Title search and insurance is a standard real estate policy procedure practiced in many parts of the United States and Canada, but not in Mexico. It is a legal policy that protects buyers and sellers against financial loss due to liens, encumbrances, or defects during property acquisition.
Title search and insurance challenges in Mexico
Although title search and insurance are a significant part of real estate security, it is still rarely practiced in Mexico due to the lack of proper information available to the general public. Data are still written manually in large books by court clerks or recorders of deeds. The title search becomes a tedious visit to the local registry office where the property location. It requires strenuous labor to research and investigate the present condition of the estate.
Title search records are available in the form of documents, marriage certificates, tax, probate records, and other materials that can significantly affect the property title.
Title insurance policy in Mexico
Few major title insurance companies have entered the Mexico market to provide policies and insurance for real estate clients in recent years.
There are several requirements to claim the coverage provided by these companies. The criteria include the name of the present titleholder, a copy of the deed, and the maximum expected insurance amount. With this information, the company will determine if the specific property entails title insurance or not.
Property insurance in Mexico
Contrary to the belief that title insurance is unnecessary in Mexico, it was proven otherwise.
Title search requests and certificates are available at the Public Registry Department. This certificate provides safety for the buyers and ensures that he/she has all the rights that come with the property.
Another method of acquiring property insurance in Mexico is through the
Mexico Bank Trust or “fideicomso”. The Bank trust offers a legal attorney for future problems if it arises but does not take responsibility for issues that occur during or before the property acquisition.
On the other hand, the title insurance policy covers past and future occurrences.
Some of the guarantees of a title insurance policy are:
- The title of the property described in the plan is instantly relevant
- Providing search titles to ensure no liens, defects, encumbrances or other issues in the policy
- Ensures that it is marketable title
- The investor or buyer has access to the claims of the property
Exclusion from Policy in the US and Mexico are:
- If there are laws, regulations or ordinances that restrict the usage of the property
- If there are rights of domain recorded before the start of the policy
- If the liens, encumbrances or defects claims that:
the claimant created, suffered or agreed to it
the record is only known to the claimant but not available to the public
it appears only after creating the policy
- If the evaluation and taxes are not existing claims
- If the required documents are not on public records but need assertion and inspection on the property or owner by other authorities
- If evidence of title records are unavailable in public documentation or not evident even after a physical inspection
- If there are conflicts in boundaries, encroachment, discrepancies, shortage or
- Excess of land, as recorded in a reliable survey.
Exclusion from insurance coverage in Mexico
- All rights on substance and minerals ( salts, petroleum, metals, precious gems, other hydrocarbons, etc.) stated in Article 27 of the Mexican Constitution belongs to the state. Therefore, the policy does not cover title insurance to these claims.
- If the property was/is acquired by confiscation or expropriation by the state, military, rebels, or usurp power during civil wars or revolution.
- Since all water rights belong to the Mexican government. The policy does not cover water titles within such estates.
It is crucial to have title insurance to gain loans from a foreign lender, especially if it involves a pledge or mortgage guarantee by the institution.
To ensure that there is no past or future errors by fraud, forgery, or searchers during land acquisition, refer to a trusted title insurance policy company for maximum benefit and reliable security.