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Insuring Mexican property only way to go

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Following the eviction of several longtime U.S. homeowners in Ensenada, Mexico, in the 1990s, Americans have been weary of buying land south of the border. To boost foreign investments, Stewart Title lends its services now to the Baja region, offering title insurance, escrow and closing services as one of the first and only U.S. company licensed by the Mexican government.

"We are a company that people are familiar with and know they are not just giving their money to a regular person or developer who does not have a reputable history," said Luis Palacios, marketing and business development manager of Stewart Title Baja.

One of the company's main clients is the San Felipe Marina Golf Resort & Spa, a master-planned community offering hotel suites, condominiums, beachfront villas and single-family homes to Americans. Stewart Title Baja partnered with the developers in 2005, offering title insurance to each individual unit.

"This will actually help the developer sell his unit. His clients will know that they are receiving 100 percent security," Palacios said.

The Mexican Constitution prohibits foreigners from legally owning property near its border with the United States. Baja is in the restricted zone. By purchasing title insurance on the property, the homeowner buys the title to the property and the right to own, occupy and use the space. This protects the owner from any future loss on the property. Mexico recently maximized its long-term beneficiary trusts (or fideicomisos) for homeowners, from 30 to 50 years. Although a bank may hold the trust, it does not interfere with the client's right to build, rent, lease or hold onto the property, Palacios assured.

"It is not an obligation in Mexico like in the U.S., but it is really recommended," Palacios said. "There are a lot of problems with properties in Mexico. You are still hearing horror stories about people reclaiming their land. This would be the only way of giving clients 100 percent security." He urged future homeowners to do "their homework" on property they are interested in, or hire a company such as Stewart Title Baja to do it for them. Staff members search the public land records, issuing a summary of the known legal status and issues affecting the title. The company also provides a financially backed guaranty protecting the holder from issues like liens, encumbrances, fraud, hidden heirs and improperly executed documents.

"If (a new homeowner) does it in the U.S., why not do it in a foreign country where they're not familiar with its laws?" Palacios said.

For further information, contact Stewart Title Baja's San Diego office at (619) 819-5591 or visit www.stewartbajamex.com.

Kurland is a San Diego-based freelance writer.

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