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What is
JURIMEX INTERNATIONAL ?
ISRAEL MEZA BAUTISTA Specializes in the areas of Real Estate and Corporate Law and Due diligence.
Me CLAUDE BOISVERT LL.L., D.D.N.
Me AUDREY GAGNON
LL.B D.D.N.
Me LISIANNE MINIER
LL.B D.D.N.
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The search for new horizons, opportunities and challenges are always important for the "Claude Boisvert Studio", being that our motto is: "Always in Progress". Today, we begin a new and ambitious project: The creation of an International and Trilingual Transaction Web Site, the First in its Type, which brings together a Team of Attorneys, Notaries and Affiliated Professional Consultants of various areas, with offices in Canada, México, Unites States of America (these countries form part of the North American Free Trade Agreement) and France, which together offer, thru previously executed Protocols and Agreements of Collaboration and The Rendering of Professional Services, Consulting Services, Negotiation and Execution of Affairs and Legal Negotiations, Real Estate, Fiscal, Corporate, Certified Legal Translations, Promoting of Investments, Notary Services, as well as other services which are included and whose vision and specialization are focused unto Individuals, Institutions and Investors of a foreign origin, that desire to carry out procedures and negotiations of any type whatsoever in Mexico, Canada, United States of America or France, as such JURIMEX INTERNATIONAL was created, which from this day on, is the name of the Global Project and this Web Site, built with the highest standards of Technology, Software and Security (128 Bits), comparable to the level of security that is offered by the Canadian Banks in their transactions.
BY NON-MEXICAN NATIONALS (FOREIGNERS) PUERTO VALLARTA AND BAHIA DE BANDERAS Puerto Vallarta, situated on the beautiful Bahia de Banderas Bay which covers the coastlines of two states (Jalisco and Nayarit), is a picturesque Mexican Tourism Destination that due to its characteristics of a quaint and small "Old Mexican Town", captivating beaches and sunsets, has become a very popular investment zone for those Foreign Investors who which to start up new business or expand their already successful enterprises. One of the main markets in which many Foreigners have decided to invest their money in Puerto Vallarta and other Mexican towns or cities, is the Real Estate Sector. Foreigners who wish to make wise and sound investments in said market may want to take into consideration the following tips, which are stated herein, when making their final decision. The Mexican Constitution prohibits Non-Mexican Nationals (Foreigners) from acquiring real rights over real estate property which is situated within a part of the Mexican territory labeled "The Prohibited Zone", the latter is in accordance with Article 27 of aforementioned Law, articles 1 and 8 of the Rules and Regulations of the Foreign Investment Law, as well as article 34 of the Nationality and Naturalization Law. Even though Mexican Law has established the previously mentioned prohibitions, for a number of years and even today, Non-Mexican Nationals have used various methods in order to evade the Law, some of which include the institutions of "Prestanombres", Memberships, Clubs, Partnerships, etc… Thru the "Prestanombres" institution, The Non-Mexican National acquires possession of a desired real estate property, a Deed is drawn up in the name of a Mexican National, personally known to the Non-Mexican National and in whom he bestows his Trust, and the Non-Mexican National’s investment is left in the hands of the "Prestanombre". In this manner the Non-Mexican National has no legal security on paper whatsoever over said land, and his only recourse is to TRUST in the good faith and will of his chosen "Prestanombre". As such Mexican Law foresees the legal figure of the BANK TRUST, as the only legal and secure means by which a Non-Mexican National may acquire any right whatsoever over real estate property located on the Mexican Coasts and Borders, and the Non-Mexican National can in this manner avoid the risks of using a "Prestanombre" and being part of a real estate fraud. Foreigners (Non-Mexican Nationals) who wish to purchase Real Estate Properties in the Municipalities of Puerto Vallarta (State of Jalisco) and Bahia de Banderas (State of Nayarit) need to pay special attention to the said facts, being that all of the Real Estate Properties that form part of the Municipalities of reference lie within "THE PROHIBITED ZONE". These two municipalities are very highly attractive investment zones for Foreign Investors, being that the real estate market has a high market value due to the fact that Luxurious Tourism Developments that meet high International Standards have sprung up in this zone. A.