By Mitch Creekmore

Title Insurance in Mexico?

The real property conveyance process in Mexico, like any other civil code system in South and Central America, and many other countries in the world, is reliant upon individuals to transfer ownership rights.

These highly educated and "hand picked" public notaries have the obligation, right and privilege to consummate all real estate transactions within their given territorial jurisdiction. Their acknowledgment and certification procedure provides "judicial certainty" to the authenticity of the process. With this process in place, Mexico can be said to have a good land conveyancing system.

However, one must never lose sight of the fact that it is a system reliant on the performance of various people, not just the public notary. Sellers, buyers, agents, surveyors, property recorders and municipal employees all come into the mix. And as we have all learned throughout the annals of time, human beings, though not intending to do so, do make mistakes. Errors are made. We are not infallible.

In real estate matters though, mistakes can be costly and create significant losses. For that reason alone, reliance upon a monetary indemnification that guarantees remuneration in the event of loss due to a title defect or error is a must. Suing the seller to recover property or money, whether in the United States or in a foreign jurisdiction, is a tough alternative to the viability of title insurance.

Why title insurance?

Title insurance on Mexican real estate is more than just a title insurance policy. It is an in-depth examination concerning title documents, and real estate closing process. In order to issue an Owner's Policy of Title Insurance , and assume the inherent monetary liability that comes with the policy issuance, the insuring company must be as certain as possible regarding all of the various elements in the property transfer.

The process of the title insurance company, is to eliminate risk by examining all of the relevant issues today. If given the opportunity, a title insurance company may both buyer and seller of the relevant concerns that may be outstanding or in process prior to the consummation of the property conveyance.

This type of investigation coupled with financial indemnification gives the non-Mexican purchaser of real estate comfort and security knowing that a company with over 100 years of expertise has examined all of the title matters and issues a title policy. When compared to the other closing costs associated with real property conveyances in Mexico , i.e., transfer taxes and notary fees, an Owner's Policy of Title Insurance will for the most part be the cheapest.

What about the notario publico?

It is often said that it is the responsibility of the notario to provide title assurance, and that they have the same requirement of certification as would a title insurance company. That is true. However, it is not often understood that in Mexico a title policy not only protects against liens, encumbrances, and tax issues, but also against fraud, misrepresentation, impersonation, secret marriages, incapacity of parties, undisclosed heirs and other hidden risk as provided by the policy. Even the best of notarios or attorneys may be unable to discover these title problems.*

What additional benefits does a title policy provide?

Since title policies are fully negotiable contracts of indemnity, a title company can consider and insure a variety of title matters for the benefit of the proposed insured. For example a title insurance policy has the ability to provide affirmative coverage and endorsements that protect purchasers against risks that may be discovered in the title search process. How can any one individual, even a notario publico, give these types of assurances that have real dollars standing behind the assurance and that ultimately will protect a buyer in the event of a loss.

Never forget one thing, no matter who tells you that title insurance isn't necessary, just remember that it is the ONLY monetary indemnification that you will receive protecting your ownership rights.

*Subject to certain limits as provided in the policy.

Mitch Creekmore is Business Development Director at Stewart Title Guaranty de Mexico, S.A. de C.V. on 1990 Post Oak Boulevard, Houston, Texas 77056
Tel: 713-625-8753, Fax: 713-629-2321, This email address is being protected from spam bots, you need Javascript enabled to view it

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