The real estate trust is the most robust structure for developing residential or mixed-use projects in Mexico. It separates the project's assets, protects buyers, and facilitates bank financing.
What Is a Real Estate Trust?
It is a contract by which the developer (settlor) transfers ownership of a property to a fiduciary institution (bank or brokerage), which administers it according to the contract's instructions for the benefit of buyers or investors (beneficiaries). The property temporarily leaves the developer's estate and is protected in the hands of the trustee.
Advantages for the Developer
- Access to financing: banks prefer to lend to trust-backed projects because the asset is protected and administration is transparent
- Risk separation: if the developer faces financial difficulties in other projects, the trust assets cannot be affected
- Greater buyer confidence: buyers know their payments go to a bank-controlled account, not directly to the developer
- Efficient pre-sale management: pre-sale funds are held in the trust and released in line with construction progress
Basic Trust Structure
A standard real estate trust has the following parties:
- Settlor (fideicomitente): the developer who contributes the property
- Trustee (fiduciaria): financial institution that administers the trust
- Beneficiaries (fideicomisarios): the buyers or investors
- Technical committee: governing body that authorizes fund disbursements
Costs and Timelines
Establishing a real estate trust involves structuring costs (attorney and trustee fees) and annual administration commissions. In the Bajío region, structuring costs range from $80,000 to $200,000 MXN depending on project complexity. The setup timeline is 4 to 8 weeks.