- DEFINITION OF "THE PROHIBITED ZONE": Under Mexican Law "The Prohibited Zone" is a strip of land that covers 50 kms. inland from the Mexican Coastlines and 100 kms. inland from the Mexican Borders; and within these zones, we find the application of the Prohibition foreseen by the Mexican Constitution, which prohibits Non-Mexican Nationals from acquiring direct ownership over real estate property whatsoever within the same. B.- THE PARTIES OF THE TRUST: The parties of a Trust Agreement are as follows: 1.- SETTLOR: Is the individual who is the titleholder of the goods, assets or rights that he transfers to the Fiduciary, for the fulfillment of an objective that is licit and he must have the legal capacity to bind himself and to make use of the goods. 2.- FIDUCIARY: Credit Institutions (Banks) that have a concession from the Hacienda and Public Credit Secretariat, to operate as such as well as to carry out the duties of a FIDUCIARY. 3.- BENEFICIARY(IES): Is the individual(s) that receives the benefits of the TRUST or anything that remains once the objective of the same has been fulfilled. For example in the event of a BANK TRUST that is set up with the purpose of allowing a Non-Mexican National(s) to have rights over real estate property situated within "THE PROHIBITED ZONE", the Beneficiary of the Trust would be the Non-Mexican National, with him/them having the right, as well, and in the same act, to name a Substitute Beneficiary in the Event of Death. C. THE MANNER IN WHICH A TRUST IS CREATED: The Trust must be executed in written and the real estate property, which has been chosen by the Non-Mexican National, is transferred to the FIDUCIARY (Mexican Bank) in order to fulfill the purpose of the Trust (allow the Non-Mexican National to have rights of use and enjoyment over the same). All Trusts which are set up over a Real Estate Property under Mexican Law must be granted thru a PUBLIC DEED (TRUST DEED OR DEED OF TRUST) issued by a Mexican Public Notary, said deed must then be recorded in the Real Estate Property Registry so that the transaction can be made known to all Third Parties, as well as for the purpose of recording future liens and encumbrances unto the same. It is important to note that once a BANK TRUST is set up by a Non-Mexican National, the FIDUCIARY (MEXICAN BANK) becomes the legal owner but it can not take or make any decisions over said property if it is not by a previously written authorized letter of instructions issued, under the witness of a Public Notary, by the Non-Mexican National who is the Beneficiary of the Trust set up over the Real Estate Property of reference. The FIDUCIARY (Mexican Bank) is liable, under Mexican Law, for the administration of the TRUST.
The land that makes up the Mexican Territory is classified by article 27 of the Mexican Constitution, and the two major, and most important, classifications are those of "PRIVATELY OWNED LAND" and "EJIDO LAND". One of the main causes of the Mexican Revolution of 1917 (Civil War) was the fact that a majority of the land within the Mexican Republic was concentrated in the hands of a few wealthy families ("Caciques") who owned huge tracts of land. These wealthy families cultivated, or exploited, their lands by the use of peasant Indians , who were used as slave labor. As a direct result of the Mexican Revolution of 1917, the uprising of the peasant Indians against the "Caciques", the Mexican "Ejidos" were created. A group of at least 20 peasant farmers were required to unify their interests so that the government could recognize them as a New Ejido. One of the most important requirements that was asked of these peasant farmers was that they had to dedicate themselves to the activity of agriculture as their primary means of earning a living. Once the 20 peasant farmers were united and they were recognized by the government as a New Ejido, an extension of land that covered a 7 km. Radius was selected and the land was surveyed. Why was the land surveyed? In accordance with the New Mexican Constitution (1917), "PRIVAVETLY OWNED LAND" could not exceed the following surface areas: 1.