The “Notario” and the Real Estate Transaction
You’ve found the perfect place to purchase in Bahía de Banderas. Now, meet your Notario. Although the translation of “Notario” is “notary public,” the Notario in Latin American countries has a very different role than the notary in the United States or Canada, who authorizes signatures.
The Mexican Notario is an attorney, at least 35 years old, who has practiced in a notary’s at least three years, passed a stringent examination, and has been appointed as a Notario by the governor of the state in which he is practicing. (There is supposed to be one Notario for every 30,000 inhabitants.) The Notario has the power to witness and certify documents that require absolute authenticity and handles wills and business contracts, as well as real estate matters. In addition, the Notario has the responsibility for the management and storage of original documents.
Although the Notario is a lawyer and generally selected and paid for by the buyer, the Notario won’t function as your attorney in the real estate transaction. Rather, the notary is responsible for being neutral and fair to all parties and he cannot advise anyone involved in a transaction for which he is acting as notary. Accordingly, if you wish legal representation in a real estate matter, you’ll need to hire your own attorney.
Under Mexican law, the deed to property must be prepared by a Notario, who will ensure that all documentation and permits are in order and that there are no liens or judgments against the property, so that the transaction can proceed. He will also calculate the seller’s capital gains taxes and the buyer’s acquisition taxes. In short, everything official to do with your transaction should be done by the Notario.
Because of the responsibility and potential liability the Notario may incur, notary fees are significantly greater in Mexico than those of notaries in the USA and Canada. These fees are based on a rate schedule set by an official commission and are tied to the amount declared in the property transfer and are about 1.5% of the transaction value. There is also the 15% I.V.A. to be paid on the services.
Your real estate agent or lawyer may suggest the Notario with whom he usually works, or you may solicit references from people who already own in Mexico. Fees can vary because of the “service” component of the charge, so a few telephone calls may be in order, most Notarios speaking English. Find someone you’re comfortable with because you may be calling on him again for other matters.
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