Your Mexican Dream Home
 Alan Caplan - EdmontonSun.com
Bucerias, Mexico - It's 22 degrees and this is the coolest part of the day. For many people, the good life begins each day with a coffee in the sun. I still hear rumours that a foreigner can't buy property in Mexico without great difficulty. However, once you have the rules in place and understand some cultural and legal differences, it's not so hard.
Mexico's Napoleonic civil law code is similar to France's and relies on the law as written, with little or no weight given to prior decisions. British law, used in Canada and the U.S., starts with the written law and evolves via interpretations as cases are adjudicated.
Land registry systems here are a bit antiquated, although improving daily. Mexican officialdom is stamping-happy, while paperwork anomalies are processed strictly without interpretation.
It harks back almost a century.
In 1917, Mexico underwent a civil revolution under the leadership of Victor Carranza that resulted in a new constitution with a bias toward the welfare of ordinary Mexicans.
Among other things, the constitution gave land to each and every Mexican village for their use only as communal or "ejido" land, with the provision that it could never be sold to the highest bidder, and more specifically, to anyone other than a Mexican national. Local ejido councils were set up to administer the process and distribute parcels, mostly for farming.
At the time, the country was agriculture based, quite poor with largely illiterate citizenry. Only minimal land records were kept with those in large part, only verbally. Often, only ejido councils knew the details. And, as happened in every developing nation at the time, much council power was abused.
"...an amendment to the Constitution called the Foreign Investment Law, allowed foreigners to purchase land.."
Ejidos had the power to give land to individuals for personal use and to take it back. Presidency of the councils was often handed down from father to son, effectively creating an exclusive authority class.
The restriction from foreigners was a visceral reaction to centuries of domination by the Spanish, French and finally, the Americans who had controlled the land and waterways, before the revolution, often to the detriment of the Mexican people.
But, half a century later, Mexico matured and as an emerging nation, needed to allow some foreign investment. So, an amendment to the constitution called the Foreign Investment Law, allowed foreigners to purchase land except in what was called the "restricted zone" that included property within 50 km of the high-tide mark in coastal areas and 100 km from any border.
That didn't resolve the problem. Most foreigners wanted to occupy land in coastal areas (think beaches) and near borders for easier access. But it still took another 21 years and the NAFTA agreement to change the rules.
In 1994, in conjunction with NAFTA and the World Bank, the U.S. gave Mexico a multi-billion-dollar loan, contingent on reforming the land use system and creating a more formal, written land registry. Mexico responded by making a further amendment to the constitution that effectively got around the restricted use by foreigners provision.
Non-Mexicans now could own property in a restricted zone by creating a bank trust with a Mexican bank, known as a fideicomiso, to hold the property as trustee for the foreign beneficiary. And the land rush began in earnest.
Email Alan Caplan at acaplanatcba@hotmail.com. |
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