The laws of property ownership in Mexico have changed, allowing non-Mexican citizens to have property rights similar to those in the U.S. and Canada. These rights are executed through a real estate trust in which the title is held. Since foreigners are not able to enter directly into contracts to buy coastal real estate, they must have a bank act on their behalf, much as a trust is used to hold property for minors because they also cannot contract.

Real Estate Trust
The Mexican Constitution prohibits direct ownership of real estate by foreigners in what has come to be known as the "restricted zone." The restricted zone encompasses all land located within 100 kilometers (about 62 miles) of any Mexican border, and within 50 kilometers (about 31 miles) of any Mexican coastline. However, in order to permit foreign investment in these areas, the Mexican government created the fideicomiso, which is, roughly translated, a real estate trust.

A fideicomiso is a trust agreement created for the benefit of a foreign buyer, executed between a Mexican bank and the seller of property. The bank acts on behalf of the foreign buyer, holding title to real property. The bank, as trustee, buys the property for the buyer, then has a fiduciary obligation to follow instructions given by the buyer who is the trust beneficiary. The trust beneficiary retains and enjoys all the rights of ownership while the bank holds title to the property. The buyer is entitled to use, enjoy and even sell the property held in trust, at its market value, to any eligible purchaser. The trust lasts 50 years and is perpetually renewable.

Title Insurance
Loreto Bay has a preferred relationship with Stewart Title Guaranty, which offers U.S title insurance to secure your purchase. Title insurance assures the marketability of your title and gives you no-fault recourse in the unlikely event of a problem. The carrier shoulders the potential risks and indemnifies against losses or damages arising from title defects.

Stewart Title is one of the most experienced providers of title insurance and one of the largest title guaranty companies in the world. With more than 100 years of service to the real estate industry, Stewart Title has over 3,500 offices in the U.S. and worldwide. The company offers a wide variety of title insurance and associated closing and escrow services. Stewart Title has a division that specializes in Mexican real estate transactions.

Resources
The resources below will provide a wealth of information on ownership in Mexico. However, please be aware these additional web resources on Mexican land ownership are general in scope and should neither be considered an endorsement of the information nor legal advice. Please see your attorney for legal recommendations.

Stewart Title
Buying Property in Mexico - here you'll find approximately a dozen white papers to provide background information on purchasing land in Mexico.
Buying Real Estate in Mexico
Mexico Offers an Investment Alternative

The Embassy and U.S. Consulates of Mexico
Acquisition of Real Estate in Mexico
Resort Title Insurance in Mexico: The Legacy of Punta Banda - in this article, David A. Lamb of the law firm Milbank, Tweed, Hadley & McCloy explains why Americans should no longer shy away for buying homes in resort areas of Mexico because of concerns about property rights.

Lectric Law Library
Real Estate Transactions in Mexico - excerpted from "How to buy real estate in Mexico" by Dennis Peyton
Mexico-Bienes Raices: Buying Into God's Little Hectare - article by Jennifer J. Rose, an attorney in private practice

Other Helpful Resources
Owning Property in Mexico
Can Foreigners Really Own Property in Mexico?
Richard Kaplan Real Estate & Development