November 1, 2012

Real Property Searches

By Jorge Ojeda

In Mexico’s legal system, a general principal exists that holds that an important purpose of public registries is to
provide public notice of the legal acts recorded therein, so that such acts may be considered effective as to third
parties and to provide certainty as to the date the acts were recorded. Note, however, that recordation by itself
does not create ownership rights for property owners. When conducting a legal inspection of a proposed real
estate project, it is necessary to define the aspects that should be reviewed, which include recordation issues that
may relate to the real property in question, and thus result in a need to consider various issues. First, the scope of
private ownership in Mexico should be considered keeping in mind regulatory guidelines applicable to the use of
subsurface rights and air space that is subject to special laws. Therefore, the use of such areas does not by right
belong to the real property owner, which may result in encumbrances on a property’s use and enjoyment.
Metaphorically speaking, it can be said that if real property were an apple, the owner of such would have title
only to the skin, and the authority to carry out construction on such skin would be subject to the limitations
contained in Mexican property law, including local regulations. This means that ownership of subsurface
materials, such as minerals, petroleum and water belong to Mexico, and are regulated by special laws such as the
Mining Law and National Water Law, which means that the use of such requires governmental approval. This is
clear except in the case of petroleum, which is reserved to the Mexican federal government. Furthermore, another
aspect to consider is the variety that exists with respect to specialized public registries in areas that may limit
ownership rights, such as: (i) The Public Registry of Property (state or municipal) corresponding to the location
of the real property, for the various legal acts that are recorded in such registries; (ii) the Public Registry of
Federal Property, with respect to aspects related to the possible overlap with federally owned properties; (iii) the
Public Registry of Mining, related to authorizations granted to use of the subsoil; (iv) the Public Registry of
Water Rights, with respect to federal land zones and related authorizations; (v) the National Agrarian Registry,
with respect to the origin of an ejido property (communal land) or possible overlaps with ejidos and indigenous
communities; and (v) the Mexican Aeronautical Registry, with respect to airports and height limitations for
construction due to the proximity to airports; among other registries and matters for review. In Mexico, there is
no public registry that consolidates the information of all registries that could possibly affect real estate projects,
nor are there common standards on how to maintain such registrations. As a result, it is necessary to evaluate
each project separately and determine which searches need to be conducted.