Title
insurance is a special type of insurance that protects the
expatriate community in Mexico 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 important
when purchasing real estate in Mexico to understand a
Fidiecomiso (Living Trust)
DOES NOT
take the place of or exclude the need for Title
Insurance. A Fidiecomiso 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, government and Ejido claims,
even certain developer liens. This should not be acceptable.
When purchasing title insurance in Mexico make sure that the
policy is on the land not just the Fideicomiso.
Buying a home anywhere is one of the most important decisions
anyone makes and now that title insurance is available in
Mexico, people can have a lot more confidence in purchasing a
home or a condominium.
What additional benefits does a title policy provide?
Since title
policies are fully negotiable contracts of indemnity, a title
company can consider and insure a variety of title matters for
the benefit of the proposed insured. For example a title
insurance policy has the ability to provide affirmative coverage
and endorsements that protect purchasers against risks that may
be discovered in the title search process. How can any one
individual, even a notario publico, give these types of
assurances that have real dollars standing behind the assurance
and that ultimately will protect a buyer in the event of a loss?
Never forget one
thing, no matter who tells you that title insurance isn't
necessary, just remember that it is the
ONLY monetary indemnification
that you will receive protecting your ownership rights.
Along with title
insurance comes U.S. Escrow. Both Stewart Title and First
American are offering that service even if you don’t have a
title insurance policy yet.
Why risk your deposit when the Escrow
Company will supervise the release of it to the developer?
This is not to be confused with a real estate company escrow
account in the U.S. Your escrow is not covered by the same laws
it would be if the property was in California so the real estate
agent is free to keep any portion of the deposit.
Some of the Baja real estate companies are now offering Title
Insurance as a way of protecting their customers and a few like
Baja Relocation, won’t sell property without Title Insurance. If
your realtor doesn’t, ask for it as part of your offer to the
buyer.
Developers have
also begun to get title insurance on the land before selling and
the buyer can obtain an individual policy at settlement. If you
are considering purchasing a home or condo that does not offer a
title insurance policy on the land but tells you that you can
get one when the development is finished, consider how you will
do that if there are liens or title disputes on the land. And
if your agent is willing to sell you this kind of property, be
aware that the agent will get paid when you make your deposit to
the developer so they have nothing to loose if there are
problems. You can be sure they will not stick around to help
you if they have already been paid. If there is not a clear
title you will also not be able to get a bank trust and for
foreigners it is impossible to own land in this part of Mexico
without a bank trust. Not a Master Trust, but an individual bank
trust.
If all of this seems
confusing , just remember , Title Insurance and Title Company
Escrow are the only safeguards you have in a market where real
estate agents have no licenses. Look for Developments that have
both of these safeguards.
