Baja California Real Estate Law

Moving fast towards transparency and certainty.

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In Mexico the main trend is towards transparency and regulations and more and more people now prefer using the services of a registered real estate agent.

Already 6 states in the country have a real estate regulatory law in place, Baja California being one of them.

The new state law aims towards enforcing actions to prevent fraud and generate certainty on every real estate business transaction.

The law is complex but it will be gradually enforced to formalize the activities of the sector in the state markets. It is critically advisable to only buy from a trained and licensed agent or corporation.

The real estate license has to be renewed to ensure agent proficiency. The new law also aims at making sure the taxes are properly handled within the country economy.

Currently is the best time for agents to register since the law is still pretty flexible, at a later time the requisites to get such registration will be far more complicated.

There are registrations for both individuals and agencies.

The law aims at having agents that understand the Mexican law. If you are a corporation the license procedure has to be followed by both the corporation and its legal representative.

You get a registration for the corporation and the license for the agents. Whomever works as an agent for the corporation must be licensed.

Individual agents working for corporations cannot release contracts as individuals during transactions.

This law is in existence since 2014 and enforceable since then, but penalties have been gradually  applied.

Mexican notaries are one of the key filters that will prevent fraudulent transactions.

Chapter 4 of the law contemplates the possibility of denouncing illegal practices to confront agents breaking the rules or committing fraud.

Chapter 6 contemplates all public notaries will refuse to make any registrations if done by unlicensed agents or corporations.

Chapter 9 covers the fact that only registered and licensed individuals can advertise or promote as business providers.

Currently the law is in a state of flexibility but eventually will be fully enforced. Each License has a life of 3 years after which period has to be renewed.

The organism in charge of guiding the Baja California real estate law is the Mixed Commission which starts activities later next year.

From 300 currently active agents in Baja California, 150 have already registered.

Corporations and agents need to ensure their mission statement is in line with their professional activities before the Mexican Tax Agency. All data will be validated by Sedeco [State Economy Secretariat\ with regular inspection visits.

There are 16 agents and corporations currently registered from San Felpe at Sedeco

It is crucial for real estate professionals to be able to identify the right kind of contract to be used on each real estate transaction. Penalties under this law are bolder and include monetary fees, permanent termination of licenses and registrations and or jail.

Once the Mixed Commission is installed the different aspects of this law will start being applied in full, meaning the legal.loopholes will no longer be active.

Also all the benefits of this law will start permeating through all real estate business activities since bringing legal certainty is the main goal of this law.

The Mixed Commission will be creating policy that sustains a proper and healthy business environment preventing fraud and promoting transparency, this involves the creation of a code of ethics.

The place to start a real estate business registration for agents and corporations is: www.bajacalifornia.gob/sedeco.

This information was provided in an excellent presentation done by the C.P. Claudia Limón López from SEDECO [Baja California Economic Development Secretariat] for AMPI – San Felipe.

Special thanks to Jesús Manuel Carrillo, Juan Carlos Maciel, Darryl McDonogh, Giovanni B. Abatt, Uria Amor, Patty Bell, Ervey Franco, Jim Moore, Patricia Haros and all the team at AMPI – San Felipe.