Title Insurance

Title Insurance is not required in Mexico but, it is very strongly recommended. The policy is a “contract of indemnity” that guarantees a purchasers ownership rights and lien interest as established in the public deed (escritura publica). This policy insures the purchaser against any loss suffered by a defect or cloud on title. The policy is the only guarantee that any buyer or lender can receive that protects their rights of ownership or lien priority as recorded in the Mexican public registry of property and commerce. There are two title companies with a good solid reputation for doing business in Mexico and they are Stewart Title Company and First American. They apply a United States standard of title insurance on property by performing an extended title search (non-standard by Mexican Practice) and obtaining all relevant documents in the chain of title. They have more than 110 years of real estate experience in the United States and are traded on the New York Stock Exchange.

Notario Publicos are very good but they do not provide any type of guarantee in the event of a defect on title. They do not have the financial responsibility to pay the property owner or lender in the event they suffer a monetary loss due to fraud, impersonation, misrepresentation, recording error, litigation against the seller, a prior owner, a missed lien, encumbrance, and/or a secret heir or undisclosed spouse.

The insurance policy is a onetime premium payment and the policy stays in full force and effect for as long as the purchaser owns the property. The company that issues the policy has the legal responsibility to defend the insured customer against any claims, losses, or lawsuits filed against the insured title holder. Normally they will respond within 30 days of any claim against title.