INDUSTRIAL INVESTMENT IN RIVIERA MAYA

In addition to the growth in tourist and residential infrastructure, Riviera Maya’s industrial sector is also on the rise. One of the most outstanding projects in this dynamic region is Pangea, the highly-expected Logistics Center of the Southeast, still under construction.

This building will stand 20 kilometers from the International Airport of Cancun and five kilometers from the pier of Puerto Morelos, in the location that used to hold the Industrial Park of Puerto Morelos, on a total area of 84 acres (34 hectares) intended to house 160 national and foreign companies.

This development will group together local, national and international free trade agreements aimed at supplying the hotel chains of Quintana Roo with products such as sheets, furniture, construction equipment, meat products, food and beverages, among others.

Requiring a Group E private investment of 500 million dollars, 250 of which will be invested in the construction of the building, this will be a two-stages project. The first will consist on a focal point for the supply of local, regional and national products aimed at the industry, mainly hotel, in the northern area of ​​Quintana Roo. It will have warehousing units, a cold-storage network or refrigeration area to store a high variety of perishable products, a hotel with no less than 250 rooms, an assembly department, banks zone, offices, business lounges, restaurants and convenience stores. The second stage is much more ambitious: It will bring together a marine supply and export center that will take advantage of and expand the current pier of Puerto Morelos for ships that are small and easy to maneuver.

The idea of ​​launching this project dates back to 2016, arising from the invitation extended to hospitality businesses by the Secretary of Tourism, Enrique de la Madrid, for them to replace their imports with domestic production, this way fostering economic diversification by taking advantage of this strategic geographical location and of the national and international airport connectivity. We must not forget that the state of Quintana Roo is Mexico’s access to the Caribbean Sea and the connection platform to a large part of the world through one of the largest airport centers in this area of ​​Mexican territory. Undoubtedly, this opportunity opens the door for the development of new economies and investment, not only in tourism, but also in logistics and commerce.

 

PRE-CONTRACT: THE PRIMARY CONTRACT OR THE PROMISE TO CONTRACT

In the real estate market, it is common to hold pre-contracts, also called primary contracts or promises to contract. This is due to various circumstances, among them: the flow of capital, the temporality of the stay of the parties, or remodeling and adjustments agreements to the property so that it is in optimal conditions and out of any fault in its delivery, first instance at least.

It is very important to determine the nature and effect of these contracts, as many people believe that by entering into a “promise of sale”, “a promise of assignment of rights” or a “promise of trust”, they acquire the rights owned by the “buyer”, “transferee” or “the” trustee “; being that, in the event that the contract was bilateral, the obligations and rights acquired by both parties for the celebration thereof are future but well-determined.

It should be noted that both parties must be willing, the subject matter of the future contract must be lawful and possible, and the price must be certain and determinable. It must be borne in mind that the natural consequence of signing the pre-contract is entering into the promised contract and not the sale, trust or assignment of rights in and of itself.

All investors, whether national or foreign, must be aware of their actual contractual position; that is, the improvement of the main contract should not be confused with the will of the parties to hold a specifically nominated contract in a certain and determined future, even when the pre-contract contains the elements of the main contract.

In the particular case of promises of assignments of rights, it must be specified that only what one actually possesses can be assigned. In that sense, we must refer to a real right or to a contractual position. A real right is that which weighs on a specific property and the ownership that is held over it, while the contractual position may refer to rights to be acquired over it. This is where the kind of contract entered into between the parties becomes relevant.

The above being said, the legal certainty generated by the signing of pre-contracts is not aimed at real rights, as it is rather limited to the certainty of signing a specific contract in a certain and determined future. It is of utmost relevance to clarify this to the investor, since, as law professionals, lawyers and notaries, or commercial intermediaries and brokers, must be obliged to legal certainty and law compliance, as well as to correct advice and information. Thus, the invitation to keep investment within the State is reinforced, thus avoiding capital outflow.

We must be inclusive and generate certainty with information, investment with legal security, movement in the real estate market with the correct advice; let’s take investment by the hand, so that the closing process is always safe, through the correct channels and with the greater information and security that the law generates.

Adquisición de propiedades en México

Por IVAN CATILLO – SECURE TITLE

Como inversionista extranjero, la compra de bienes raíces en México se ha vuelto un proceso muy seguro, eficiente y transparente en los últimos 20 años. La inversión extranjera en México se ha incrementado de forma dramática y acelerada, debido a las grandes oportunidades de crecimiento en los mercados ubicados en el Caribe Mexicano, particularmente en la Riviera Maya.

 

En relación con la inversión extranjera, las leyes mexicanas tienen mayor flexibilidad y otorgan seguridad respecto a la adquisición de bienes raíces por parte de compradores internacionales. Sin embargo, las leyes y regulaciones en general son muy distintas a las de otros países, tales como las de los Estados Unidos de Norteamérica. Compradores que están en proceso de buscar propiedades, deben familiarizarse con los requerimientos necesarios en territorio nacional. Por lo tanto, es altamente recomendable que de forma anticipada a la compra se pongan en contacto con personas que puedan brindarles una asesoría integral respecto a temas inmobiliarios.

 

A continuación, enumeramos algunos puntos importantes a considerar cuando se deseen adquirir propiedades como inversionista extranjero:

 

  • De forma anticipada, agrupa un equipo local de asesores o expertos en temas inmobiliarios, tales como: un agente inmobiliario y una firma de abogados como Secure Title Riviera Maya, que proveerá un abogado en temas de esta índole.

 

  • Solicitar del posible vendedor, copia de la escritura donde acredita que es propietario.

 

  • Realizar una auditoría legal para verificar el estado legal que guarda la propiedad.

 

  • Abrir una cuenta de Escrow.

 

  • Solicitar a la firma de abogados redactar los borradores iniciales de documentos vitales, como: ofertas de compra, contrato de promesa de compraventa, contrato de Escrow, entre otros; documentos que serían redactados en versiones en inglés y español. Esto ayuda para que las partes puedan comprender los términos y condiciones de la transacción en referencia.

 

México es un país bello y amigable, un excelente lugar para disfrutar la vida. Como inversionista extranjero, dejarse seducir por lo que este país tiene que ofrecer es una sabia decisión, por lo que la seguridad jurídica al momento de adquirir es de vital importancia. No pongas en riesgo tu pedazo de paraíso y tu nueva propiedad. Siempre considera proteger tu inversión patrimonial.

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Due Dilligence

Por: Iván Castillo | Director General de Secure Title Riviera Maya Notaría 39

I

n a real estate purchase procedure, it is very important to conduct due diligence on the property to be acquired, since there are several factors that can influence the decision of proceeding with the purchase.

This due diligence can cover multiple areas, such as corporate revisions, environmental factors, tax issues, among others. This will allow for a better understanding of each and every one of the variables regarding the state of the property.

When it comes to residential raw land in tourist areas, especially those bordering the Federal Maritime Zone, it is of utmost relevance to carry out a study of environmental feasibility. The property might be free of liens, without encumbrances and ready to be transferred to the buyer; and still, none of this guarantees that you can build on the raw land.

The environmental feasibility study will analyze all the applicable variables and conditions in terms of planning, use of land, and the environment. The purpose is to determine how feasible it is to build on such land lot, and will also ensure to receive advise on i) the allowed architectural design guidelines that comply with environmental regulations, ii) the development of Environmental Impact studies, iii) changes in use of land, iv) presenting studies before the Ministry of Environmental and Natural Resources to obtain the corresponding permits, authorizations, among other subjects.

To conclude, before signing any binding agreement, you will want to carry out a due diligence to gather detailed information on every risk and/or benefit of the property to be purchased.

Secure Title Riviera Maya’s legal team can advise owners and/or possible buyers, analyzing the legal status of any property, with the aim of providing timely information that is relevant to its marketing or purchase.

FOR FURTHER INFORMATION

Secure Title Riviera Maya

Iván Castillo  ǀ  icastillo@stla.net

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The public registry of property and its impact on real estate transactions

Por: M.D.C. Alejandro Emilio Rabishkin Castillo | Director Jurídico Notaría 39

T

he Public Registry of Property came to be out of the necessity of providing certainty to those individuals willing to know the current state and the chain of title that a property has gone through, as well as any limitation on it. It is only through the aforementioned institution that interested third parties can execute transactions in relation to properties owned by someone else, have access to their information, know who is legally entitled to said properties, and if there are any limitations to them. This PUBLICITY allows for any act carried out to impact on third parties, under the assumption that the recorded act has also been duly notified, so that anyone who deems himself entitled to greater power over the property can manifest in this regard.

Furthermore, the record thus generates functions as a double protection. On the one hand, it prevents anyone lacking legitimate rights from limiting the use or enjoyment of the property, as in that case an infringement would be incurred in against the legitimate owner of the property. On the other hand, it also protects whoever intends to carry out any real estate transaction, by providing information on the status of the property and identifying the legitimate holder of the right that is sought after, helping prevent any issues related to identity theft.

Apart from its role in publicity matters, the effect of the Public Registry of Property in Quintana Roo is to constitute rights, as appointed in the Civil Code of the State: its articles 3159 and 3160 establish that the registry will be constitutive in relation to the agreements and contracts under which the real estate or mortgage title is acquired, transferred, modified or ceased. Said articles also establish that such contracts and agreements are perfected and have full effect only upon registration, unlike in other states of the country, wherein the effect of such registration is of a declarative nature, that is, it only grants publicity to the act. Therefore, it is the source of legal certainty in real estate transactions.

