property claims and counterclaims were filed with local courts. Returning expatriates were surprised to find their homes had been seized. Owners were evicted and furniture dumped on the streets.
At this moment the issue is still unresolved. Given the pace of justice in the Mexican legal system – it’s going to be a long time before all problems are resolved.
The incident is horrible, but as with so many things in life – it’s complicated. As North Americans were are inclined to side with our compatriots in the US, Canada and Europe.
On the other hand, from a Mexican perspective, the land is part of their patrimony.
For generations, hard-working Mexicans in Tulum have not had access to the type of prosperity we simply take for granted in North America. This is the land of their grandparents and parents; these folks worked for generations as anglers and laborers.
Unscrupulous real estate developers got rich and the townsfolk received nothing. From my perspective, there were a couple of key mistakes.
The coast belongs to the Mexican people.
The first mistake is the purchase of coastal property.
Quite simply, coastal property = high risk.
Foreigners are forbidden from owning property within 30 to 35 miles of the coastline of Mexico.This is with good reason.
If Mexico allowed foreign ownership along its coasts, within a couple of decades most of it would be exclusively owned by Americans from California and the East Coast. For example, my hometown, Chicago, has an ordinance that protects its shoreline from development. I believe the directive says the shoreline “shall remain forever free and clear…for the benefit of the people of Chicago.”
Foreigners can “own” coastal property via a Bank Trust (Fideicomiso in Spanish). This is an arrangement between the property seller; the property purchaser and the Bank. The Bank serves as the Trustee (Fiduciaro) and the Buyer is the recipient or Beneficiary (Fideicomisario).
The Bank is Essentially Your Parent or Guardian.
You must obtain permission to sell and transfer rights.
On the one hand, as the beneficiary, you’ll be able to purchase your dream home. You’ll have a stunning ocean view and beach access, but you are still at the mercy of your parent.
Be that as it may, there are good parents and bad parents. I own a home well inland in the city of Colima. I have an advantage because I am married to a Mexican citizen. Together, we are owners.
My situation is a bit unusual, but there are excellent options for those who want to lead an authentic life in Mexico. It’s important to realize there are many developments accessible to foreigners. From my perspective, it is the best way to have a genuine experience. My neighbors are friendly, aloof, maddening and loud – like any neighborhood.
This is what makes it authentic.
Buy a Home? Some Basic Advice.
To begin with, you should have a understanding of Mexican Spanish.
It also helps to have access to a good dictionary and a trusted friend or family member to assist you with the process. Similar to a home purchase in the US, I had several large packets of detailed information (in Spanish) to read.
Additionally, I had to hire an attorney who speaks Spanish and specializes in Mexican real estate transactions. For additional peace of mind, I also asked my husband and in laws review my information.
My packets contained tax requirements and homeowner rules.
Similarly, Mexican contract language has subtleties and variations. Unless you are willing to invest ample time and money you are better off with VRBO or another hosting service. Here are some excellent websites that will help guide you: