American Buys Baja Land in Fee Simple
A historic first, but don’t try this yourself!
BY NANCY CONROY
Published: Gringo Gazette Tue, 16-Aug-2005

 
Mark Morgan, an American real estate investor, is the first foreigner in history to receive a Baja California property title in fee simple. Under Mexican law, foreigners purchasing real estate within the restricted zone must own the property through a bank trust. Fee simple, which means full and complete ownership vested in the buyer’s name, is reserved for Mexican nationals. This restriction applies to any property located within 50 miles from the border, or within 100 miles from any coastline. Thus, practically the entire Baja California peninsula falls within this restricted area and foreigners must buy using a trust. In the interior of Mexico, far away from the coastal areas and outside of the restricted zone, foreigners do buy property in fee simple. In Baja however, every responsible real estate agent will advise purchasers to use a bank trust, and this is the correct advice for everyone.
Morgan, however, was the first American to actually look at a map of Baja, and calculate exactly where the restricted zone falls. If one takes a ruler and a detailed map, there is a tiny triangle of land located in the middle of the peninsula that is outside of the restricted zone. This land is dry mountain brush land and farmland located out past Ojos Negros in Trinidad Valley. The nearest villages are Heroes of the Independence and San Mateos. Much of this triangle is ejido property, and much of it is national property belonging to the Mexican government, neither of which are purchasable. But, there are a few private landowners in that region, and Morgan successfully closed on a land purchase of 100 hectares.
To complete the deal, Morgan had to conduct a land survey to prove that the area was outside of the restricted zone. He sent this survey to the Foreign Relations Secretary in Mexico City, and obtained a special authorization to buy the land in fee simple. When Morgan attempted to register his purchase, he encountered resistance from several notaries and attorneys in Ensenada who refused to handle the deal. The belief that all of Baja California falls within the restricted zone is a “very cherished myth”, said Morgan. He only needed an FM-T tourist visa to complete the purchase, and he now has all land rights just like a Mexican national. He has obtained preliminary approval from First American title insurance, and intends to begin selling 50 acre ranch lots from $20K in fee simple.
Real estate buyers are cautioned not to attempt this type of deal themselves, since this is a complicated maneuver only for sophisticated buyers. Real estate in Baja must be purchased through a trust, and Morgan’s incredible fee simple land purchase only applies to a tiny area in the interior of the state.