End the Simulation.
"It is about eradicating the simulation of foreign property on the Mexican beaches and eliminating the intermediaries, who through Fideicomisos, Mexican Corporations and "nominal owners" have profited from the Constitutional prohibition that currently restricts the direct ownership for foreigners on the Mexican beaches," expressed the PRI party leader, Manlio Fabio Beltrones, who is the driving force for this reform.
"When approving this form of foreign ownership for residential property on the country's beaches, we will be facilitating the tourist investment and generating local jobs, as well as global migratory trends that- naturally- should be generated by the vicinity and the coastal destinations in our country" added Beltrones.
This prohibition was established by the 1917 Constitution as a result of the XIX century international policy problems, when there was a fear of an invasion by the army of other nations. The reality is that many years back, foreigners have inhabited the Mexican beaches, although not directly as sole owners, but through the aforementioned Fideicomisos or other instruments.
The figure of "Fideicomiso" (30 yr Bank Trust) was created by Mexican President Luis Echeverria in 1971 to promote the investments of tourist-retirees along the Mexican coasts. Back then the first two Master Trusts (Fideicomisos Maestros) were created, which were Las Gaviotas in Rosarito and San Antonio del Mar in Tijuana. Short after that, this figure was recreated in Cancun and Puerto Vallarta.
In 1989 Mexican President Carlos Salinas de Gortari, authorized a reform so that the 30 year period could be extended by another 30 years; until, on December 27 1993, the current 50 year term with the option to renew was authorized.
Thousands of foreigner investors acquire homes through this instrument, which allowed them to have the legal use and enjoyment of the properties, but didn't allow them to have a direct title. When selling these properties, the home owners have to instruct the bank to sign the cession of rights, petition which is often sent by the bank to its headquarters in Mexico City, causing bureaucratic delays and frustration among the parties involved in the transaction, something that with this reform will finally end.