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Fideicomiso and Title Insurance...
FIDEICOMISO - What it is and How it Works...
 A Fideicomiso is much like a USA Living Trust.
A Fideicomiso is a 50-year, perpetually renewable and transferable Bank Trust, through which Foreigners acquire irrevocable and absolute ownership rights to property in Mexico. This Trust is a legal substitute for deeded (fee simple) ownership and is provided specifically for non-nationals to own property in the formerly restricted zones (border and beach areas.) The Trust system of ownership is sanctioned by the Mexican government, provided for under the Mexican Constitution, and secured by the Central Bank of Mexico.
The Mechanics:
There are specific Banks authorized by the Mexican government to hold the Real Estate Fideicomiso. Title is delivered to the Bank, which is authorized to act as the Trustee. It then designates the foreign buyer as the Beneficiary of the Trust (you). The Beneficiary (you) retains the use and control of the property and makes all the investment decisions. It is your Trust and not the property of the government or the Bank. The Bank reviews all paperwork of the current owner/developer to ensure that the documents are complete and legal. The Fideicomiso is not an asset of the bank's. If the Bank should ever fail, the Fideicomiso is simply transferred to another authorized Bank.
 The Real Estate Fideicomiso may be offered either through:
a Master Trust or
an Individual Trust.
The Fideicomiso offered through Playa de Oro is an individual Fideicomiso, the most secure form of Real Estate Fideicomiso available.
Benefits:
The Beneficiary (you) maintains complete control over the trust (to buy, sell or mortgage, encumber, will or inherit) and is not tied to a Master Trust.
In an Individual Fideicomiso, every Beneficiary (you) is responsible for payment of their own taxes. A non-payment by one property owner would not affect another property holder in the development. But in a Master Trust the developer is responsible for payment of taxes, then appropriating them for reimbursement proportionately to each Fideicomiso held under the Master Trust.
Mexican developers DO NOT have any special dispensation under the law. If you do not have a Fideicomiso through an authorized Bank then you have, at best, a lease. Any other form of "ownership" such as share of a corporation, squatters, owning with a Mexican national partner, or any other gimmick is not legal and is trying to circumvent the law!
The Real Estate Fideicomiso is designed specifically for non-nationals to own land in the formerly restricted areas (beach, border region) and is the ONLY legal way to own this land. It provides the same legal rights and protection of ownership as a Mexican national has under the law. The Fideicomiso is set in 50-year increments, and is guaranteed renewable for perpetuity. Playa San Rafael and Playa De Oro offer irrevocable land ownership through an INDIVIDUAL Fideicomiso and absolute guaranteed protection through First American Title Insurance Company.
TITLE INSURANCE - Why Have It?
Title insurance is a special type of insurance that protects the insured from loss on a specific piece of property. A Title Insurance Policy provides security against the loss of land as a result of a title problem. Title Insurance can be purchased with or without limitations and exclusions. When purchasing property in the United States, most Banks and Mortgage companies require Title Insurance prior to granting a loan.
 It is equally important when purchasing property in Mexico. A Fideicomiso (Living Trust) DOES NOT take the place of or exclude the need for Title Insurance. (A Fideicomiso can be dissolved in the event of Fraud, Errors and Omissions and certain Government and Ejido claims.) When purchasing Title Insurance in Mexico, be sure to read the master policy thoroughly and check for limitations and exclusions.
Some title insurance companies insure only the Fideicomiso (Living Trust) and exclude fraud, gov't and Ejido claims, and even certain developer liens. This should not be acceptable. At Playa San Rafael and Playa de Oro, First American Title Insurance does not exclude any of those items and offers total Title Insurance protection! If the Title Company is not willing to take those risks after thoroughly investigating the matter, NEITHER SHOULD YOU!
When purchasing title insurance in Mexico make sure that the policy is on the land not just the Fideicomiso.
Playa San Rafael pays for First American Title Insurance to issue individual policies to every owner on their lot purchase.
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