Besides the Public Registry of Property, there are other institutions that contribute to legal certainty in real estate transactions, including the National Notarial Registry, the Public Registry of Commerce, the Cadaster, public notaries, the verification systems of the National Electoral Institute, money laundering prevention policies, etc. It is important that all real estate purchasers request the notary public of their choice to carry out due diligence in order to strengthen the legal certainty of investors throughout the entire purchasing process, from signing to registration in the Public Registry of Property, submitting in due time and proper form the first preventive notice, processing the certificate of lien or no lien, as the case may be, and submitting the final notice once the notarial instrument is signed.

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Editorial Letter

W

elcome to the first number of LivingTerra, a publication with the mission of establishing itself as a reliable source of information for investors, both national and foreign, interested in the Mexican Caribbean real estate market.

Undeniably, Quintana Roo has gained solid ground as the main destination for tourists in Mexico, mostly concentrating in Cancun and Riviera Maya, a trend that is expected to continue throughout coming years. This has naturally brought about a significant growth in real estate demand and supply for the area. A very interesting array of options for investment is attracting big corporations seeking to develop hotel and tourist complexes, as well as individuals and families who dream of acquiring property by the sea, either for living, holidays, or rental. What is certain is that this destination has become one the most captivating markets for investment, as it has something to offer for every style, need and budget.

With all of this in mind, our main goal with LivingTerra is to provide an insightful read on the rhythm of the real estate market in the Mexican Caribbean; and so we have brought together the very valuable contributions of various experts in the different areas pertaining real estate, whose rich and specialized knowledge in this destination and its possibilities for urban development will skillfully illustrate the landscape for the benefit of investors, so that they can make well-informed decisions and obtain higher returns.

Without further ado, we welcome you to this number of our magazine, in the hope that in its pages and through the words of our guest experts you will find accurate and timely information, for you to discover that valuable investment you’re after.

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What is the process for buying a home with cash in México?

T

he benefits of purchasing a home with cash are many, from the lack of interest payments to the ease of transfer. By avoiding the interest on a standard mortgage you can substantially reduce the overall cost of the house. The process of buying a home with cash is essentially the same as buying a home with a mortgage, minus the need to apply and be approved for a loan.

However, since you will be buying in a foreign jurisdiction, there are pitfalls and risks that you need to be aware of. This article will provide some advice on the process of purchasing a property with cash and a short checklist of “do’s and don’ts” in the closing process:

Make an offer

When you find the house you want, inform the owner that you will be making a cash purchase. Cash is preferred by many sellers, since the deal does not depend on a third-party loan that may or may not come through. A cash buyer is a serious buyer, and one who can follow through. Some buyers use this position of strength to work the price of the home a bit lower: sellers often prefer what they perceive as “a sure thing” at a slightly lower price than a deal that requires the buyer to obtain financing, even if that buyer offers the asking price.

Do

Hire a closing/title firm (such as Secure Title) to assist you with the detailed process that is about to begin.

Review terms of earnest money contract to ensure you understand and agree with the terms.

Deposit earnest money ONLY with a known, reliable escrow firm.

Don´t

Sign documents unless you are prepared to move forward with the purchase.

Sign documents without sound legal advice.

Deposit funds with real estate agents, attorneys representing the selling party or directly to the selling party.

Make a deal

Once you arrive at a price, it is time to inspect the property. Licensed, professional inspection services can do the job and leave little doubt about the exact state of the home and property around it. Once the inspectors have given the house their blessing, you can proceed with a fair amount of confidence that nothing is seriously wrong with the house. If the inspector discovers serious problems, you can still walk away from the deal, provided your approval of the inspection was a contingency of the contract you signed. If the inspector discovers minor problems but you still want the house, you can renegotiate the deal with the seller, either for repairs or for a lower price.

Do

Ask lots of questions to ensure you understand the process that is taking place.

Ensure your title is clear and free of liens, foreclosure, overdue taxes or other attachments that can affect your ownership.

Request title insurance, if available.

Request title report in your preferred language to review with your closing attorney or title company representative.

 

Closing

When the inspection and all the other key homework —such as the title search— has been completed, all that’s left is the closing. When buying with cash, you have more flexibility in terms of closing, because you do not need to wait for a lender to schedule the date. You will have set a tentative closing date with the seller at the time you struck the deal, however. At closing, you or your assigned representative will need to sign documents at the Notary Public’s office and your purchase funds will be distributed to the selling party and other parties’ due funds from the transaction.

 

For more details and additional information

Secure Title Riviera México

Iván Castillo

Director General

icastillo@stla.net