Rocky Point Mexico, Americans own property in the Restricted Zone
Condos in Rocky Point, Puerto Penasco, Mexico -
So you want to buy that special condo or vacation home in Rocky Point, Mexico? Foreigners can own property in Mexico. However, there are some things you, as a potential buyer, in Rocky Point, Puerto Penasco should be aware of when making that purchase in Rocky Point.
What is the Restricted Zone?
The Mexican Constitution of 1917 Article 27 specifically prohibits foreign ownership of property and land in the "Restricted Zone". What is the Restricted Zone? According the Article 27 of the Mexican Constitution the Restricted Zone is defined as property within 50 kilometers of ocean and water ways and 100 kilometers of any international border. Rocky Point is located in the Mexican Restricted Zone. I've included a map that illustrates the restricted zone of the northwest states of Mexico - Baja, Baja Sur, and the State of Sonora which includes Rocky Point, Puerto Penasco.
How Do Foreigners take Title in the Restricted Zone of Mexico?
So, how can visitors and tourists from other counties buy property in these restricted zone areas of Mexico And more importantly, how can Mexico attract badly need investment for development of these strategic centers of tourism while guaranteeing rights. In 1972 the Mexican Legislature came up with a brilliant idea to use a technique well known in the modern banking and investment world. Mexico adapted the idea of using a "Trust" to overcome the restrictions imposed by article 27 of the Mexican Constitution.
The Mexican Bank Trust
The Idea of using a "Trust" to assign rights to individuals is nothing new to the modern banking world. As it relates to the purchase of Mexican Property in the restriction zone, the use of the Bank Trust is quite common. A Mexican Approved Bank is appointed at the Trustee that manages the Trust for the benefit for the beneficiary - purchaser - as detailed in the trust document. The Bank is also appointed the legal owner of the property under the Mexican constitution. Essentially the "Mexican Bank Trust" authorizes the transfer of rights for the use, sale, generate income, purchase and to modify the property to a beneficiary. The Bank, a Mexican Corporation, has legal authority to hold title to the property and transfers the rights of that property to the beneficiary of the trust.
The Bank Trust is a publicly register document with the local public registry. The Public Registry is similar to the county recorders office in the state of Arizona. The recording of the trust document in the public registry legalizes and gives public notice to the assignment of rights to beneficiary - the buyer - and indicates that the Trustor - seller -has transferred the rights of the real property.
There are three parts to a trust:
The Trustee - Mexican Bank
The Trustor - the Seller
The Beneficiary - the Buyer
To be considered official, the Trust Document must be officially notarized in front of a government approved Notario - a Mexican attorney given responsibility by the Mexican government to approve legal public documents. These documents (Trust or any other documents that need to be record) are then recorded in the Local Pubic registry.
Kyle Wood - Realty Executives Rocky Point