One of the most important aspects of protecting a real estate investment is making sure the title to the property is in proper order. In Mexico, the Notary Public and the Public Registry System provides this legal assurance to all real estate transactions; nevertheless, those who wish to have an added layer of protection may purchase Title Insurance. Other types of indemnity coverage focus on possible future events and charge an annual premium. Title insurance protects against loss from hazards and defects that may already exist and concern the title.
Covered title risks include:
- Invalid documents executed under expired/nonexistent power
- False assumption of identity concerning the legitimate property owner
- Liens and ﬁnancial burdens charged to the previous property owner
- Non registered property easements
- Hidden heirs of previous property owners
The title agent or attorney working on behalf of the underwriter examines pertinent documents to determine whether the property is insurable.
Pertinent documents include:
- Outstanding mortgages
- Property liens
- Highway or utility line easements
- Pending legal actions
- Notary acknowledgements
For the homeowner to be covered, he or she must purchase an owner’s title insurance policy in addition to the required lender or mortgagee title insurance policy. An owner’s title insurance policy lasts as long as the beneﬁciary or his or her heirs have an interest in the property – maybe even after the homeowner has sold the property.