By: Agustin Galindo, Attorney at Law*
Could I Lose My Property in Mexico?
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 government retaliation 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 properties, 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 guarantees 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 with 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 a 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 the 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 on 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 a Mexican Attorney at Law with a master’s degree in International and Comparative Law from Southern Methodist University in Texas, and holds a tax degree from ITAM in Mexico City.
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