As Foreign Property Owners, What Rights Do You Have Under Mexican Law?

Given New USA Policies – Could I Lose My Property in Mexico?

By: Agustin Galindo, Attorney at Law*

During these times of economic and political changes, many foreign investors are worried about losing their real estate properties in Mexico as a reprisal to current USA policies against Mexican illegal immigrants and threats of governmental retaliations against companies that invest in Mexico (i.e., Carrier, Ford or General Motors for example).

Many USA citizens and other foreigners have invested in second residences, vacation property, or own hotels or Bed & Breakfast inns in Mexico. Other foreigners live in Mexico full-time and own property.

My response as a Mexican attorney: If you are a property owner in Mexico, whether your property is on the border, coastline or interior; or whether you own it through a bank trust, directly, or through a Mexican corporation; your ownership and possession are protected by one of the most essential guaranties of the Constitution of Mexico (Article 14), that restricts the retroactive application of any law and provides for due process of law.

Thereby, in accordance with the Mexican Constitution, if you are a property owner in Mexico, regardless of the location or type of ownership (bank trust, direct, or through a Mexican corporation), if any new law is issued or the current laws are amended to restrict such ownership, that law or amendment cannot be applied in a retroactive manner. In addition, the Constitution provides that no one can be deprived of ownership or possession without following a legal process before a competent court in accordance to the current rules of procedure.

Again, to summarize your rights as a foreigner under the Constitution of Mexico:

If You Own Property through a Bank Trust: Property that is located on the border or shoreline in Mexico (technically named “restricted zone”) can only be owned by a foreign individual through a bank beneficiary trust with duration of 50 years with the possibility of extension in accordance with the Foreign Investment Law and its regulations. Therefore, even if such laws are amended or abrogated, the Mexican Constitution gives you the right to maintain your beneficiary trust rights over property owned in this manner.

If You Own Property Directly: Property that is located in the interior of the country can be owned directly by a foreigner. In this case, under the Mexican Constitution, your ownership cannot be restricted in any manner, and you will be able to keep such ownership until you transfer it, sell it, or will it to others.

If You Own Property through a Mexican Corporation: Another way for a foreigner to own property in Mexico is by owning shares in a Mexican corporation, and that Mexican corporation owns the property; whether it is on the border, shoreline or in the interior. In the case of owning shares of a Mexican corporation that owns property, such share ownership cannot be restricted, and you will also keep its ownership until you transfer such shares.

My Advice: Don’t be worried about your property rights and investment. Just make sure you have all papers and titles in place.

For your reference, below please find a transcript of part of Article 14 of the Mexican Political Constitution:

“Article 14. No law shall have a retroactive effect against an individual.

No one may be deprived of his/her freedom, properties, possessions or rights, unless a process before the competent court is carried out, wherein all essentials formalities intrinsic to the procedure are fulfilled and pursuant to the laws issued prior to such fact…”

 About the Author: Agustin Galindo is the director of Galindo Abogados, www.galindoabogados.com in Zihuatanejo. You can contact him at galindoabogados@gmail.com.

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