Ask a Realtor: Can Foreigners Own Property in Vallarta?

Michael Green – Boardwalk Realty

For nearly a century, foreigners have been unable to hold the deed to land near Mexico’s borders or shoreline. In this edition of ‘Ask a Realtor,’ Boardwalk Realty Broker Michael Green answers questions about foreign ownership of Puerto Vallarta real estate through the use of a Bank Trust.

Q: Can a USA or Canadian citizen own real estate in Puerto Vallarta? – Peter H. Seattle

A: Hi Peter, you sure can, by placing the property in a bank trust, which is called a “Fideicomiso.” Title of the property is transferred to a trust with a Mexican bank acting as Trustee. The Trust Agreement is formalized by the issuance of a permit from the Mexican Ministry of Foreign Affairs.

There are three parties to the trust: The seller of the property is the Trustor, the bank is the Trustee (Fiduciario), and the buyer is the Beneficiary (Fideicomisario.) The buyer is designated as Beneficiary in the Trust and the beneficiary rights are recorded in the public record by a Notary Public. The Trust is currently for a term of 50 years and can be renewed for additional 50 year terms.

Many people have the mistaken belief that the trust is similar to renting, or a lease, this is NOT the case! The bank holds the property in trust and follows your instructions. The property is NOT an asset of the bank, it is your asset and the trust is for perpetuity. As Beneficiary, you have the same rights, use and enjoyment as a Mexican National, and can sell or rent your property without restriction, and keep the proceeds. You may also transfer your rights to a third party or pass it on to named heirs.The bank charges the person desiring the Fideicomiso an initial fee of approximately $500 USD for signing the agreement and establishing the Trust and a yearly fee of approximately $460 USD per year for administering the trust.

You are free to choose which bank you prefer to hold your bank trust. Your local AMPI Realtor will be able to coordinate all the paperwork involved in this process. You will just need to provide photo identification, and fill out a very basic bank form with your personal information and instructions on how you wish to hold the property and who you want to pass it to in the event of your death.

I recommend using a bank that will lock in the administration fee, and has a local English speaking representative. You can also request a clause be added to your trust allowing you to attend and vote at the Homeowners meetings without getting a proxy every year from the bank.

Some people complain about the trust process, but there are benefits: As part of the closing process, the bank’s attorneys review the deed and are able to sign on your behalf. It is always nice to have another set of trained eyes review your deed before signature.

Also, the trust separates the asset legally, much in the way a “living trust” does in the United States. Finally, in the event of the death of the buyer (beneficiary), the property automatically reverts to the substitute beneficiaries, avoiding lengthy and costly probate procedures. At some point, the law requiring a trust may be amended, allowing foreigners to own directly in their names and doing away with the trust. Last year, this bill passed in the Mexican House of Representatives and was sidetracked in the Senate.

Michael Green is the Broker of Boardwalk Realty. Active in local and national Real Estate boards; published author and acknowledged expert on Puerto Vallarta Real Estate, Mike moved here in 1997 to take advantage of the unsurpassed lifestyle PV offers. Email Mike at michael(at)boardwalkrealtypv.com, or visit their website at BoardwalkRealtyPV.com.

UPDATE UPDATE UPDATE

Over dinner last night with Kristine & John Scherber, John explained that those laws do not apply to San Miguel. You can own property in your name, by passing the trust. You can own the house and the land. There are no mineral rights, however. The state owns the mineral rights. He did suggest strongly getting a will. There is no right of survivor law in Mexico. If your will doesn't transfer the ownership to your spouse, then the property goes to the state.

Patsy's Place

Sunday was a fun day. A whole bunch of us got in cars and rode out into the country somewhere near Atotonilco for a Easter Lunch at Caterer Patsy. They served libations, pou pous, and then a Salmon and/or ham with salads, then a desert of ice cream, strawberries (fresca) and whipped cream. At the end of the evening, the winners of the best Easter hat were announced. It was a fun day and about 84 degrees.

