How To Pay Your Annual Trust (Fideicomiso) Fee For Mexican Property

[Carol Billups]

I usually blog if I get asked a question several times. Someone has been searching one of my blogs with this question for several days, I guess that counts as being asked. At least next time he/she searches they’ll find something!

The smarty-pants answer would be: with difficulty.

When a non-Mexican purchases property in Mexico and that property is within 50 KM of the ocean or 100 KM of the borders the Mexican constitution requires them to hold it in trust with a Mexican bank. Totally safe and secure, and this procedure grants the non-Mexican all the same rights, benefits and privileges of a Mexican citizen as pertain to the property. It’s an otherwise great system with only one fault: you have to deal with a Mexican banker. Welcome to the wonderful world of Mexican banks!

Once the trust is established the bank will protect a copy in their vaults. Just for holding on to a sheaf of papers they charge an annual service fee of anywhere from $300-$550 US. The fee is due yearly on the anniversary of your closing. You will not receive a bill; you are supposed to know to pay it. And you cannot just mail a check; it must be paid at the bank.

If you own a home or condominium and are not here full time you probably have a property manager; in most cases they will take over paying the trust fee as part of their service. You will need to provide them with the due date and trust data and never have to think about it again. If you own a vacant lot or are a full time resident you will have to take responsibility for paying the trust fee or finding someone to do it for you. Some closing companies and realtors will, for a fee, take on this onerous task. And it is onerous.

Here’s the most important issue: the banker doesn’t WANT you to pay the trust fee.

You won’t loose your property if you fail to keep current on the trust fees. You’ll still have your trust, but late fees, penalties and interest will accumulate. Until the day comes that you wish to sell. Cha-CHING! As a party to the trust the bank must co-operate in any transaction involving the property. Which they will be glad to do providing your trust fees are up to date. In order to sell you’ll have to pay up all those extra fees. Ouch.

If you don’t think this is deliberate, consider this. I’m a realtor here in town, relatively well-known and therefore in a position to send lots of new business their way. Or steer it to the competition. You would think they would make an exception and let me pay without a hassle. Not a chance, in fact I think I present a challenge to them. The absolute worst was a few years ago. At the time I was in an office downtown, about half a block from the branch housing the trust department. About a week before our due date I started calling the branch asking for the trust officer. Who, of course, was never in. After several attempts I finally got them. I’m a half block away and coming right there, I’ll be there in 2 minutes! Yes, of course, we’ll wait for you. You got it: when I arrived in a minute 30 seconds the trust office was closed. Finally, armed with a good book and a water bottle I camped out in front of the office. When asked I explained I would be there until someone took our trust payment. A very nice person arrived shortly and after a cordial conversation I was given the proper code numbers to pay the fee. It was explained that I should go downstairs, stand in line, and when payment was received bring the ticket back to Mr. Cordial and he would process the receipt. You guessed it: while I was in line he skipped out behind my back.

My best advice: if humanly possible get someone else to take on this task. I now do. It’s worth paying to avoid the aggravation. Geez, and they wonder why I hate bankers so….. are you listening, Bancomer???

Carol Billups is Broker/Owner of REALTY EXECUTIVES Los Cabos. A Certified Home Marketing Specialist, she has enjoyed working with both buyers and sellers for nine years and still thinks hers is the best job on earth. She is also the real estate columnist for Los Cabos Magazine. You can read more of her articles on www.reloscabos.com. You can reach her from the U.S. or Canada at 1-760-481-7694, or in Cabo at 044-624-147-7541.

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© 2009 Carol S. Billups

[Carol Billups]

Just was at Bancomer, they will now take trust payments at any branch (not just the one with the trust department) through the regular tellers. Progress!

[Doug Christensen]

Banks generally change local trust officers with fair regularity. The worst is HSBC, the best is Bancomer, in our area. When the banks went through privatization in 1994, and the changing of hands and names several times in some cases, many trusts seemed to have been lost through the cracks, the boxes that held them shipped to Mexico City or Tijuana.
My suggestion is to stay in touch with real estate professionals in your area and with your bank fiduciary department on a regular basis. Stop in there when you are in town and meet the trust officer. If you own property far from the trust bank, get on their email list and get their email address. Banco del Bahia (formerly Banco Union) is best about this. I try to stay in touch with all the trust officials of each bank, and they have always seemed willing and helpful to receive payment and give a receipt...

[John K. Glaab, CIPS]

Thanks Carol, a good article.
Our company, The Settlement Company has a property tax and bank trust paying system for owners who are not in Mexico when these things come due. This is something we have been doing fro over 15 years. We also have a new product where we can collect taxes on rental properties and make sure they are paid for owners who are renting and keep them out of trouble with Hacienda..
While we do Closings nationally through our Virtual Closings ( we have a trade mark on that in Mexico.) most of the bank paying and trust paying is done in Los Cabos and the La Paz area.
Love to help those who may have had a problem.