Realtors in Mexico’s popular Riviera Maya say last week’s seizure of 16 beachfront resort properties in Tulum underscores the greater protection afforded to foreign investors when they purchase property through formal legal channels involving a bank trust, known as a fideocomiso. Canadian and American landholders have further protection under the North American Free Trade Agreement (NAFTA), provided the property has been purchased legally.

The State of Quintana Roo confiscated the Tulum properties on the grounds that the owners had breached oral lease contracts — a claim the now dispossessed hotel, restaurant and shop proprietors dispute. A blog post on the fair trade website, Boutique Mexico, reports the expropriated vicinity has been rezoned for high-density development, while a follow-up advisory from Riviera Maya Property Consultants observes “this is not the first time properties are seized in the beachfront zone of Tulum”.

The advisory delivers a timely reminder that there are only two recognized means for foreigners to purchase land within 50 kilometres of Mexico’s coastline or 100 kilometres of its international borders. Would-be investors can either establish a Mexican corporation or act via a fideocomiso, which will hold the deed in trust for the client.

“The client maintains complete control over the trust, and may sell, lease, mortgage and pass the property on to heirs,” the advisory explains. “When land is purchased following legal procedures, through a fideocomiso with a lawyer and a trusted agent, it becomes virtually impossible for anyone, government included, to dispossess the land.”