There are 3 ways that foreigners can purchase land (and homes) in the San Felipe area.

Bank Trust

 
 Foreigners can purchase land in Mexico through a Fideicomiso or "Bank Trust".

With the North American Free Trade Agreement beginning January 1, 1994, the Foreign Investment Act of 1993 was passed by the Mexican congress to promote foreign investment into Mexico. This law allowed foreigners to own 100% of the shares of a corporation and purchase property. As a foreigner, you can acquire irrevocable and absolute ownership rights to property in Mexico through a 50 year perpetually irrevocable and transferable Fideicomiso Trust. This enabled foreigners, as beneficiaries of the trusts, to legally enjoy unrestricted use of land located in the restricted area.
Fideicomiso is the legal equivalent of deeded ownership (commonly referred to in the U.S. as fee simple). Upon the purchase of land through a Fideicomiso, the Mexican Government issues a permit to a Mexican bank of your choice. Clear, lien-free title to the property is then delivered to that bank. The bank acts as the trustee designating the purchaser as the beneficiary of the trust. The bank acts as an employee of the beneficiary in all transactions involving the property. As the beneficiary, you retain full use and control of the property and make all decisions concerning the property. Title insurance is also available from U.S. title insurance companies. Owning land in Mexico under a Fideicomiso Trust gives you the right to use, enjoy, lease, improve, mortgage, sell, profit, inherit and will the property.  

The Mexican Fideicomiso has its origins in the American Trust. Dating back to the early 20th century, the Fideicomiso was originally adapted from the American trust and tailored to Mexican regulations. The origin of the term Fideicomiso comes from a Roman contract entitled Pacto de Fuduccia. The Fideicomiso can be applied to any type of contract as long as the purpose of the Fideicomiso is not illegal.

The current Mexican constitution was issued in 1917. Within the constitution, article 27 regulates everything concerning the Mexican Territory, ground, underground, sea, waters, natural resources and general rules concerning property. Article 27 also establishes the "restricted area". The restricted area encompasses 100 kilometers along the border and 50 kilometers along the coast. Article 27 also prevents foreigners from "direct" ownership of property within the restricted area. For this reason, foreigners are allowed to purchase property in an "indirect way". The most common is through a Fideicomiso.

Ejido Land

Ejido land is land set aside by the Mexican government to be used by communities mostly for farming. The Ejido nearest to San Felipe has a perfect view of the Sea of Cortez. Each plot of land (40 meters X 40 meters) was given to Mexican citizens in a lottery system. Each Mexican citizen has  full property rights. In this particular Ejido, Mexican citizens have the right to sell their land to Americans and Canadians giving the new property owner full rights to the land. This is why it is so important to buy Ejido land through the Ejido office. Once the property has been transferred to the new owners, the paperwork is signed by the Ejidotaries and is filed in Mexicalli.

Any past problems that people have had in other Ejidos was due to the fact that they did not go through the Ejido office, they dealt directly with the land owner, and the land owner changed their mind and wanted more money. Always go through the Ejido office!
There are several Americans here with very nice homes.

Leased Land

Leased land can be very affordable. Like Ejido land a bank cannot repossess it. It also does not need a Fideicomiso. Fideicomisos can be very expensive. Only purchase your lease from a trusted member of the community. There are several here in San Felipe. The homes on leased land are closest to the beaches. The homes are very good vacation and retirement homes. Only buy in an established area with other Americans and Canadians. Ask around, talk to the neighbors. 

Patty Bell

Remember: Be leary of pushy sales agents that make promises that can not be kept!! Always deal with a registered member of the Baja California Real Estate Board.