Rights And Obligations Contained In Your Real Estate Trust

I know, some of you will give me that look, but chances are that 3 out of 4 people with a fideicomiso are not familiar with the terms and obligations contained in their respective trust agreement.

Common Rights specified in the trust:

1. To rent the property;
2. Encumber the property to guarantee obligations such as loans;
3. Bequeath the trust interest;
4. Assign your trust beneficiary rights.

Obligations contained in the trust:

Concerning leases, fideicomisos may vary from bank to bank, most contracts and banks coincide in regarding contracts, particularly old fideicomisos, that the client must request the bank to sign the lease as landlord, most clients balk at this because they don’t want to pay the bank a fee, that usually runs from $400 to $600.

Concerning the value of the property, there are some banks, like Bancomer, that include a clause in the fideicomiso contract binding the client to report to the bank any improvements made to the property, (usually every 2 to 3 years), the purpose of this is that the bank is able to increase their annual handling fees based on the value of the property.

Trust Fees (Commissions) payable to the Bank (agreed in US currency):

1. $500 (It varies from bank to bank) for the annual handling of the trust.
2. Note: The usual terms of fideicomisos authorize the bank to review and update its fees.
3. $500, for any modification made to the trust agreement.
4. $500, to transfer the property under trust.
5. $500, to grant a power of attorney to defend the property under trust.
6. $500, to assign the trust beneficiary rights to a third party.
7. $700 annual, when the Fiduciary is asked to allow a mortgage on the property under trust.

I would be very concerned if your property is larger than 2,000 square meters and you did not know that there is a clause determining that you had to invest a specific amount of money in the property within 24 months and you not only where oblivious of it, the time has already elapsed and now you find out that the clause in the contract does include a penalty which consists in forfeiting the investment on behalf of the Mexican government.

Somebody may dare to say that I use scare tactics to raise a client base, will, call it what you want, but would you also accuse your doctor of the same after getting lab tests interpreted to you?

Many are unaware of the majority of obligations that they must observe under the fideicomiso thus are not compliant with them, and this is not limited to the bank that handles the fideicomiso. Yes, you may hire me to review and interpret the agreement for you.

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