Legal FAQ's
Below is a list of frequently asked legal questions and notices.
Can non-Mexicans own real estate in Mexico?
Absolutely! Real estate ownership in Mexico is permitted with a bank trust called a Fideicomiso (fee-day-coe-me-so). The trust has a term of 50 years and can be renewed in perpetuity to allow for long-term control of the asset and/or to will the land from generation to generation.
What is a Fidecomiso?
In the 'restricted zone' of Mexico (100 kilometers from the border and 50 kilometers from the coast), a foreigner may purchase real estate only by means of a Fideicomiso (fee-day-coe-me-so), commonly called a Trust. The Fideicomiso is a 50-year, renewable bank trust granting a foreign Buyer the right to use, enjoy, occupy, rent, sell, or otherwise enjoy the property. The Foreign Buyer is called the Beneficiary of the Trust. As the beneficiary, the owner retains all ownership rights and responsibilities to the property and has the right to sell, rent, and/or will the property to heirs. Essentially, the beneficiary of the property enjoys all the rights as if the ownership were fee-simple.
Why is a Fidecomiso (bank trust) necessary?
In 1994, amendments to the Mexican Constitution permitted foreigners to purchase and own real estate in Mexico located within the "restricted zone," which is all land within 60 miles of a national border and within 30 miles of the Mexican Coast, which includes the majority of real estate in Los Cabos. This Law permitted ownership through a property trust or "Fideicomiso" The way the Fideicomiso works is the Mexican Government issues a permit to a Mexican Bank, allowing the bank to act as Trustee of the property and the owner as the Beneficiary of the Trust. The beneficiary rights are very similar to Living Wills or Estate Trusts in the U.S. The bank, as trustee, takes instructions only from the trust's beneficiary (the foreign purchaser). The beneficiary has the right to use, enjoy, occupy, rent, and sell the property. The beneficiary may also sell the rights and instruct the trustee to transfer the title to a qualified owner.
What is the 50 or 100-year lease rumor about?
Pre-1994, it was challenging for foreigners to own land near the ocean in Mexico. At that time, it was common for foreigners to enter into Lease Options, structured as long-term renewable leases with options to purchase should the law permit —back then, it was hopeful that foreign ownership would be possible in the near future. Thus, novices will often think this is still the case, which simply is not true. Other novices refer to the current Fidecomiso or trust arrangement in Mexico as a lease agreement... but this is not true either. Upon closing, your fractional purchase of Flora Farm’s real estate will be processed through a Trust with you named as the beneficiary of the trust - you are not a lessee. Thus, you have all the rights that an owner of property in the U.S. or Canada has, including the right to enjoy the property, sell the property, rent the property, etc..
Can we change our ownership for something more, new, or different after completing the Closing Process?
Yes. Once you have closed, it is still possible to change ownership from one product type to another. Legal fees would be required to perform the change.
Can you describe the Closing Process?
The following description of the Closing Process is subject to change without notice and at any time.
You can close only if a.) You have paid your total Purchase Price and b.) The construction of the home you purchased is 100% completed. When you are ready to close, you will...
Complete the Owner Info for Closing form.
Within several weeks following the completion of the form, Flora’s closing team will email you the following documents for your signature:
The Limited Power of Attorney (allowing our Closing Officer to process your deed on your behalf).
The KYC Fideicomiso document in order to set up your bank trust.
Once you receive the documents above, you will be required to...
Sign and initial each document where required.
Email scans of all pages to closings@flora-farms.com.
The Mexican government is a stickler when it comes to document details. Your signature must match the signatures of your passports (100%), and all paperwork must be completed strictly as required. Once Flora receives your faxes or scans, she will review them to make absolutely sure everything was completed and signed correctly.
Once you have Flora's approval, please visit your local notary and notarize the following:
Copy of your passport (the page and opposite page of your photo).
Copy of your driver’s license (the page and opposite page of your photo).
Power of Attorney.
KYC (Know Your Client) Fideicomiso document.
Once the above documents have been notarized, send all documents to be Apostilled. The papers must be Appostilled and Notarized in the same state. Click here for a list of US State's Apostille Offices. If you live in another country, please contact your state, province or region for information on acquiring an Apostille.
When you receive your Apostilled documents, you will send them to us via FedEx, Priority USPS, or UPS to Flora.
Once we have your documents in hand, we will confirm that we have received them and forward you an estimated total of your closing costs. You will be required to pay 75% of the estimated Closing Costs in order for us to begin the Closing Process.
Once completed, ask Flora for an anticipated timeline for the completion of your Closing Process.
On the date of closing, all parties sign the title, and your deed becomes officially and irrevocably transferred to you.
Immediately following the signing of the title, the Notary must record the newly transferred deed for public record. This process takes approximately 90 days after the Closing.
Once fully recorded in the local tax office and public registry, the Notary will prepare the final statements and submit a copy of the fully registered deed to your Closing Officer, who in turn will forward it to you.
