Real Estate Investment MortgageMortgage Real Estate Investment
Which are the most commonly used real estate finance collateral arrangements and how are these collateral rights improved? Typical financial guarantee trustee arrangements, which may cover not only real estate but also resources from the projects, licenses, treaties and insurances, are the most commonly used financial guarantee arrangements. Guarantee arrangements are also used to finance office space, shops and industry estates, as the confidence is a great tool to track leases entered into with leases and the resulting operating income.
How are typical credit terms agreed in finance contracts? Certain joint obligations contained in finance contracts are: provision of services by the debtor; use of resources and revenues from the sales of entities under construction; ensuring ownership of the real estate; minimal terms and condition for the sales or leases of entities under construction; assurance obligations; maintenance and use of the real estate; obligations to ensure the funded project's ability to be financially independent from other construction works undertaken by the client.
A mortgage is enforced when the creditor submits a debt to a judicial authority in which he demands that the debt be paid and that the lien be enforced in order to fulfil the outstanding debt. In case the Mortgagor is unable to fulfil his unfulfilled obligation or make payments, the Courts shall order the auction of the pledged assets.
The majority of state by-laws foresee specific enforcement proceedings for mortgages, which are usually faster than normal civilian proceedings. Forced sales are also one of the major causes of the frequent use of guarantee trusts in Mexico: guarantee trusts involve the use of public (out-of-court) enforcement proceedings. Extrajudicial enforcement proceedings are stipulated in the escrow agreements and, in order to be enforcable, must fulfil certain minimal conditions, such as the possibility of paying the debtor the sums due before enforcement commences.
As a rule, the proceedings are carried out by the fiduciary, who can call on the support of an expert and real estate brokers. Timeframes for the execution of securities also depend on the kind of interest. A mortgage, for example, is usually enforced between eight and 24 month. Whilst the time frame for foreclosing a trusts is dependent on the process established in the trusts, it is usually faster than foreclosing a mortgage due to its extra-judicial character.
How is the general real estate investment environment in your country? In spite of the unpredictable nature of the global trade and financial indicator markets and the fact that Mexico's economy has not grown as fast as anticipated due to a number of reasons (e.g. uncertainty, low inflation, corruption), Mexico's real estate sentiment is still positive and foreign investment continues to be seen in real estate development.
Which are the most frequent real estate investment companies? AFORES (Mexican Retirement Funds), FIBRAS (Real Estate Funds), Real Estate Development Companies and Real Estate Investment Companies, as well as Real Estate Investment Companies and Real Estate Investment Companies. Is there a limit to what can be done to invest in real estate abroad? It is not a limitation on the number of aliens who invest in real estate in Mexico if the property is owned through a company or foundation.
A foreigner may directly participate in the investment of real estate before receiving the relevant permission from the Department of State or proof from the Department that the relevant notification was made prior to the purchase pursuant to the Law on International Investments. In addition, alien property owners are confined to plots of real estate outside the defined exclusion area, i.e. to any area within 100 km of a neighboring frontier or 50 km of a coastline.
The Foreign Investment Act, however, provides that foreign nationals may purchase shares in real estate in the prohibited area through a trustee, provided that: the trustee has a term of no more than 50 years, which may be extended for a further 50 years. Typical real estate investment patterns and their pros and cons (including fiscal implications).
Mexico's unique characteristic compared to other countries is the sharing of fiduciary contracts for the purpose of developing real estate properties. Fiduciary contracts can act as either open taxpayers or open taxpayers. The particular pros and cons of a given entity depends mainly on the nature of the real estate to be built, on whether the resulting property is intended for selling or renting, and on the special taxation rules applicable to investment firms (whether they are natural or legal persons in Mexico or foreign).