We sat around the tables and introduced ourselves. There was Deb, a former tax attorney, who rode in the car I drove. I asked her a stupid question near the end. I turned to her and said, "Deb whose car do you come in? I met Norm and Nancy Karp who leave for New York on Tuesday this week. Norm was a jeweler. 

I met the stunning Terry Cameron Baldwin who wore a beautiful dress and hat to match. I learned she is a writer and has a book coming out this fall: “ALL THE GHOSTS DANCE FREE"

Terry writes, "The book is a memoir inspired by the last years of my father’s life, spent with me in Mexico. It describes how a lifetime of easy compatibility cracks under the strain of living together again. Themes explored are aging and dying, alcoholism and suicide, generational patterns and the possibility of an authentic life."

I met the Kay, who lives San Miguel, and had a wealth of information about restaurants and places to exercise.

Gary and Sue Reid were the invitees. They organized their group of twenty or so.

It was a pleasure meeting Matthew and Kim Clifton owners of Tierra Antigua located in Tucson, one of the fastest growing realtors in the Southwest.

And now here is the winner of the Easter hat Contest:

Road Trip to San Miguel (8)

We moved into Casa Sundance today. I figure this is the 13th place we spent time since Jan 1st. That is called living out of a suitcase.

Spent part of the evening at Gary and Sue's taking pictures of the parade featuring the 14 stations of the cross. When we got home we went up on the upper terrace to take in the city lights. We have a beautiful view.

Signs Preceding the End of the World

Jonathon Sturgeon reviews Signs Preceding the End of the World, in Flavorwire

What will we make of North American civilization, in the broad, continental sense, when it is gone? When its states have vanished or dissolved or slowly mutated into other states, how will we remember the borders that once existed between them? Or, for example: how will the war of attrition waged by the U.S. along the border of Mexico be understood in two or three centuries?

These are questions we could leave to congressman, television pundits, gun-toting ranchers, historians, whoever: there is no shortage of American conservatives who have made their reputations and livelihoods off borderland speculation and its attendant scaremongering. But, though we rarely do it, we could also turn to artists and novelists to understand how the state between states projects us into the future. Why shouldn’t we? The territory between the U.S. and Mexico is as much a zone of language as it is a disputed territory. And the novel, especially the poetic novel, is the best place we can turn to watch language morph between states.

In the hands of Yuri Herrera, who has been called Mexico’s greatest living novelist, the border between Mexico and the United States becomes an event horizon. Or at least in Signs Preceding the End of the World, his first and only novel to be translated into English — deftly, by Lisa Dillman — the perilous journey across the geographically and politically fraught borderland is as much about crossing a threshold of time and being as it is entering a dangerous new country. In Herrera’s novel, as in Andrei Tarkovsky’s Nostalghia, nation states are equivalent to states of being. Reading Signs Preceding the End of the World is like watching a living thing violently yet breathtakingly metamorphose in front of your eyes.

The novel begins, ends, and is carried through entirely on the shoulders of the Atlas-like Makina, a character, a young woman, who will be read, discussed, and emulated for decades to come. Wise but curious, tough but necessitous, resilient but not impervious to suicidal thoughts, Makina is tasked with delivering a note to her brother, who has foolishly absconded to the U.S. after he is tricked into believing there is land for him there. When we first meet her, she narrowly misses being swallowed into a sinkhole. When we leave her, she has been swallowed into a new existence.

Along the way, Makina meets a procession of figures, a dozen Virgils — crime lords, a coyote named Chucho, even a corpse — who usher her almost ceremoniously toward the border. And the nearer she is to the border, the more intensified the violence, literal and poetic, becomes. This accounts, too, for the novel’s noirish, hybridized prose and its strange-but-spare poetic interpolations, such as when Makina “verses” instead of exits or leaves a place. Not only does it feel as if she is transversing a terrain; it also implies, in the sense of Jean-Paul Sartre, that the novel contains no exit.

