ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN MEXICO] 157

KEY FACTS OF REAL ESTATE ACQUISITIONS UNDER MEXICAN LAW

Preface Martínez, Algaba, De Haro y Curiel, S.C. (“ MAHC ”), and Martínez Berlanga Abogados, S.C. (“ MBA ”) are law firms in Mexico with recognized trajectory, based in Mexico City, committed to provide the highest standard of professional legal counsel and representation. MAHC was established in 1969, the firm is comprised of a highly experienced and qualified team of professionals in the diverse areas of law practiced by the firm. MAHC is reputed to be one of the few law firms in Mexico that offers first class litigation services, encompassing virtually every aspect of commercial, civil, and administrative legal procedures, including domestic and international arbitration, as well as a consulting legal area in matters related to corporate, financial, banking, regulatory, real estate, energy, and communications. MBA, established in 2006, is comprised by professionals with high experience in general corporate, restructurings, corporate finance, mergers and acquisitions, joint-ventures, cross border transactions, real estate, local and cross border trust structures, and testamentary successions, as well as regulatory. These combination of practice areas and fields of expertise allow our firms to render enhanced legal advice, a result of the synergy and collective experience of our trial and consultant lawyers that grants our clients a competitive advantage hard to match by any law firm in Mexico. I. Real Estate General Overview The real estate business in Mexico has been increasingly growing during the last decades to the point that now it is considered as a serious, viable and promising economic activity among both Mexicans and foreigners. This growth has

developed in a more dynamic and secure economic sector in our country. However, it is still a relatively new business in Mexico, in which real estate agents are not yet required to be licensed and real estate professional organizations are not that regulated nor common as in other countries. Investors now can find a variety of specialized agents and corporations that provide tailor- made services, ideal for foreign investors that seek to buy or sell real estate in the country. These services are highly recommended specially for those not familiar with the local real estate regulations and the Spanish language. II. Property Rights in Mexico and Limitations In Mexico, all property rights come from the State itself, who owns “ the original property of lands and water… and has had and has the right to transfer ownership of property to private persons, thus, transforming it into private property. 1 Accordingly, the Mexican Federal Civil Code ( Código Civil Federal ), as well as those Civil Codes of each Mexican State, provide that it is the people’s right to use, enjoy and dispose of their property, under the limitations and modalities established in Mexican law. There are also other several limitations to the ownership rights of real estate property imposed in the Mexican Constitution, like, for example, the Nation’s direct domain over natural resources such as oil, minerals and underground water, or the expropriation of the land by the State in case of public interest

1 Article 27 of the Mexican United States Political Constitution ( Constitución Política de los Estados Unidos Mexicanos ) (the “ Mexican Constitution ”).

ILN Real Estate Group – Buying and Selling Real Estate Series

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