The purchaser is financially responsible for any and all fees and expenses related to the above-mentioned items, including but not limited to the sending, processing, re-sending, and/or re-processing of new and/or additional documents required by the bank or government regarding the Closing Process.
What are the closing costs?
Your closing costs are described within your Purchase Agreement.
When do I receive the deed to my purchase?
Following the Closing, the Notary must record the newly transferred deed for public record. This process takes approximately 90 days after the Closing. Once fully recorded in the local tax office and public registry, the Notary will prepare the final statements and submit a copy of the fully registered deed to your Closing Officer, who in turn will forward it to you.
Do I need to be physically present at the closing?
No. You will sign a Limited Power of Attorney, which will allow Flora’s Closing Officer to process your deed on your behalf.
What is an Apostille (as mentioned in the Closing Process)?
Since October 15, 1981, the United States has been part of the 1961 Hague Convention abolishing the Requirement of Legalization for Foreign Public Documents. The Convention provides for the simplified certification of public (including notarized) documents to be used in countries that have joined the convention (see list of countries here: http://www.hcch.net/index_en.php?act=states.listing). Under the Hague Convention, signatory countries have agreed to recognize public documents issued by other signatory countries if those public documents are authenticated by the attachment of an internationally recognized form of authentication known as an "apostille." The apostille ensures that public documents issued in one signatory country will be recognized as valid in another signatory country. When a document is to be used in a foreign country, it may be necessary to authenticate the notarization or certification. Foreign countries often require documents to be authenticated before the foreign jurisdiction accepts them. An "authentication" certifies the signature and the position of the official who has executed, issued, or certified a copy of a document. The sole function of the apostille is to certify the authenticity of the signature on the document, the capacity in which the person signing the document acted, and the identity of any stamp or seal affixed to the document. The Apostille can be obtained by the Secretary of State of your state, which must be the same state as where you notarize the documents to be apostilled. Click here for a list of US State's Apostille Offices. If you live in another country, please contact your state, province, or region for information on acquiring an Apostille.
What is the KYC (Know Your Client) Fideicomiso document (as mentioned in the Closing Process)?
This document is legally required as a formal disclosure and promise to the bank holding the Fidecomiso that the funds you are paying have been generated from legally documented sources.
Am I required to pay any annual taxes?
The only taxes due annually in Los Cabos are property taxes, or "Impuestos Prediales"” These municipal taxes are included in your Annual Management Fees. See your Purchase Agreement for details.
How can I title my property?
In the names of up to two individuals. A Trust, Corp, or LLC can be listed as the beneficiary of your Mexican fractional real estate deed.
Legal Notices
Flora’s $1,000 Trade Referral Program has been replaced with The Coveted Referral Program. Read more notices here.
The Alliance between Flora Farms and the Beachfront Flats and El Encanto De La Laguna.
Flora Farms has formed an alliance with the Beachfront Flats, allowing for co-owners of each property to enjoy special privileges at the other property. Flora Farms has no ownership or operational interest in the Beachfront Flats or El Encanto De La Laguna, nor do the Beachfront Flats or El Encanto De La Laguna have any ownership or operational interest in Flora Farm. These properties are completely separate entities with an alliance to share experiences among their property owners. Read more notices here.
Attention Co-Owners (of fractional real estate at Flora Farms)
It has been brought to Flora's attention that some of you have private vehicles located in Cabo and/or at Flora Farms which you allow other co-owners to rent. What you do with your vehicles is your business, however, Flora needs to notify you with regards to some important policies regarding these vehicles:
1. None of these vehicles are owned nor operated by Flora Farms. Flora Farms does not provide any rental car services. We are more than happy to refer you to rental car companies.
2. Renting a personally-owned vehicle, privately, is against the law in Baja California Sur. Rental cars must have an official state rental-car license plate. If the authorities learn that a private car has in fact been rented by the person driving it, the vehicle can be immediately impounded. Beware: Even if you rent a car to a person and tell them "if anyone asks, you are only borrowing this car", that doesn't mean they will. If the people you rented your car to are pulled over or involved in an accident, the truth often comes out when the driver is being questioned by authorities.
3. Due to legal, fiscal, and insurance liability reasons, all Flora Farms employees are forbidden and are not permitted to assist with the managing and/or maintenance of any private vehicles owned by any Flora real estate co-owner. There are storage companies located by the airport where some co-owners keep their vehicles parked when they are not in Cabo. Some of those companies have vehicle maintenance services available also.
4. Due to legal, fiscal, and insurance liability reasons, privately owned vehicles are not permitted to be parked on Flora Farms property except for when the vehicle is being used by a co-owner who is staying on site.
5. Flora Farms is absolved from any and all liability related but not limited to any issues, damages, and/or injuries caused by the use of any vehicles referred to in this announcement.
Sincerely,
Legal Department
Flora Investments