Penner & Associates - Mexico Law Firm and Business Consulting for Mexico

For professional assistance & information on legal & business matters regarding Mexico and Latin America, please contact:

Please contact us at our Mexico offices located at:
Apartado Postal No. 9
San Miguel de Allende, Guanajuato, Mexico
TEL. US.: (800) 856-5709
Tel:  (415) 152-3648

e-mail E-MAIL


At our Phoenix or Mexico Offices
P.O. Box 42773
Phoenix, Arizona 85080
Tel: (623) 242-7442

e-mail E-MAIL

Montecito no. 38 Piso 37 Oficina 37
Edificio World Trade Center
Colonia Napolis C.P. 03810
Mexico, Distrito Federal

Tel: (55)5351-0438




(if you have any that are not included herein, please e-mail us with them)

1. Let me hold your money for you ! The only one you can possibly halfway trust is a federally licensed Mexican bank through a "Conditional Deposit Agreement", or a savings account or a checking account you control.

2. You will need to make a substantial down payment prior to closing in order to hold the property ! A small payment at most could be given and then only if the sum is placed in the hands of a a Mexican bank (see point 1. above), a notary public or the real estate (see point # )

3. We (the seller/developer) will permit you to finance the purchase with us, by our holding title until you pay in full !. Many people have lost their money and never received title after having paid the seller/developer for a parcel or residence during years, because the seller never had title, or did not get the permits to subdivide, or the developer never did the improvements and did acquire authorization to transfer title, or went bankrupt and the creditors took the title. The reasons for non-delivery are so numerous we could not list them all ! There are mortgage companies in the U.S. that will finance a second home in Mexico if the buyer is a U.S. resident. This finance company scenario permits you to take good title up front, pay off the seller, and grant a mortgage on the purchased property (or other property). If, on the other hand, you qualify to take title directly or in a Mexican business company, you can do a title retention sales contract (through a Mexican notary public) (whereby you will pay it off over time) but which permits the contract to be registered at the corresponding public registry of property (creating priority of lien) at the time of the initial closing.

4. Don't worry, we have all the permits necessary (or we will shortly get the permits necessary) to transfer the title ! When the seller shows good title and necessary permits, then you close the deal, not before.

5. Don't worry, I have good title, I have paid all my land taxes and there are no liens or debts against the property ! When you see it you can believe it.

6. All real estate agents are created equal ! Not so ! There is no licensing in Mexico of real estate agents. There is no educational requirement to be a real estate agent in Mexico. There is no difference between a real estate agent and a broker in Mexico. There is no recovery fund for deals that have gone bad in Mexico. Your on your own.

7. I am an registered real estate agent ! Except for the state of Sonora, there is no required registry nor is there a government agency that controls or qualifies the real estate agents in Mexico. There is an association known as AMPI (Asociación Mexicana de Profesionales Inmobilarios - Mexican Association of Real Property Professionals). Although this association does good work and speaks good of the agent that is a member, it has no manner to control or govern the members, since it is solely voluntary. There is a registry with the Federal Consumer Protection Agency (Federal Government agency) to register persons that are real estate agents, However, most agents have never heard of it much less being registered with it.

8. You can give me a power of attorney to handle the deal for you ! It is not normal to issue any kind of power of attorney but rather simply a listing agreement (independent contractor-employment agreement).

9. We use the same listing agreement that everyone else uses ! There are no prototype or format type listing agreements approved by any authority in Mexico. Each real estate agent in Mexico makes up his own or her own agreement for listing. However, the larger franchise companies like Century 21 and Remax many times do use the same (or almost the same) agreement will all of their agents in Mexico.

10. We can do a 50 year lease or 100 year trust, with renewals ! Leases on residential property rarely go above 10 years in duration. Leases on residential property in favor of foreigners in the Restricted Zone never go above 10 years (including renewals). Title trusts are normally for 50 years (never more than 50 years) (therefore known as 50 year, long term, irrevocable, title transfer, bank trusts) renewable for a one time additional 50 years, provided the purpose of use of the property has not changed (example:residential) and a renewal is applied for and granted prior to its expiration date.

11. You (foreigner) don't need to worry about a title trust, you can take the beach property in a Mexican company ! If everything else is ok (regarding the title), and the preponderant purpose or sole purpose of use of the property is business, then a Mexican business company could hold direct title to it. If the Mexican business company is created correctly and the nature of the business it will do permits (by the Mexican Foreign Investment Law) foreign shareholders, then you may acquire shares of stock in the company (to the limited permitted by the mentioned law).

12. The closing costs for the purchase of real estate in Mexico are similar to those in the U.S. ! Costs involved in transferring title of real estate in Mexico can easily be a sum, when calculated, close to 6-8% or more of the sales/appraised value of the property. If you involve an attorney (recommended), an accountant (recommended), a banker (recommended) or a title insurance agent (recommended), your costs will go even higher. If you involve a trust bank in Mexico (take title via the title trust) this trust bank will charge approximately 1% of the property value to accept to act as fiduciary, and 1% of the property value each year to hold the fiduciary title. If the property is commercial, there is a IVA tax (Value Added Tax) on the buildings located on the parcel.

13. Buy the Ejido beach property, it is really a good buy ! The price is so low ! If the property is cheap, there is a reason for it! You can not take residential title to ejido property for your residence. You can not use it for residential purposes.

14. Mañana ! That is tomorrow. Tomorrow never comes ! Time is money, money is time !

15. "Family Patrimony Designation" On Title! Don't worry, it just means it belongs to the family. Stop ! This property can not be passed in title to third parties, until that designation is taken off, via a lawsuit.

16. Buy it in a Mexican's name and have him sign an Irrevocable Power of Attorney. As a purported means to circumvent the laws, you would buy it in the name of a local citizen and have that person give you a power of attorney. Bad business. The owner would be able to eel it as he wishes and the agent would have to give an accounting of what he does with the exercise of the authority, including delivery of the money he gets from the sale.