Mexico’s National Real Estate Laws

Are you planning on investing in real estate in Mexico? Are you interested in buying or renting beach front properties? Are you interested in purchasing or renting a vacation home or real estate in Tulum, Cancun or Playa del Carmen? If you are interested in doing any real estate transaction in Mexico it is important to consider the laws enacted in Mexico, including various national real estate laws.

Constitution of Mexico

The Constitution of Mexico is the basic governing document of Mexico. The Constitution defines the types of property in Mexico and establishes zones of restricted property. This includes the ejido system and the Federal Maritime Terrestrial Zone (Zona Federal Maritimo Terrestre) (ZoFeMaT) which reserves a strip of public domain land along the coastlines extending twenty meters inland from the high-tide.

Calvo Clause

For a foreigner to obtain permission to purchase property in Mexico from the Secretary of Foreign Affairs, you must sign a Calvo Clause agreement which is usually inserted into the property deeds. The Calvo Clause states that owners of real estate in Mexico agree to be bound by the laws of Mexico and can not seek recourse to law in their home counties.

Civil Code

This body of law governs a wide variety of subjects including:

real and personal property
ownership
possession
easements
usufruct
statute of limitations
contracts
leases
special obligations and their effects
agency
association and companies
professional services
credits
mortgages
public registry of property and commerce

Foreign Investment Act

This statute creates certainty for foreign investment in Mexico by providing a legal framework that establishes rules for channeling international capital to productive activities. The Foreign Investment Act regulates foreign corporations and their investments and also acquisitions of real estate and trusts (fideicomisos). It also reserves specific economic activities exclusively for Mexican nationals and outlines areas reserved for State ownership or control. However, in its 1993 reform of the Act, Mexico is encouraging foreign investment by easing restrictions on foreign ownership of real estate.

The Act requires that all foreign buyers who purchase real estate in Mexico to be registered with the Secretary of Foreign Relations. Further, the act requires that foreigners who purchase properties in restricted zones obtain a permit from the Secretary of Foreign Relations via a trustee bank.

General Law of National Properties

This body of law oversees property belonging to the state.

Notary Law and Federal Law of Public Brokerage

This body of law regulates public brokers who specialize in property and mercantile law, known as Notarios. They are entrusted to fulfill the following roles:

appraisal expert
broker
legal advisor
arbitrator
public recorder of official documents

Condominium Law

It is the home of the condo regimen. This body of law creates regulations and standards for the operation of condominiums.

Public Registry (RPdeC)

This Registry is the public record of property deeds.

Agrarian Law (La Ley Agraria)

This body of law maintains the National Agrarian Registry which oversees the disposition, use, and modification of ejido land. However, once property is totally unincorporated from agrarian control, it is then transferred to the local Public Registry of Property

Mercantile Code

This body of law regulates all commercial activity including:

contracts
agency (although it does not specifically regulate realtors, it touches on the principal/client relationship)
credit institutions
documentary credit
land and water transportation
arbitration
bankruptcy
procedures for commercial litigation

Tax Laws

This body of law regulates the federal income tax, federal sales (value added) tax, federal assets tax, federal social security tax, and other tax areas.

General Law of Negotiable Instrument

This body of law regulates credit instruments which include:

promissory notes
checks
certificates of deposit
certificates of participation

Additionally, it regulates credit operations which include:

loan of securities
discounts
deposits
guaranties
several kinds of credit operations
trust contracts including fideicomisos

Corporation Law

This body of law regulates the formation and operation of business entities that are incorporated.

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