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Real Estate in Mexico - What is a Notario?
In looking at real estate for sale in Mexico the use and purpose of notaries is very different than that in the United States and other countries. There are many similarities in purchasing Mexico real estate for sale as compared to other countries and some very big differences. One of these is the use of Notaries (Notarios) in México.
Below is an article written by John Haggerty, who is a sales agent for the Casa del Mar office of Coldwell Banker Realty, explaining some of those differences
“Why, I could get that notarized at my bank for free! Notaries are everywhere. They’re a dime a dozen.”
Yes, you could, and they are, in the US. But what a notary in Mexico is and does is very different from anywhere in the United States.
In virtually all US jurisdictions land transactions are recorded in a single location, usually county by county. Closing offices act as money escrows and also prepare the deed, receive loan documents from the lender, obtain the parties’ signatures on all documents, and prepare a comprehensive closing statement that shows all of the funds involved and their disposition.
The closing officer, or another person in the office, will be a notary, and will notarize the parties’ signatures on the documents (essentially, certify that the person signing is actually who he or she claims to be). Then, when all the documents are ready and all they funds are in place, the closer records the deed (and mortgage or deed of trust, if it’s financed) with the county recorder or equivalent. This part of the process is usually physically handled by the title company, which will have issued a preliminary title report, and which will issue its actual title policy once recording is completed. Once the recording numbers are reported back to the closing agent (usually the same day), he or she disburses the funds based on the closing statement and the transaction is completed. Thus, the recording system is centralized and the handling of the transaction is also centralized.
Mexico’s land-registration and closing system is different, and the role of the notary is also very different, having been developed from a Spanish model along with the remainder of Mexico’s legal system.
Notaries in Mexico are very elite attorneys who have taken additional training, passed rigorous examinations, and obtained appointment to one of a limited number of positions in any particular city or municipality. The number of notary positions is related to population, much like the US apportionment of congressmen. Obtaining an appointment is thus very desirable and also very competitive.
Mexican notaries’ duties also go far beyond merely certifying the identity of the parties. They are the official recorders of land transfers, and it is the “book” of the notario (notary) in which the transfer is actually recorded (a notice of recordation is later filed with the county registration office as well, but the official record is the notario’s book). The notario is usually the one who drafts (or has another attorney draft) the document of transfer itself and obtains advance approval for it from the buyer, seller, and the trustee bank prior to actual signing. At the culmination of the process, the notario records the signature of each interested party, and keeps the original of the document. The deed itself (for foreigners, a “fideicomiso”, for Mexican citizens an “escritura”) is also much lengthier than the typical US statutory warranty deed -- which is little more than a single sentence plus the legal description. It recites much of the legal history of the property, and the identities and
positions of each person signing, as well as a detailed legal description. The notario also collects collateral documentation including certificates of no lien and certificate of current property taxes paid.
Finally, besides carrying out these functions, the notario also calculates the amount of capital gains tax (for which he is solidarity responsible), and the transfer tax and any other taxes due, collects the funds, and pays the funds to the government. And the notario, in the process of carrying out all these functions, certifies that the title transferred is as described and is free and clear of liens and adverse claims.
What notarios do NOT do is equally important: Most notarios will not handle your purchase money (some exceptions exist), and they do not prepare comprehensive closing statements, so some third party must carry out these roles. Also, they will not follow up with trust bank fees nor with any homeowner association dues. Too often, this means that you simply won’t get a full closing statement, unless a third party performs one for you. The Pacific Closings Company, a subsidiary of Pedregal, offers the buyer and seller a comprehensive closing statement among the other ancillary services mentioned above. We also generally recommend the use of an independent US escrow to handle the purchase money for all transactions (for sales of Pedregal inventory we do handle funds if the clients prefer), making disbursals under the parties’ written instructions.
When you see that large figure after the notary’s name on your closing, you’ll now have an idea why it’s so much bigger than you would expect based on your US real estate experience.