Buying a boat in Mexico

[exMaggieDrum]

We are looking at boats in Mexico to purchase. We have seen many times that buying a boat in Mexico can be illegal but I am not sure under what circumstances since I know people not from Mexico do it regularly. But the recent issues with a Mexican agency going around and impounding some boats with irregular (and in some cases in error because the papers were in order) has spooked some people - including us. One of the impounded boats was alleged to have been "illegally purchased" in Mexico by a foreigner.

A broker there has given assurances that a boat can be legally purchased from by a foreigner so long as the contract is executed outside of Mexico. First - is this true? Second - if so, does anything else have to be done to ensure it is a legal transaction per Mexican law? Such as taking the boat out of country right after. And also how is the TIP handled since the boat would already have one with the previous owners, and it would have been checked in with the local port captain, etc.

I believe that the broker would not give bad info on this as it is key to their business. But any experience or info on this would be greatly appreciated.

Joe

[Greenhand]

The broker is occupying a widely used gray area. By doing all the paper work in the US, they claim it isn't happening in Mexico.

It is one of those things that happens all the time, but I wouldn't get involved. Among other things, I see it as disrespectful to the host country, which already has enough problems with the rule of law.

[susswein]

I bought a boat in Mexico (from a fellow american) and what the broker told you is correct. You do all the paperwork for the sale "in" the US, then apply for a new TIP in your name. This is how it's done 99.999% of the time.

[exMaggieDrum]

I just got back from a meeting with a documentation/escrow servicer here. They handle USCG documentation paperwork, handling of funds for sell/purchase (escrows), check for liens/title, etc. They do a lot of work on boats purchases in Mexico. The said the process was:

1. Put down earnest money to hold the boat while you arrange a visit to and go see it. Requires a purchase agreement with the option of not buying based on sea trial or survey (or any reason).
2. Visit the boat/do survey and sea trial. If you don't want the boat, you get your earnest money back less fees to doc service and survey (and travel).
3. If you agree to buy, you put the balance of the purchase price in to the escrow account. The service holds it until the whole deal is done - USCG documentation (if American purchaser) or Canadian Registration, etc. Marina/broker/whatever fees are paid by whomever is supposed to pay them. Marina fees by seller or broker, etc. Survey by purchaser, etc.
4. The owner gives a "Captain's Letter" (in Spanish and English I would think) that authorizes you to use the boat until all the paperwork is done, esp. the USCG documentation which includes the official Bill of Sale.
5. The owner exports the boat from Mexico - checks out of the port & country and surrenders the TIP. The boat has now officially left Mexico.
6. The new owner imports the boat and gets a new TIP.
7. The documentation/escrow service finalizes all the paperwork and disburses the funds from escrow.

They recommend getting an agent in Mexico to handle the paperwork needed in Mexico - export/import, etc.

We bought our previous boat from a Canadian and did all the paperwork ourselves but there was concern about giving the earnest money to the seller with only a purchase agreement. We did the USCG paperwork and the seller de-listed it from the Canadian Registry (first). We did pay Washington state "sales/use" tax too. Some states may not require this?? We did not have to clear customs because the boat was moored in a US marina at the time of sale.

If we do go ahead with buying a boat in Mexico, I would still want to get more opinions about the process above. We have always respected the countries we visit although we found that not all other cruisers would do the same (e.g. checking in at official entry ports, etc.). If any part of the purchase would be illegal we would not do it. My understanding is that a sale of a USCG documented boat to a US citizen who also documents the boat is not a transaction that is illegal. Exporting and importing the boat is not meant to skirt any laws, and in fact, is meant to honor the laws with clarity.

But - any other thoughts/concerns would be great. Like I said we intend to be respectful of Mexican laws and customs. But like in the US - it not illegal to avoid taxes that are not required by law. We pay our taxes. Don't like to look over our shoulders about anything. It's enough to be worried about what Mother Nature can throw your way.

[synchronicity98]

Hi Joe,

We bought our boat in Mexico (San Carlos), through a broker, and it worked out pretty well all around.

It was very close to what you've described above -- we sent a 10% deposit to the escrow company in Delaware with our first offer, counter-offered and then settled on a price, sent the remaining $$ to the escrow company (they would send it back if we didn't end up buying the boat), flew down to look at the boat, surveyed & sea-trialled, settled on a price, signed the final paperwork with the broker & disbursed the money from escrow, got the Captain's letter, and went sailing.

The biggest plus was that was we were able to buy a great boat that was already outfitted (windvane, HAM/SSB, dinghy w 15hp outboard, etc) at a reasonable price, AND we were able to start cruising in the warm waters of Mexico (rather than Vancouver or Maine, where we're from) right away.

The issue that we had -- and NOBODY would help us with the answer on this, especially not the brokers -- was how to get our "entrada" papers for Mexico. We had the former owner's entrada, with his name, the boat's old name, etc on it -- but no paperwork to explain how we ended up with a boat in Mexico! Since the sale technically took place in Delaware (that's what the Bill of Sale says), we couldn't really figure out how to get an entrada. People suggested we go to the Port Captain and say we'd just "arrived" from San Diego... but we weren't keen on lying right to his face, especially since we were up in the Northern Sea of Cortez!

In the end, we bought our TIP online (with the boat's new name and our names on it), and we used that when we checked in with the local Port Captains. We cruised Mexico for 2 years and were almost always worried about a Port Captain asking for our entrada... but they never did. They were very happy to see our TIP and crew list and passports, and that was it.

Then this year, we left Mexico to sail south, and worried AGAIN that we'd be asked for our entrada when we went for our Zarpe (exit papers)... but we weren't asked. We just needed to show our last port's clearance and usual papers, and then we were issued our Zarpe, no problem.

Sorry to go on and on about this -- probably much more detail than you care to read -- but the point I wanted to make was that our lack of a legal entry paper was certainly a big stress to us, but in the end, was not a problem at all. The officials clearly know that boats are being bought & sold, and as another poster said, it's happening in that "grey zone".

Would I buy a boat in Mexico again? Absolutely. In a heartbeat.

Would I trust what brokers say? Nope, not even for a minute. I was sorely disappointed with the brokers -- they want to make a sale and don't care very much about what happens after that.

And would I stress too much about not having an entrada? Not if you've got your TIP and other paperwork in order, and stay honest when / if you're ever asked about the boat's entry to the country.

Just my two cents!!

Leah
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s/v BRIO
With Brio | Life is too short to say later. And winters suck.

[Celestialsailor]

Originally Posted by synchronicity98

Would I buy a boat in Mexico again? Absolutely. In a heartbeat.

Would I trust what brokers say? Nope, not even for a minute. I was sorely disappointed with the brokers -- they want to make a sale and don't care very much about what happens after that.



Leah
----------------------------------------------------------------------------------
s/v BRIO
With Brio | Life is too short to say later. And winters suck.

Just recently went to Guaymas to look at a boat in San carlos. I had told the broker there I wanted to see it, weeks in advanced. When I got to Guaymas, he was to busy to show it, claiming he had to go to the US. What pissed me off was he didn't even try to have another person show it.