HOW SAFE IS YOUR FIDIECOMISSIO?????????

You have bought your property in Mexico and now have this large file of paper documents that says you have ownership, what do you really have?

The three most common methods to own property in Mexico are the Fidiecomissio (bank trust), the Escritura (Deed) and a legally formed Mexican corporation or LLC.  Mexican laws specify that buyers who do not have Mexican citizenship and purchase property within approximately 30 miles of ocean beaches or the borders with a foreign country are required to have what is known as a Fidiecomissio or bank trust.  

Only Mexican nationals or those Mexicans with dual citizenship can own property with an Escritura (Deed).  The ownership of property using a Mexican corporation or LLC is a discussion of its own and will be addressed in another writing.  This writing will focus on the Fidiecomissio or bank trust as it is the most common method for non-national property ownership.  The abbreviation of Fidi will be used going forward as I have so much difficulty spelling and pronouncing the word Fidiecomissio!!!!

As for this author’s credibility, my development in San Felipe, Playa De Oro, has delivered over 140 Fidi’s to the new owners of Playa de Oro and has watched and been asked to assist with the details of sales, death certificates, divorces, family disputes, contractor disputes, dissolution of partnerships, and just about all situations that can occur with property ownership.

A Fidi can only be issued on property that is legally subdivided and properly registered with the government.  The process begins with your purchase documents being presented to a Notario Publico.  The Notario is a specially trained attorney who has been designated by the Mexican Government to be the only person legally able to transfer ownership of property.  There is a limited number of Notario’s in each major city in Mexico.  Mexicali has only 15 Notario’s.   

So what is a Fidi???  It is a Bank Trust legally created by the Mexican Government through a numbered Government issued Trust Certificate and managed  only by certain Government approved banks.  The trust is not an asset of the managing bank and if the bank fails or is sold the entire trust department is transferred to another bank with no loss to the trustee (you).  A very secure system.  

Now for the mechanics of how the trust works and protects you.  I like to think of the trust as a basketball or soccer ball and you as the person who controls the ball.  You can dribble, shoot, kick, pass or just let the ball lay there – why?  because you are in control.  The managing bank (Trustor) of your Trust must perform whatever legal action you request – buy, sell, will, encumber, etc. - because you are in control.  The legal Title to the property you purchased is held within the trust.  Many buyers panic until they understand that the Bank Trust owns the property and you, the buyer, are in total control of the Trust.  You must designate who is the owner of the trust,  the same as you would with a real estate deed in the U.S.A.  You will also designate a person (usually family) to replace you in the event of your death.  If there are two or more owners (trustees) and one of them dies the remaining owners become full owners.  It is important for you to have a will in the USA and a will in Mexico that specifies what happens to your interest in the trust when you die.

So let’s cut the legal babble and show by actual experience how safe the trust is.  When you sell your property the trust is transferrable with minimum expense and effort.  Playa De Oro has had several successful transfers.  If you die the trust continues with the person you have designated to replace you.  We have seen and assisted with death’s of the trustee and transfer to the survivor, or designated person, without any difficulty.  Should you have a dispute with a contractor, family member, legal action against you (even from the USA) or some other issue that could cause a lien against the property the lien must be filed against the trust not you!!!  We have seen several cases where liens were threatened or attempted, however none have been successfully filed as the process to file is very difficult.  My favorite experience with the Fidi occurred when a married guy purchased an expensive seafront lot at Playa De Oro and established the trust in his name and his lady friend’s name.  The guy died and his family tried every possible legal action they could to prevent the lady friend from receiving the entire property.  After several months of legal maneuvering in the USA and Mexico the lady friend received the property due to the legal strength of the trust.  Although this is not a usual example, it does illustrate the power of the Fidi and the strength of the Bank Trust System.

After 10-years of working with the Fidi, I can say it is the best and safest form of ownership for property in Mexico.  If you have a Fidi you are secure and safe!!!!  To maintain your Fidi, you only have to pay the annual maintenance fee and make sure your Trust Bank has a good address and contact information for you.  

Bruce and Karen Parkman are the owners/developers of Playa De Oro, voted the best development in San Felipe 5 years in a row and can be contacted at www.playadeoro.com parkstrong@yahoo.com Cell phone 509.981.4891.