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Notaries and Utility Bills in Mexico Real Estate Closings

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Beachfront property in Puerto Vallarta, Mexico
Credit: Harriet Murray

In Mexico real estate closings, the notary is required to adequately identify the sellers and to be sure that the property taxes, bank trust and condominium fees (if applicable) and water bill are paid and current at closing.

The notary is not required to be sure the electric or other utilities (except water) are paid. These other utilities will not be mentioned if you don’t have the right representation, as chances are you will assume this will be no problem and can easily be handled later. To think this is to be very wrong.

Your real estate agent or attorney should explain to you the utility change procedure. No new buyer wants to pay or have to find the former seller to pay a large electric or phone bill before he/she can have the service put into his/her name. But this can happen, and it does.

The utility bills should be paid through the day of closing by the seller. He/she should furnish you with a bill and receipt of payment for especially the electric and telephone. In some cases, the notary will keep original bills of the seller, so you may have to accept a copy of the last paid bill. Why do you need these last paid bills? To prove they are paid.

Sellers usually transfer the utility accounts (especially CFE electric and telephone) at closing. To transfer, you will need proof of the account (the utility bill) as well as a letter signed by seller with his/her ID, requesting the utility company to transfer the account into your name. The best and sometimes only time to get this letter signed and the ID is at the closing table.

After closing, when the bill comes due, you will pay it and then decide if you keep the account or apply for a new one. Some buyers have decided to open new accounts, because for the time-being, CFE does not keep the same plateau for wattage use, so the new owner establishes his own usage and pricing level This handling of utilities may seem like an obvious and easy task as part of closing, but most of the procedure will be unfamiliar to you.

Lack of attention to paying and setting up transfer of the utilities can result in problems later and leave a bad taste in your mouth.  Be aware and make sure these steps are handled at closing and you will be very glad afterwards.

Many sellers and buyers are not going to be in Mexico when the utilities need to be transferred and whomever will be doing this for you cannot easily get the paid receipts, account number, or IDs of the seller to take care of the transfer for you.

A note: CFE or the electric state-mandated monopoly requires a copy of the registered transaction from the public registry. The current time for you to pick up the recorded escritura (deed) back from the public registry is 6 months.

This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his/her own due diligence and review.

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