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Why Do Mexican Real Estate Trusts Expire and What To Do About It – Baja Legal Advice

Oct 7, 2019 | Baja Legal Advice | 0 comments

Talking About Old Trusts

When the Mexican government grants a permit for a bank to create a fideicomiso on behalf of a foreign national, it instructs both the bank and the Notario to includes a number of obligations that are included within the clauses of the fideicomiso, while granting a 50 year term for the trust beneficiary owners (renewable) to use and enjoy the property held under trust.

The first Fideicomisos began in 1973, and they all expired around 2002/3 and most, not all of them, where renewed months ahead of the expiration date on them, thus there are a number of 30-year fideicomisos created from 1990 to 2000 that are bound to expire anytime soon.

  1. Why does the fideicomiso expire? Because the term granted in the permit has been reached or has elapsed already, 
  2. Why aren’t banks warning clients about this? Because they are neglectful and eventually it winds up costing the client, not the bank, to renew.
  3. What is involved in getting the fideicomiso renewed: A) Approaching the bank and instructing them in writing to seek a new trust permit; B) Paying the bank its fees (agreed within the clauses of the trust agreement); C) Paying the government fees to grant a new permit with a fresh 50 year term. D) Getting a new survey, No lien certificates and a new appraisal (I know its ridiculous!): E) Paying notary fees; F) Pay state recording fees, and G) Recording the trust with the National Register for Foreign investment.

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Rafael Solorzano - Baja Legal Advice

Rafael Solorzano
Attorney at Law / Licensed Exclusively in Mexico
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