Published On: Fri, Jan 3rd, 2014

Title Search and Insurance in Mexico

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Many people have said that title insurance is unnecessary in Mexico. This is not correct. Those who acquire title in fee simple – in the interior of the country, rely upon the Notary Public to search title.
TITLE SEARCH AND INSURANCE IN MEXICO
By Linda Neill
Title insurance, so common in many parts of the United States and Canada, is in its infancy in Mexico. While the Public Registry system operates in much the same manner as in other parts of the world, the actual work is still performed manually in many places in Mexico. Deeds are handwritten into large books, a computerized system is still a dream and title plants are non-existent. Maps of subdivisions and properties are often uncommon or incomplete.
Thus, information available to create a chain of title for a specific property requires a visit to the local public registry office in the municipality where the property is located, and may require hours of laborious research and investigation to determine if the property is private property, who the sellers are, and if there are liens or encumbrances on the property.
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Several major United States title insurance companies are doing searches in certain parts of the country and are offering title policies. For those who wish title insurance, it is necessary to provide a general description of the property, the name of the current holder of title, preferably a copy of the deed, and the approximate amount to be insured. With this information, we are able to investigate the existence of any existing title data and confirm whether or not title insurance will be available for the specific property.
Many people have said that title insurance is unnecessary in Mexico. This is not correct. Those who acquire title in fee simple – in the interior of the country, rely upon the Notary Public to search title.
Title search, in this case, consists of requesting and receiving a Certificate of No-Liens on the property, which is issued by the Public Registry Department. This certificate, plus the Seller’s declaration in the deed that the property is being delivered free and clear of liens and encumbrances, are the only assurances that title is valid. Should the Certificate of No-Liens be issued in error or due to oversight, or should the seller misrepresent the property, a civil suit against the seller may be the only legal remedy for resolving problems.
Those who acquire property in the Mexican Bank Trust (fideicomiso) have felt comfortable in relying upon the trustee bank to research title. This is also inappropriate. The standard fideicomiso (bank trust) document will have a disclaimer in which the bank will supply a power of attorney to the legal representative of the beneficiary of the trust in order to settle title matters or problems, but the trustee bank will not be the responsible party if, indeed, title problems arise.
A title insurance policy will guarantee four important matters:
 1. That title to the estate or interest described in the policy is as stated therein;
 2. That there are no defects, liens, or encumbrances (registered easements, etc.) other than those
stated in the policy;
 3. That title is marketable;
 4. That there is right of access to and from the land.
The standard exclusions from coverage in both the U.S. and Mexico are:
1. Laws, ordinances or regulations restricting the usage of land (zoning, construction, environmental protection – contamination)
 2. Rights of eminent domain – unless recorded prior to date of policy
 3. Defects, liens, encumbrances, adverse claims
 a. Created, suffered or agreed to by claimant
 b. Not a matter of public record but known to claimant
 c. Created subsequent to date of policy
 4. Taxes or assessments not shown as existing liens
 5. Facts, rights, interests or claims not shown by the public records but which could be
ascertained by an inspection of the land or by making an inquiry of persons in possession thereof.
 6. Easements, liens or encumbrances, or claims thereof not shown by public records but could
be discovered by a physical inspection thereof,
 7. Discrepancies, conflicts in boundary lines, shortage in area, encroachment or other facts in
which a correct survey would disclose.
Exclusions from coverage (Mexico only)
 1. Water rights or claims or title to water (All water rights are owned by the Mexican government);
 2. All substances and deposits described in article 27 of the Mexican constitution, the dominion of which is reserved to the Mexican government; (i.e.) minerals, petroleum and related hydrocarbons, salt and precious gems;
 3. Confiscation or expropriation by insurrection, rebellion, revolution, civil war, military or usurped
power, through the efforts of a political, revolutionary constituted government of the nation or one of its
sub-entities;
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The powerful reasons for obtaining a policy of title insurance are to insure against error by searchers, fraud and forgery in deeds. If a mortgage or pledge guarantee is involved and the lender is a foreign institution, a policy of title insurance will generally be required in order to make the loan. copyright, April, 2003 Consultores Phoenix, S.C., reproduction prohibited without permission.
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ABOUT THE AUTHOR:
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Linda Neill holds PROFECO Certificate 00065/96 based upon demonstration of her  qualifications and business practices. The Settlement Company handles transfers on properties located throughout Mexico, makes annual property tax and bank payments and provides title search and title insurance on properties on properties in Mexico.
Born in California, Linda is the Founder of The Settlement Company®. She is also licensed as a real estate broker in California and has lived in Mexico for almost forty years. Linda has guided the development of a mortgage company and has extensive experience in escrow, appraisals, liens, foreclosures, contract law and managing the development of tourist projects. She has developed partnerships and joint ventures including several Mexican-American investment companies. Her skills in negotiating contracts and in reaching a meeting of the minds between parties from three distinct cultures has placed her services in demand as a consultant and for speaking engagements on Mexican real estate law and custom in the United States, Mexico and Canada. Holding a post graduate degree in real estate from UNAM ( Mexico’s national university) she has been widely published on the subject of acquiring real property in Mexico. Linda is co-author of the NAR publication, “ Doing Business in Mexico” and has taught that course, both in Mexico and the United States. Memberships include the International Real Estate Federation (FIABCI), Asociacion Mexicana de Profesionales Inmobiliarios (AMPI), and the National Association of Realtors® (NAR). Linda has served two full terms as a National Advisor of AMPI, is a founding member of AMPI-Los Cabos and has served as State Coordinator for Baja California Sur. Languages, Spanish and English

Mexico Travel Care

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