BajaNomad - How does land leasing work in Baja?

How does land leasing work in Baja?

Bajayan - 12-28-2014 at 01:21 PM

Does anyone know the particulars of leasing land in Baja? Specifically from a corporation with clear title? Are there time limits, can it be structured to be perpetually renewable, or renewable for 50 or 100 years if the use meets a certain condition? Anything else one should know?

There is land potentially available for lease, and the intent would be to build on it. Anyone building on it would of course want their structures to be protected by the lease for a long time, while the owners want to make sure the land is being used within certain usage based guidelines or else they'd want to end the lease. Do the laws allow for both sides to be fairly protected?

DENNIS - 12-28-2014 at 01:32 PM

Nothing renewable, no matter what anyone says. A lease can be written for no longer than ten years...minus one day. After that it's up to the parties to renew. Nothing other than that is enforceable in court.
For the protections you seek, you should probably hire an attorney who will write a binding lease and take it to a Notario.

Also...you should ask your attorney who your new structures belong to at lease end. And, don't hire the landlords nephew if he claims to be an attorney.

.

[Edited on 12-28-2014 by DENNIS]

Bajayan - 12-28-2014 at 01:45 PM

So there really cannot be any guarantee on a permanent building beyond ten years?

MMc - 12-28-2014 at 02:27 PM

First rule of buying or leasing land in Mexico, never spend more then you can walk away from. Second rule live where you want for six months so you can get the lay of the land. I have had 2 places in Baja Norte, both on leases, they are the perfect way to lose it all, (see first rule). I would do again too.

DENNIS - 12-28-2014 at 02:40 PM

Quote: Originally posted by Bajayan

So there really cannot be any guarantee on a permanent building beyond ten years?

None that I'm aware of. It's possible corporations may be held to different regulations in the interest of promoting investment, but until you form a corporation, the ten year rule applies.
Be very careful when you are approached with an alternate plan as you probably will be.
Again...as I mentioned above...get an attorney, and be very careful of his/her connections. Blood is thicker than most anything down here.
Also...avoid real estate agents. They lie and play by their own rules.

bajaguy - 12-28-2014 at 03:19 PM

Why would you spend your money building a house on property you don't own or control??? Rent......you will be happier

Quote: Originally posted by Bajayan

So there really cannot be any guarantee on a permanent building beyond ten years?

Bajayan - 12-28-2014 at 03:32 PM

Hmm, so anyone know more about whether corporations can lease for over 10 years?

If that's a possibility, then I could work out the other issues raised here...

[Edited on 12-28-2014 by Bajayan]

yellowklr - 12-28-2014 at 05:17 PM

DONT do it
unless you have a structure you can take with u

woody with a view - 12-28-2014 at 05:24 PM

have hitch, will travel! :light:

MMc - 12-28-2014 at 05:58 PM

Building on a lease is the perfect way to lose your investment. If you can't take it with you, You could very easily lose the building or get paid a fraction of what is worth at the end of the lease. Go rent where you want to build and get the lay of the land. You way very well trust the owner, what happens when he dies and you are dealing with the kids?

DENNIS - 12-28-2014 at 07:05 PM

Bajayan.......I think you're bound and determined to do what you want to do here.
Best of luck in your adventure.

.

[Edited on 12-29-2014 by DENNIS]

DianaT - 12-28-2014 at 07:28 PM

Quote: Originally posted by DENNIS

Bajayan.......I think you're bound and determined to do what you want to do here.
Best of luck in your adventure.

.

[Edited on 12-29-2014 by DENNIS]

Yes, --- welcome to the forum and good luck. I hope it works for you.

Bajayan - 12-28-2014 at 09:49 PM

I do actually appreciate the warnings and general advice, but I would also really appreciate if anyone knew what the laws are regarding leasing terms from a corporation.

I'd only be interested in looking further into this if the legal situation made sense, and if 10 years is the maximum for leasing land from a corporation, I can't really see a way in which it would make sense.

[Edited on 12-30-2014 by Bajayan]

How does land leasing work in Baja?

durrelllrobert - 12-30-2014 at 10:46 AM

I'll let you know in July when my 10th year of leasing ends. :?:

DENNIS - 12-30-2014 at 11:08 AM

Quote: Originally posted by Bajayan

I'd only be interested in looking further into this if the legal situation made sense, and if 10 years is the maximum for leasing land from a corporation, I can't really see a way in which it would make sense.

[Edited on 12-30-2014 by Bajayan]

The issue mentioned wasn't "leasing FROM a corporation." It was leasing FOR a corporation for business purposes.

Sweetwater - 12-30-2014 at 07:04 PM

Quote: Originally posted by Bajayan

I do actually appreciate the warnings and general advice, but I would also really appreciate if anyone knew what the laws are regarding leasing terms from a corporation.

I'd only be interested in looking further into this if the legal situation made sense, and if 10 years is the maximum for leasing land from a corporation, I can't really see a way in which it would make sense.

[Edited on 12-30-2014 by Bajayan]

It seems you've gotten information that you don't really want....and very often folks tend to go into denial and do what they want anyway. I think Dennis has given you the information, not much left except to also wish you good luck.

Bajayan - 12-30-2014 at 09:08 PM

Hi Dennis - actually my question starting with my original post has been specifically about leasing "from" a corporation. It sounds like there's a strict 10 year limit on leasing from an individual (natural person), and it seems likely to be the same for leasing from a corporation, but just hoping someone might know for certain. Perhaps you know if there's any difference?