Given that they exist on a threshold, Herrera depicts the people on the border, toward whom Makina is naturally inclined, as transitional — not only between states, but between past, present, and future:

They are homegrown and they are anglo and both things with rabid intensity; with restrained fervor they can be the meekest and at the same time the most querulous of citizens, albeit grumbling under their breath. Their gestures and tastes reveal both ancient memory and the wonderment of new people. And they they speak. They speak an intermediary tongue that Makina instantly warms to because it’s like her: malleable, erasable, permeable; a hinge pivoting between two like but distant souls, and then two more, and then two more, never exactly the same ones; something that serves as a link. On the other side, in the United States, things are appropriately alien. (That is also to say: pompously Roman.) I can think of no recent novel, in fact, that alienates the U.S. so convincingly, as in the case of this explanation of baseball as military simulation:

Every week the anglos play a game to celebrate who they are. He stopped, raise his cane and fanned the air. One of them whacks it, then sets off like it was a trip around the world, to every one of the bases out there, you know the anglos have bases all over the world, right? Well the one who whacked it runs from one to the next while the others keep taking swings to distract their enemies, and if he doesn’t get caught he makes it home and his people welcome him with open arms and cheering. At little more than a hundred pages, Signs Preceding the End of the World has been called an odyssey, but I don’t buy it — its protagonist is not homeward bound. Either way, what Makina finds of her brother, of herself, on the other side of the event horizon, in the infinitely dense black hole called the United States, is a tragically common occurrence. But as Yuri Herrera proves: it has to be read to be believed.

Road Trip to San Miguel (7)

El Pegaso San Miguel

We made it! Web put on over 3,400 to the Clampett mobile. For a 2001 Tribute, loaded to the gills with our stuff, she ran like a top averaging somewhere between 25 and 28 MPG at speeds of 75 to 90 miles per hour, hour after hour.

We arrived in San Miguel in the sun at 4:30 local time, having spent 8 hours driving. Going through customs and getting the car permit were a piece of cake. It just took three hours. We hit Bridge One at 5:30am,  It's not an easy place to navigate. We made some false starts, but the girly navigator (Bev) got us all the way here.

First thing we did was go out to and have pizza for Bev and pasta for me.This morning we awoke to the sounds of maybe a dozen different birds, singing in the morning sun. The bells called Catholics to prayer, and we thanked God for the safe trip, our health, our friends, this beautiful city,and our marriage. This morning coffee at El Cafe de La Mancha

Road to San Miguel (6)

We arrived in Laredo last night at 9:00pm we lost two hours from time change. The Clampett mobile now has over 2800 miles on it since leaving PDXland. We drove at 80 mph much of the time from El Paso to Laredo. That's the speed limit most of the way! I was tired when we arrived. Bev spelled me for an hour and then another hour negotiating San Antonio. She really helped. I think I nodded off when I was driving for a brief second. It scared me. I said, "Whoa, I need you to take over, babe."

We are staying at La Posada, hotel with a colorful history. Erected in 1916. La Posada has 206 rooms and is the largest hotel in Laredo. It originally was Laredo's first high school, then an elementary school and finally purchased in 1961 for a hotel.

La Posada Hotel in Laredo

Sunday morning we cross the border and head south for over 500 miles.See you there!

Road to San Miguel (5)

We have put on 2,000 miles on the Clampett mobile and are spending the night in El Paso. We left Scottsdale at 10:00 and pulled into El Paso at 5:00. That was probably the most boring drive. You drive along at 75 to 80 MPH, for mile after mile through mostly flat country of desert and cacti. The nice thing was the sun and the temperature.

We are getting homesick for our our new home and fixing the terraces up with plants and hammock. We read the weather is great. Lots of activities scheduled for the festivities of holy week. Both of us are yearning for the new adventure.

Tomorrow we arrive a day early in Laredo and get ready the crossing and looking forward to seeing our San Miguel friends again.

We had a wonderful time at Sandi and Gerry's house. The backyard is a show stopper. A pool and beautiful desert plants, plenty of seating in the sun and shade, palms, tangello and orange trees, and grapefruit larger than two fists growing on the tree. A treat was a shared meal with Donya Wiland. Gerry and Sandi fixed ribs and while Gerry was disappointed, I thought they were very tasty.

We will be in San Miguel on Sunday the 29th. praying all goes well at the border crossing.