Baja Real Estate Acquisition is a very important and often misunderstood topic. I recently responded to an article about the people in Punta Banda who “lost” their property, 20 years ago, in punta Banda south of ensenada, due to a land dispute, on the property they were leasing that they built homes on. The area continues to be riddle with title issues and unlicensed real estate agents who sell properties with no title. It is an area where I alway recommend extreme caution. The article claims this was due to the Mexican government and unscrupulous developers. while the later is true it could have been avoided with proper representation by a Realtor® Licensed in Baja California.
The article made many incorrect claims regarding leases good for 50 years and no mention on the correct method to hold real title in the “protected zone” (border areas and coastlines). Below is the text from my response to the article:
Non-nationals, with a proper visa (including a tourist visa), can hold title to real property, in the protected zone, through a vehicle that many in the US use as well, a family trust. In Mexico it’s called a fidecomiso and is issued by the foreign investment administration of mexico, through one of the national banks of Mexico (like Bancomer, Banamex, etc…). The process is underwritten, as all legal transactions for real property should be, by one of the locally appointed “notarios”. There are significant costs associated with this process and it can take 6 to 12 weeks to complete the transfer of title (trust rights).
Leases, while they can be “written” for any time period (like 99 years) are only LEGALLY ENFORCEABLE FOR UP TO 10 YEARS from the date of signature. At that point either party can terminate the agreement. Anything built on the land, that is permanently affixed to the land (e.g. with a foundation) is the property of the land owner. I never recommend “buying” property on leased land from the lessee because they can not sell you what they don’t own! If you want to own the property it would be best to go the owner of the land.
Had any of these people used a Real Estate Agent, Licensed by the State of Baja California, they would have been aware that there was no security in their transaction. Furthermore, no bank would have financed any of these transactions nor would have title companies provided title insurance, which is available.
Secure acquisition of real property in Baja California is possible and there is a safe path to to title. But due diligence, proper representation and proper process are essential to eliminating the significant risk of “going it on your own”. Escrow, title insurance and proper representation are available and if it “sounds to good to be true” it likely is. For more information please contact me for a personal and individualized consultation and request my buyers briefing .
