The Closing Process in the Riviera Maya

Before we explain The Closing Process in the Riviera Maya, we would like to reinforce that, as stated by the National Foreign Investment Law, a Real Estate Bank Trust is the safest and only legal way to hold the residential property title in México.

In a Mexican Real Estate Bank Trust, you are the sole beneficiary of your Mexican property; you and a trustee entity are named in the deed. You can treat the real estate as if you held the title yourself; this includes building equity, renting, selling, passing it down to other beneficiaries, making changes to the home, and having extra protection provided by a Fiduciary entity.

For all Residential- Tourism Properties

The requirement is to set up a REAL ESTATE BANK TRUST. The Real Estate Bank Trust, also known in Spanish as “Fideicomiso,” is a trust agreement that you establish with a Mexican bank to hold title to a property (both you and the bank are named in the title documents) (works similar to a Family Trust or Living Trust entities known in USA, Canada or Europe).

This trust deed assures foreign property buyers of all the rights and privileges of ownership while acquiring extra protection from the Federal government (Ministry of Foreign Affairs Offices and the Secretary of Economy).

Advantages of the Bank Trust on The Closing Process in the Riviera Maya

• Allows the property owner to hold the property in perpetuity.
• The bank trust is a 50-year trust agreement that can be renewed every 50 years by you or your heirs by simple request. The renewal procedure is an automatic administrative task.
• The Bank Trust can be held by one or more individuals of foreign citizenship or by an entity such as an LLC, Living Trust, or a Family Trust (IRA fund contracts would be subject to extra administrative and legal requirements).
• You can transfer your rights in the bank trust to another foreign buyer.
• One contract can hold more than one property in the same deed, but the investments must be in the same jurisdiction.
• You can enjoy, use, rent out, improve upon the property, expand, build and sell the Mexico Real Estate and reap 100% of the profit.
• Your family or any person can also inherit the trust by simply naming them in the Bylaws of your contract as secondary beneficiaries in the event of your death. This chapter is the only one that would be subject to be modified in your deed as many times as required; however, changing the owner’s names or adding additional owners could be done, but not as simply as it happens with the beneficiary chapter, this last subject would require the performance of a new sale procedure and draft a new deed (new closing costs would be involved as well)
• The beneficiary chapter will substitute the need to draft a Mexican will; there is no need to pass probate before any Mexican Court is required, plus there is no inheritance tax in Mexico.
• There are tax advantages to capital gains taxes when you sell. The big deal in Mexico is that you could claim a 100% Capital Gains exemption without paying double taxes in the US or CANADA. This means that once you sell the property and are eligible to exempt capital gains, you can collect 100% of all your profit without paying capital gains in Mexico, the US, or Canada.
• The bank trust is easy to maintain by paying an annual fee of around $550 to USD 600 to the bank. The annual fee can be paid in a local bank or via domestic or international wire transfer.
• Your property cannot be taken from you for any reason as long as you use it for residential purposes, and you can treat the property as if you held the title yourself. The bank trust will act as a safeguard for your property ownership. Renting out your property and generating profit is 100% authorized, and you are welcome to do it.
• When holding property with an area exceeding 2,000 sqm (21,527 Sqf), you must follow special rules and regulations; specifically, a commitment letter of investment must be submitted to the Ministry of Foreign Affairs offices.

The Closing Process in the Riviera Maya

The process usually takes 20 to 30 business days from when the law firm initiates the paperwork until you can obtain the title. It’s crucial that both the buyer and the seller promptly provide all necessary documents to ensure a timely closing.

Until you can take the title, it is very important that both the buyer and the seller supply all the necessary documents promptly to close on time.

1.- You are purchasing residential property held in a private deed.

2.- You are assigned a specific delivery date in your sales agreement, and the developer/seller honors such obligation strictly.

3.- The developer/seller has a Condo Regime Deed, Property´s ID, and Property Tax Payments fully processed and available at least three weeks before you are called to formally possess the unit.

Suppose the items mentioned above are not available simultaneously. In that case, you can take physical possession of the unit and start taking the title later when point 2 is fully accomplished. The timeframe between taking possession and taking the title is an important topic that should always be discussed with your sales agent/developer or seller and ideally included in your sales agreement. This will ensure that you are fully aware of and particular about your rights as a property purchaser in México.

The time frame that might elapse between taking possession and taking the title is a subject that must always be discussed with your sales agent/developer or seller and preferably be consigned in your sales agreement so you can be fully aware and confident of your rights as a purchaser of property in México.

Documents needed for The Closing Process in the Riviera Maya:

• Passport (front page)

• Drivers’ license

• Copy of a recent utility bill showing your home address (preferably showing your name also)

• Plus, the completion of a Buyers Data Form provided by our team Inter Lex Mexico

Do I need to be in person to sign my closing deed?

Fortunately, the whole closing process can be organized and performed long-distance, meaning that you could grant your Attorney a Limited Power of Attorney to assist you at every stage of the closing until you sign the closing deed on your behalf.

Upon request, the law firm will email a power of attorney form. The email will include special instructions on notarizing and legalizing the POA form.

Once the firm staff collects the buyer’s and seller’s information and the initial payments—closing costs—have been made, we will start the process with the Bank Trust by ordering the permit from the Secretary of the Foreign Affairs Office. 

This process takes approximately ten business days. During this time, the attorney will also start processing and collecting all permits and municipal and state certificates needed for the closing.

When the Trustee-Manager receives the permit from the Secretary of Foreign Affairs Office, your lawyer will start the drafts for the closing deed. The final deed will then be reviewed by the three legal groups working for you – the lawyer/closing attorney, the Public Notary, and the trust area of the bank. This works to ensure that everything is 100% correct.

You will be notified of the actual closing date when all the closing paperwork is ready. Usually, the total closing costs, including legal fees, the fee for setting up a bank trust, all rights payments, certificates, and transfer tax, will run approximately 6% to 8 % of the purchase price.

We provide the purchase price of your unit, and one of the closing attorneys will provide you with a calculation example.

After The Closing

After closing (once your closing deed is signed by all parties, Seller, Buyer, and Trustee-Manager), the Public Notary will issue a notarized copy of the closing deed. This document will be your first proof of ownership.

You can use this document to change your utility accounts. A scanned version of such document will be sent to your email – upon request – and immediately after obtaining it from the Public Notary Office.

The final bank trust deed containing an electronic folio and copy of all certificates and exhibits will be issued by the Public Registry within three months after your closing date. Please consider that this final step will depend on the internal schedule of the government office known as the Public Registry.

Do not hesitate to contact us if you want to invest and need further information on any property. You can call (+52) 984-128-4123, message me through this Whatsapp link, email me at info@mayanrivieraliving.mx, or visit our properties by clicking here.