Wednesday, February 24, 2016

Foreign Real Estate

I just returned from a vacation in Mexico and have been contemplating (daydreaming) about owning a piece of paradise. Our resort was pushing timeshares as one way to accomplish this twist on the American dream. Being a law librarian, I wanted to investigate the legalities of owning foreign real estate before getting too excited.

I found a 2014 Forbes article specifically mentioning challenges associated with acquiring land in Mexico:

Buying a timeshare in a foreign country presents special challenges. In Mexico, for example, foreigners are not allowed to hold the direct title to property within 30 miles of the coast and 60 miles of international borders. They are limited to “right to use” timeshares.  (There is pending legislation in the Mexican Congress that may change that in the near future.) 

Renee Rastorfer reminded me about GlobaLex  when I ran into difficulties trying to determine if that legislation had passed. Unfortunately, I was still not able to locate an update. Not being fluent in the language can really slow down your research.
The Global CRE Guide is user friendly with an interactive map, but Mexico is not available as an option at this time. Each available country has a section that details any restrictions on foreign ownership, among other useful sections. For instance, according to the website, Italy has a reciprocity restriction where citizens of countries in which Italian citizens are not allowed to buy properties may not buy property in Italy. If the buyer sets up an Italian special purpose vehicle (SPV), then property may be acquired.

Not one to forget about print resources, I found a great resource in our catalog, Cross Border Real Estate Practice (K736 S45 2012). This book addresses many issues that need to be considered when purchasing foreign real estate, which we usually do not think about, such as differences between informal vs. formal cultures and rigid-time vs. fluid-time cultures.

It's easy to get caught up in the moment, but buying foreign real estate is a decision that should not be made without considerable time and effort researching the specifics for the country, and is probably best left for when you return home - not while you are still on vacation.

While we're fantasizing, take a look at these castles for sale!

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