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Real Estate in Mazatlan |
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By Carol Sinclair de Ibarra from Walfre
Real Estate
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Escrow and Title Insurance
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| In Mexico, transferring the title of a property from the seller to the buyer is the responsibility of the Notary Public who is a lawyer with special training in this field. |
| It is his job to insure that the property is transferred to the buyer free of liens, burdens and encumbrances and current in municipal, state and federal taxes. He must also certify that the sellers are the legitimate owners (or beneficiaries, in the case of a trust) of the property. So in effect, the Notary Public acts as an Escrow Company with one major difference. The Notary Public does not handle the transfer of the funds from the seller to the buyer. He may witness the transfer but will not hold and disperse these amounts. The only amounts that a Notary will accept are for the closing costs such as taxes, legal fees, capital gains tax etc. which will paid on behalf of the buyer or seller. |
| In the US, escrow companies serve the same purpose as the Notary Public in Mexico but in addition they will make themselves responsible for handling and dispersing all the funds involved in a sale. In Mexico, it is customary for the buyer to give the earnest money directly to the seller or to a trusted third party. The Mexican banks will escrow the funds but this can cost more than the parties will agree to pay and if payment in US dollars is required this can become an issue. Therefore, a buyer should always be very cautious to whom and under what conditions the earnest money is paid. |
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| In Mexico, there are a number of US companies offering Title Insurance. From all the information I have been able to obtain, the companies are offering the service of reviewing the work of the Mexican Notary Public to make sure that the transfer of the property is completed free and clear according to Mexican law. I have requested additional information from some of these companies to clarify exactly what the term “insurance” means in this case and I will write a follow-up article in March. I would appreciate feedback and information on this topic that we can all share in future articles. My e-mail is: sincrose@msn.com |
