Interview to Orlando Santamaria, Real Estate Lawyer in the area
Posted on 2020-04-21 | by Poncho
Can you please tell us a little bit more about you, where you are from and how you ended up living in Puerto Vallarta?
Hi Alfonso, I am originally from a small town south of here called Tomatlan, we moved to Puerto Vallarta when I was 9 years old, I studied most of my life here but I also went to study in Guadalajara, Mexico City and abroad (London and Berlin). After I graduated from business school, I went to live in Mexico City and in 2013 I moved back to PV full time.
What do you love about Puerto Vallarta?
I love the fact that it is a small city with a cosmopolitan air; we have great restaurants, cultural venues, the beach and it is one of the best places in Mexico to live in if you are gay.
As a Real Estate lawyer, can you please let us know what happens if people don’t pay their trust for several years?
Yes, our law states that when a person does not pay the trust or 3 years, the trustee, which is always a bank, can terminate the contract due to a lack of payment. The bank has to notify the beneficiary of the trust and if within 15 business days there is no answer, the bank has the right to sell those assets. In practice, however, this rarely happens as we have seen people owing 10 years in fees and when they sell, they just pay the delinquent fees and the corresponding fines. But I do tell my clients all the time they have to pay their fees because the fact that we haven’t seen it much doesn’t mean the bank does not have the right to do it.
Can the Mexican government take away the property of the buyers and what happens after the 50 years’ trust ends, how easy is it to renew?
NO, the Mexican government cannot take away the property because is not a right they have. The Mexican government issues a permit to the bank when the beneficiary of the trust is a foreigner who is acquiring property within the restricted zone (50 km from the seashore or 100 km from the borders). Once the permit is due, the bank has to renew that permit by orders of the beneficiary of the trust and create a new deed. A big misconception in the trust contract is that it can only be used by a foreigner. The trust contract can also be used by Mexicans, the only difference is that Mexicans do not need a permit from Foreign Affairs to acquire land but foreigners do when buying in the restricted zone.
We know property taxes are affordable in Mexico in comparison to the USA or Canada, what happens if someone doesn’t pay the property taxes for several years?
You get heavy fines, again our local laws establish that the municipality could repossess a property that hasn’t paid taxes for a long time especially if the amount of those unpaid taxes equal the legal value of the property, but in practice, you do get a couple of warnings before they would try to repossess. My advice: pay your taxes.
Most of the buildings in the area had their annual meeting lately or they will have it soon, BUT what happens if a homeowner is not paying their HOA dues for several years?
Our Civil code that rules properties in the condominium regime establishes that there is a process on which the condominium as a whole can auction the property following a process established in that code in order to pay those fees. However, fees expire after 2 years according to our civil law, so administrators have to carefully prepare along with the lawyer the lawsuit in order to succeed to take the property away from the delinquent owner. Another problem arising when not paying fees is that the delinquent owner cannot sell the property because notaries will require a non-debt on HOA fees to sign the deed of property transfer.
Some people from the USA or Canada asked me whether it is required to have trust if they are married to a Mexican citizen.
If their names are going to be in the deed with 50% of the property, yes they need to create a trust because as foreigners they cannot have a property in the restricted area.
Other constant questions I receive from clients are: if they can purchase a piece of real estate in PV with their tourist card, is it possible to purchase a car? Can you please let us know more about it?
They could but this is what happens: our Jalisco mobility law dictates that when a person wants to get a license plate in their names, they need to identify themselves with a valid Mexican photo id. In case they are foreigners, they need to have a temporary or permanent residency. Tourist cards are not valid since they don’t have a picture, so the simple answer would be no, they cannot. However, car companies use a trick to get provisional license plates and sell cars to tourists who are in the process of becoming residents. If you buy a used car, you will have to eventually become a resident if you want to have the license plate in your name.
If you want to know more legal information please contact Orlando Santamaria at firstname.lastname@example.org or visit his website: www.lex360.com