MEXICO Law and Practice Contributed by: Roberto Cannizzo, Carlo Cannizzo, Stefano Amato and Mauricio Moreno-Rey, Cannizzo
panies, the Stock Market Law and the General Law of Securities and Credit Transactions will apply. For the transfer of title to Ejido property, the applicable law is the Agrarian Law. 2.3 Effecting Lawful and Proper Transfer of Title In Mexico, the legal methods for acquiring prop - erty are: • by transfer, whether onerous (such as a sale and purchase agreement) or gratuitous (such as a donation agreement). The most common way to acquire property is by entering one of the following agreements: • a purchase agreement, as defined in Article 2248 of the Civil Code for Mexico City, where - by one party agrees to transfer ownership of goods or a right, and the other party agrees to pay a specific price for it; • a trust agreement, as defined in Article 381 of the General Law of Securities and Credit Transactions, whereby a trustor, by virtue of a trust, transfers the ownership of one or more goods or rights to a trust institution (trustee) for lawful and specified purposes, with the trust institution responsible for realising those purposes; in an administration trust, the trus - tee maintains ownership of the goods or right, and the beneficiary is considered the holder of the trust rights; and • corporate combinations (mergers or purchase of shares). • usucapion; • accession; • succession by reason of death; and
All transfers of title of real estate in Mexico are formalised before a notary public or judge and registered in the Public Registry of Prop - erty (RPP) of the state where the real estate is located or, in case of agrarian property, in the corresponding agrarian registry. Protection of bad title is usually included in the purchase agreement as an indemnity in case of eviction. Although title insurance is available in Mexico, it is uncommon, as is insurance to cover contractual liability resulting from breaches of the seller’s representations and warranties in an acquisition agreement. Instead, indemnity is often supported by an escrow holdback, a price adjustment, or a combination of both. 2.4 Real Estate Due Diligence Buyers usually carry out real estate due diligence through their legal advisers. The matters typi - cally involved in real estate due diligence are as follows. • Ownership – to be performed by the attor - neys. Encumbrances on the real estate (including liens and some litigation aspects) may be identified through the request of a real estate background folio, from the RPP. Pay - ment of real estate taxes and utilities for the past five years, which, generally, is the appli - cable statute of limitations for tax payments, are also requested. In certain cases, searches are conducted to determine the existence of agrarian issues, mainly by reviewing the title chain and determining if the process to have the property become private property were completed. In the case of agrarian properties, there are other aspects to be reviewed, such as the records of the property in the Agrarian Registry. • Corporate – to be performed by the attor - neys. Liens on the company through the
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