Title Insurance
PURCHASING PROPERTY IN THE ROSARITO BEACH AREA
Understanding Title Insurance in Mexico
One of the most important aspects of protecting a real estate investment is making sure the title to the property is in proper order. Title insurance protects your ownership and use of the property by guarding against unknown and hidden risks that may cause you loss or affect your ownership.
Title insurance is nothing new to most people in the United States and Canada, but in Mexico, it is relatively new. For anyone mortgaging a home in the United States title insurance is mandatory. The lender will not lend to you unless you purchase title insurance; in Mexico title insurance is fully optional. Two companies have entered the Mexican market for title insurance; First American Title and Secure Title.
Real estate transactions involve elements of risk and title insurance policies provide protection for these risks. In Mexico, a Notary Public and the Public Registry System provide legal assurance to the real estate transactions; nevertheless, they do not provide economic assurance if something goes wrong.
Matters Typically Covered in a Policy:
- Invalid documents executed under expired/ nonexistent power
- False assumption of identity concerning the legitimate property owner
- Liens and financial burdens charged to the previous property owner
- Non-registered property easements
- Hidden heirs of previous property owners
The importance of Title Insurance in Mexico
The process to acquire title insurance in Mexico is the same as it is in the United States according to Robert Calamari, President of Global Title and an issuing agent for First American in Mexico. “We have determined that our risk, as underwriters on Mexican property, is not much greater than insuring property in the United States. Assuming the same due diligence standards in researching the property are met”, says Calamari.
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Our Recommendation
The title insurance policies we recommend are from United States title companies and you would enter into a private contract with them in the United States. This means that all disputes are resolved in the United States court system.
In an insurance industry article, Robert Calamari wrote: “Responding to customer requests, title companies active in the commercial field have all moved forward on the international front. Some have sought to actually expand operations and establish a local presence in certain foreign jurisdictions. Others have developed an ALTA – like a product that can be used in any foreign jurisdiction that meets the company’s qualifications. This type of product, as used by our companies, keeps the policy solely in the United States. It is a contract of insurance between the insured and insurer. Despite the foreign territory, all litigation regarding coverage is determined in the United States in courts that are familiar with title insurance law”.
Title policy conditions and payment for loss are the same as those protecting United States properties. If it is a United States company providing the insurance, the title policy is a private contract entered into by two parties in the United States. Therefore, any disputes are subject to the United States courts to resolve.
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