What is surface rights and how does it apply to real estate investments in Mexico?
Real estate ownership typically involves owning both the land and what is built on it.
However, there is a legal concept that allows us to separate these two realities: the right of surface.
Understanding what surface rights are and how they apply to real estate investments in Mexico is key to exploring less conventional but potentially useful investment structures.
This blog explores the concept of Surface Mexico and its relevance to the Mexican real estate market.
You'll learn what these real estate rights in Mexico entail and how they manifest themselves in legal practice.
Table of Contents
What is Surface Rights? General Concept
The right of surface is a real right that allows a person to have or acquire ownership of buildings or vegetation on land owned by another person.
It is, in essence, the separation of land ownership and flight (what is built above).
The surface owner (who has the right of surface) is the owner of the building or plantation, but not of the underlying soil.
This right usually has a specific duration and grants the surface owner the powers over the use of the land necessary to maintain his ownership of the surface.
It is a concept recognized in various legal systems, particularly in civil law, which breaks with the classic principle that ownership of land automatically includes what is on it.
Recognition and Application of the Surface Mexico
In Mexico, the concept of surface rights, as regulated autonomously and explicitly in other countries, is not treated uniformly and generally across all state civil codes as a typical property right.
However, legal effects similar to the Surface Mexico are achieved through other legal and contractual figures:
Long-Term Lease Agreements with Right to Build
It is the most common way to put into practice the possibility of building on foreign land in Mexico.
Through a very long-term lease (for example, 50 years), the owner of the land (lessor) grants the lessee the right and authority to build on the land and operate it for the duration of the lease (linking to real estate purchase and sale contracts in Mexico).
At the end of the term, ownership of the construction reverts to the owner of the land, unless otherwise agreed.
Administrative Concessions
On public lands (federal, state, municipal), the government can grant concessions that allow private individuals to build and operate infrastructure or developments for a specified period of time.
Here, too, ownership of land (which remains public) is separated from ownership or the right to exploit buildings.
Figures within Complex Trusts
Through a trust (Mexican real estate trust for foreigners), rights of use and exploitation can be structured over land and buildings, assigning different rights to different beneficiaries or over time, achieving effects similar to a separation of ownership.
Difference between Surface Area in Mexico and Full Ownership
The main difference lies in the scope of the right.
Full ownership confers complete ownership over an asset, including both the land and everything permanently attached to it (by the principle of accession).
The Surface Mexico (or similar figures) grants rights limited in time and scope.
You own the building or plantation, not the land.
At the end of the term, the right to the surface expires, and the construction reverts to the owner of the land, unless otherwise agreed.
Application for Real Estate Investments in Mexico
The use of structures that allow for the separation of land and air property can be attractive for real estate investment in Mexico in certain scenarios:
– Reduction of Initial Costs: Investment is made in construction without the high cost of acquiring the entire land (linking to Luxury QR land legal aspects).
– Access to Strategic Locations: Allows for the development of projects in privileged areas where land acquisition is not feasible or prohibitive (e.g., federal zones, concessions).
– Fixed-Term Projects: Ideal for investment projects with a clear time horizon (e.g., temporary tourism developments on concessioned land).
– Financing Structures: Can facilitate certain financing structures where the security falls on construction or leasing rights.
A lawyer A legal investment structures specialist in Mexico can determine if this strategy is viable for your project.
Risks and Considerations when Investing under this Regime
Investing through structures similar to Superficie Mexico carries risks that must be evaluated:
– Limited Term: The right to the surface is limited to the term of the contract or concession.
– Reversion of Construction: Upon completion, ownership of the construction reverts to the owner of the land, unless otherwise agreed (which is negotiable).
– Dependence on the Landowner: The investment is tied to the contract with the landowner or the authority granting the concession.
– Legal and Contractual Complexity: Requires highly detailed contracts that address various situations (early termination, insurance, final disposal of construction).
– Financing: Obtaining financing to build on someone else’s land can be more complex.
A thorough due diligence (linking to research of properties for sale) and contractual review are essential.
Key Legal Aspects to Review (in Surface Mexico)
By considering an investment under a structure similar to the Surface Mexico, your specialist lawyer You should review in detail:
– The validity and term of the lease or concession agreement.
– The express powers to construct and operate the construction.
– The possibility of registering this right in the Public Property Registry, if local laws allow it (linking to deed of sale).
– Clauses on the disposition of the construction at the end of the term.
– Tax aspects related to land ownership vs. construction (linking to fiscal invest mx).
– Applicable land use and construction regulations (linking to zoning land use real estate investment Quintana Roo).
The Role of the Real Estate Lawyer
Since the concept of surface rights is not as standardized as full ownership, the advice of a lawyer specializing in real estate law with experience in the legal regime of surface law in Mexico and complex contractual structures is essential (linking to QR lawyer).
A lawyer It will help you understand the scope and limitations of the rights you are acquiring, negotiate contractual clauses that protect your investment, and ensure that the legal structure you choose is viable and secure.
The Surface Mexico, an Option with its Particularities
Surface rights, or legal concepts that achieve a similar effect in Surface Mexico, represent an alternative to full ownership in certain real estate investments in Mexico.
It allows for the separation of land and air ownership and can be useful for specific projects or for accessing high-value land without its full acquisition.
However, it is a complex structure that requires meticulous legal documentation and carries particular risks.
Real estate investment in surface law requires a thorough understanding of the applicable legal regime.
To assess whether a structure that separates land ownership and construction is suitable for your project in Mexico and to navigate its complexities, the advice of a lawyer specializing in real estate law it is essential.
Protect your investment with expert legal guidance. Book your legal advice today.
