Who are the members of the team required to transfer property in Mexico?
The team in Mexico can include: the real estate agents, notary, attorneys for buyer and seller, transaction coordinator, escrow company. When needed, specialists such as land surveyors, structural engineers, and tradesman such as plumbers and electricians can inspect the property.
With foreigners who need a trust, and nationals who choose to put their property into one, the additional team member is the bank administrator of the trust.
Who is the Notary?
He is a specialized attorney who is appointed to practice notary law in a Mexican state. The notary has other jobs besides handling the transfer of real estate property, including collection of capital gains taxes, witnessing wills, business contracts, leases, etc.
The notary does not represent the buyer or seller, but he is expected to not favor one over the other, he is to be fair and clear to all parties.
In this market, there has evolved the practice for many agents to advise their clients about transaction coordinators who may work with the notary, but not be an employee. The transaction coordinator has become popular for bilingual communication with foreigners.
When the transaction coordinator is to be a part of the notary process, he is paid a fee by the notary to interact with clients and process the paperwork. The notary has to sign and approve all formal documents.
Who Does the Due Diligence?
A buyer or seller expects his real estate agent to be his advocate, and the attorney whom he hires to advise him of the legality of the sale by examining the recorded documents of the seller and the new documents created for the buyer. The normal agent cannot do this due diligence, as he is not an attorney nor knowledgeable in the federal and legal requirements for transferring Mexican real estate.
Remember that agents are not educated, trained or licensed here as they are required to be in the rest of North America. The legal process of buying and selling is under Roman law, in particular Napoleonic Code.
A foreign buyer or seller from the US or Canada should not rely on what they understand about English law for a purchase here.
A buyer or seller from Europe will have some familiarity with the notary system and the real estate agent requirements in the European Common Market. Notaries are used for real estate transfers in Europe and Latin America.
- A seller or buyer should never assume the notary is his advocate nor think he doesn’t need his own attorney. The notary represents the government and cannot be an advocate for a buyer or seller in the same transaction.
- The transaction coordinator, in my opinion, should not be the attorney for either the buyer or seller. He should be a neutral third party to avoid conflicts of interest.
- If the transaction coordinator is paid by the notary and by the seller or buyer (as their attorney), who does he represent? How can he represent the government and a principle to the transaction without there being a potential for a conflict of interest?
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This article is based upon Flex MLS reporting, legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his own due diligence and review. If you have any other questions, contact me through my website.Harriet Murray