- 100 hectareas – Of land with an irrigation system. 2.- 200 hectareas – Of land irrigated only in the rainy season. 3.- 300 hectareas – Of land for cattle grazing. 4.- 800 hectareas – Of land in the Hills or Mountains. Once the aforementioned survey was carried out, and it was determined that a sole individual owned as private property an extension of land that surpassed the surface areas listed above, the excess land was expropriated by the Mexican Government and it was transferred to the newly created Ejido who in turn divided the land between its members. In order to protect the Ejido Members and their newly acquired lands, being that the Ejido Members were poor and uneducated and could easily be taken advantage of by the rich and higher classes, the Mexican Legislator invested the Ejido Land with certain peculiar characteristics, such as: I.- "INALIENABLE": That which can not be bought or sold, or given away. II.- "INPRESCRIPTIBLE": A third party could not take over possession of the Ejido Lands and claim ownership derived from the possession for a certain amount of years. III.- "UNTRANSFERABLE": That which may not go from one person or place to another. IV.- "UNGARNISHABLE": That which can not be Garnished. In essence when we talk about "Ejido Land" we make reference to the fact that the Members of The Ejidos only receive RIGHTS OF USE AND ENJOYMENT over their lands, as opposed to RIGHTS OF OWNERSHIP when we speak of PRIVATE PROPERTY, or privately owned land. In other words to say that two parties executed a Purchase-Sale Agreement over Ejido Land is incorrect and said act is null and void, being that the only way to transfer rights over said lands would be thru an Assignment of Rights. In the "Ejido Regimen", in order for an Assignment of Rights to be a legal and valid Act the Agrarian Law makes reference to certain procedures or steps that need to be followed. First the Assignments of Rights must be approved by The Ejido Members Assembly and, Second the Assignment of Rights document must be signed by the Members of the Board of Directors of the Ejido of reference. The Agrarian Law specifically makes reference to the fact that in order for an Individual to be an Ejido Member or landholder of Ejido Land, he/she must be a Mexican National. As such any act executed by an Non Mexican National (Foreigner), be it a Purchase-Sale Agreement or an Assignment of Rights Agreement, is Null and Void. On the beautiful coastlines of the States of Jalisco and Nayarit (Puerto Vallarta up to San Blas), we find that around 80% of the land that composes their territory is Ejido Land. We can find pieces of land that offer great ocean and sunset views, which are very attractive to Non Mexican Nationals who would like to acquire pieces of land with said characteristics in order to enjoy their vacations, semi-retirement or retirement. MAY A NON MEXICAN NATIONAL EVER BE IN A POSITION TO HAVE RIGHTS OF USE AND ENJOYMENT OVER EJIDO LANDS ? The answer is Yes. In the year 1992 the Mexican Government, amended the Federal Agrarian Law. In said year the government put into effect a mechanism known as "PROCEDE" which has as its main objective the turning over of Ejido Land into Private Property. Ejido Land can not be put into a BANK TRUST and Private Property may be put into a BANK TRUST!!! So being that article 27 of the Mexican Constitution states that Non Mexican Nationals may ONLY acquire rights of USE AND ENJOYMENT over real estate property that lies within "THE PROHIBITED ZONE" (50 kms. inland from the coastlines) by way of a BANK TRUST, then Ejido Land may be acquired by Non Mexican Nationals, but only after the EJIDO MEMBERS have authorized that THE PROCEDE MECHANISM be put into effect in their EJIDO. Mexican Law foresees certain steps that need to be followed in order for the PROCEDE PROGRAM to be valid. When purchasing real estate property it is important for the purchaser to hire or contract, an Attorney for example, someone who has the knowledge required to carry out a proper TITLE SEARCH over the property that he/she wishes to purchase. The Attorney should then advise the would be purchaser(s) over the legal status of said property and whether or not is advisable to purchase the same and if any precautions need to be taken into consideration. Author:Lic. Miguel Macedo Montes. Jurimex International Associate. |
