If you are planning on purchasing a property in Mexico it is important to protect yourself in the event of possible legal disputes. Conflicts over ownership rights to a home or piece of land do happen, and one of the ways to insure against potential financial loss is to obtain title insurance.
What is title insurance?
It´s an agreement of indemnity between the purchaser and the insurance company, which means that with title insurance policy you will be protected in case there is ever any claim in title.This is could be as a consequence of many things: fraud, forgeddocuments, lost heirs and the overlaps of property.
Here´s an example. Your neighbor has title insurance and and has just completed a survey of his land. He´s determined that his property actually overlaps on to yours, and in the area of overlap you have a building- let´s say an apartment or a condo. Theoretically this building is on your neighbor´s property, which means that owns it. He is the owner of everything that is built over his property. That is a clear claim in title, and if you as the developer have title insurance it would be defended in court.
Why is it important?
Title insurance is the only financial vehicle through which you can get your money back in the event of a claim in title where you stand to lose your property. Here in Mexico it is the only way through in which you can be protected. It´s a guarantee that says: ¨You can get your money back if you lose your property due to fraud or a claim in title.¨ If you don´t have title insurance and there is a claim in title then you are on your own and would have to fight off any litigation to protect your property. The attorneys, the notary public, the government, and public registry will not help you.
What are the legal effects if I do have the title insurance?
Prior to insuring the property your lawyers have to verify that the property is free and clear of any liens. They also must confirm that the seller is the rightful owner. This is done through the title research which verifies that everything is in order, giving you a complete chain of title from beginning to end, even going back until the time of the revolution if necessary. Every single transfer of title or modification of the property is checked to see if it was done appropriately and the underwriting process we will determine if the property is insurable or not. If anything is wrong the insurance policy could have an exception of coverage. Or you may be denied the granting of the insurance policy on that property.
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