Thursday, August 20, 2009

Smart Investors Hire Attorneys Before Buying in Mexico

Beachfront property and investment opportunities continue drawing American real estate buyers, mining companies and utility firms to Mexico.

But novices, unaware of local business practices and pitfalls, run the risk of getting caught up in a bad deal or a legal tangle.

Smart investors hire an attorney to review the soundness of a transaction before signing on the dotted line. Now, a cross-border company is helping businesses and individuals navigate their way -- legally -- through Mexican ventures.

"Nobody is looking out for the buyer (or investor) here in Mexico," said John C. Buette, END OF PAGE president of Icon Land Services Inc., which has offices in Tucson and Hermosillo. "We're trying to take care of the buyer."

Icon bills itself as an "intercontinental property acquisitions and marketing" firm that specializes in serving mining, comunications and utility companies seeking to operate in Mexico. Real estate transactions for individual homeowners and commercial clients is another specialty.

Buette, whose background is in negotiating land agreements for mining companies, manages the Tucson office. His partner, Ernesto Elias Elizondo, a bilingual Mexican attorney experienced in serving for eign clients in commercial and real estate transactions, runs the Hermosillo office.

Recently, Elias was hired by a group of Americans with vacation homes in the playa encanto real estate in las conchas rocky point to help them secure legal property rights.

Some of the homeowners "had been trying for 20 years to get land rights" only to find themselves mired in legal disputes and bureaucratic obstacles, said Al Ciasca, a Tucson resident who is the Playa Encanto Homeowners Association president. "Ernesto Elias made it possible for us to get through all the red tape."

Icon performed the tasks required for each homeowner to obtain a bank trust, the legal agreements that allows non-Mexican citizens to hold encanto beach front property in Mexico.

"I wouldn't know where to begin if I had to do this. They are qualified and geared up to provide the service," Ciasca said.

According to Buette, it's frustration with a lack of understanding of the Mexican way of doing business that leads many clients to Icon.

"There's a lot of people closing deals without doing 80 percent of what needs to be done and then they get into a mess and end up calling an attorney to say `fix this,' " he said.

Ideally, Icon hopes clients will seek their services at the outset.

Teck Resources, a U.S. subsidiary of a large Canadian mining company, has begun relying on Icon to secure the permits needed to extract precious metals and minerals from several mines in northern Mexico.

"Everything is done according to U.S. or Canadian standards as opposed to hit or miss with no follow through," said John Lunceford, regional manager for Teckin Northern Mexico. By working through Icon, Teck Resources found there was "not a lot of wasted time, effort and money."

The services offered by Icon cover a wide spectrum including setting up corporations, title searches, property appraisals, negotiating land rights, surveying property, digital mapping, aerial photography, acquiring enviromental permits and water rights.

Beyond the technological and legal services, Icon principals also help bridge the cultural gap between their clients and Mexican partners or officials.

Meetings with clients can be conducted in English or Spanish, as the client prefers, and copies of contracts and key documents translated into English are also offered.