Hi Sweetwater - thanks for the kind wishes. Trust me I won't go into denial, I just think there's a finer point of law I want to clarify if possible.

Durrelllwater, what can I say except good luck!

CaboMagic - 12-31-2014 at 08:54 AM

Bajayan - welcome to the forum. I don't know 'the' only answer to your question .. I do know however, that 'an' answer - can/will change depending upon (And not just not limited to the following) (1) Where said land leasing might be taking place and (2) From whom (be it individual or corporation.) Because when a family member dies, other family members may fight about 'their land' and what ensues has the potential to take everything 'you' may have on said parcel .. this being just one possible scenario of course. You may have a wonderful experience - these things can/do happen as well. As an example, ejido property often has layers of issues ...

Lots of regular posters on this and any other 'Mexico' forum often say "Don't invest more than you can afford to walk away from" This is a frighteningly true statement. Some cant afford to walk away, and thus become stuck.

From experience with 'legal issues' in Mexico (Cabo) almost nothing makes sense - and for us, those finer points of law translated to 'more dinero to research that .. present that .. respond to. The level of inconsistencies, scrambled system of 'next' (mordida) can be (was) mind-blowing. Days became years in the blink of an eye.

Not to dissuade you from your undertaking, as I am a firm believer that dreams can and do come true - just fair warning that things are not be as they seem, and once 'in' it may be extremely difficult to get 'out' of legal issue quicksand ..

Whatever you do, thanks in advance for continuing to post on this forum. Many 'lurk' for due diligence and can benefit from the experience sharing that you do.

Peace, love and definitely fresh fish tacos for all. LG

DENNIS - 12-31-2014 at 10:06 AM

Bajayan.....I hesitate to answer your question only because interpretation of the law down here can have many variables.
That said....I again suggest consulting an attorney. Just find one you think you can trust. That can be a whole other can of worms.

Would you mind giving us a few more details, such as area.....your purposes with the land, and most important, is an ejido involved in any way? It may prompt some insight from other Nomads which you could use.

Bajayan - 12-31-2014 at 09:40 PM

Thanks Dennis and CaboMagic, I will speak to a lawyer (or notary?) on my next trip, which I hope to make soon. If this is still on the table at that time.

There is no ejido involved in any way. As I said, there is clear title, held by a corporation, and this specific land is in Bahia San Quintin.

DENNIS - 1-1-2015 at 07:18 AM

Por nada, Bajayan.
Since San Quintin is your destination, I suggest going on the TalkBaja facebook site and put your question up there. One of the admins is a resident of la Chorera and is a good source of info for San Quintin. He goes by Ron Gomez on the site [Baja Gringo here].

Best of luck on your trip.

.

[Edited on 1-1-2015 by DENNIS]

Bajayan - 1-1-2015 at 08:29 AM

Thanks Dennis, I hadn't thought to look on Facebook (which I typically avoid to be honest). I do have some interest in one or two other spots as well, but it seems the group is pretty widespread which is quite helpful. Happy New Year!

Pescador - 1-1-2015 at 09:00 AM

I talked to our Notario and he says it makes no difference whether you are leasing from an individual or a corporation, the law only allows, as Dennis stated, 10 years minus one day. There are other contracts written such as an automatically renewable lease, but it holds no water in court, which is the final authority. Your only true protection comes from a Fideocomiso.

Bajayan - 1-2-2015 at 10:22 PM

Thanks a lot Pescador, that finally completed the answer to my question.

It's unfortunate that lease terms are so restricted as to make them unworkable for building, but there's nothing we can do about it.

willardguy - 1-2-2015 at 10:57 PM

folks have and will continue to build on leased land, MOST have no problems and have enjoyed their places for years. sure theres no guarantees but if you lease from people you know and trust, I say go for it!

Dirtroaddoug - 1-3-2015 at 01:02 AM

"F I D E I C O M I S O"

CaboMagic - 1-4-2015 at 10:09 AM

Bajayan - don't know where you 'originate' .. but wanted to make mention that an Attorney in MX is not the same as Attorney in USA .. And, a Notary in USA is not what a Notario is ... HTH

Warf - 1-5-2015 at 09:25 PM

I recommend that you contact Jonathan Mendez in Col Vicente Guerrero. (http://www.sanquintinm2.com/en/business-consulting).
He is well connected in the municipality of Ensenada (which extends south to Guerrero Negro) and has excellent relationships with several Nortarios in Ensenada as well as the new Notario in San Quintin.
I know him personally and he is knowledgeable and absolutely honest. He has helped me in several business matters and his advice and assistance have resulted in successful legally binding transactions.

Bajayan - 1-6-2015 at 09:59 PM

Thanks CaboMagic, I am aware of the very different role notaries play in other countries (I'm in the US).

And thank you as well Warf, I met with Jonathan last year and he seemed great, so I'm very happy to hear a confirmation.

Willardguy, if this was just for a little cabana, I might just be okay with that.

And Dirtroaddoug, you're right that the fideicomiso is the only guarantee (or a corporation).

durrelllrobert - 1-7-2015 at 08:42 AM

On the east coast and even in the SF bay area lease hold properties are not uncommon. Typically a developer builds houses for sale but retains ownership of the land below them for a fixed period of time. This allows first time buyers, or others with minimal money for a down payment to get into a new house for a lot less money.

CortezBlue - 1-7-2015 at 08:54 AM

How does land leasing work?

It either does or doesn't

In San Felipe I wouldn't hesitate to do a lease at Pete's Camp. I v'e known the owner for many years and he is a good guy.

Other than that, I think it is a crap shoot!