Title insurance is a special type of insurance that protects the insured from loss on a specific piece of property. A Title Insurance Policy provides security against the loss of land as a result of a title problem. Title Insurance can be purchased with or without limitations and exclusions.
It is important to consider Title Insurance when purchasing property in Mexico. A Fideicomiso (Living Trust) does not take the place of or exclude the need for Title Insurance. (A Fideicomiso can be dissolved in the event of Fraud, Errors and Omissions and certain Gov’t and Ejido claims.) When purchasing Title Insurance in Mexico, be sure to read the master policy thoroughly.
Some title insurance companies insure only the Fideicomiso (Living Trust) and exclude fraud, gov’t and Ejido claims, even certain developer liens.
When purchasing title insurance in Mexico make sure that the policy covers everything , the land and not just the Fideicomiso.
Title insurance, so common in many parts of the United States and Canada, is in its infancy in Mexico. While the Public Registry system operates in much the same manner as in other parts of the world, the actual work is still performed manually. Deeds are handwritten into large books, a computerized system is still a dream and title plants are non-existent. Maps of subdivisions and properties are uncommon or incomplete, in some cases.
Therfore information available to create a chain of title for a specific property requires a visit to the local public registry office in the municipality where the property is located, and may require hours of laborious research and investigation to determine if the property is private property, who the sellers are, and if there are liens or encumbrances on the property.
Several major United States title insurance companies have entered the marketplace and are now doing searches in certain parts of the country. One Mexican insurance company is also offering a policy. For those who wish title insurance, we need to have a general description of the property, the name of the current holder of title, preferably a copy of the deed, and the approximate amount to be insured. With this information, we are able to investigate the existence of any existing title data and confirm whether or not title insurance will be available for the specific property.
Those who acquire property in the Mexican Bank Trust (fideicomiso) have felt comfortable in relying upon the trustee bank to research title. The standard fideicomiso (bank trust) document will have a disclaimer, in which the bank will supply a power of attorney to the legal representative of the beneficiary of the trust in order to settle title matters or problems, but the trustee bank will not be the responsible party if, indeed, title problems arise.