Master Trusts vs Individual Trusts —
You May Not Own What You Think

This is one of the least discussed and most damaging ownership structures in Cabo real estate. It is also one of the most common in large condominium developments sold to foreign buyers. Understanding the difference between a master trust and an individual fideicomiso can determine whether you truly own your property — or whether the developer does.

How a Master Trust Works

A developer acquires land and sets up a single fideicomiso — a Master Trust — covering the entire development. The developer is the named beneficiary of that trust. When individual units are sold, buyers receive a contractual right to use and occupy their specific unit, often described as a "sub-trust interest" or a "beneficial interest" in the master fideicomiso.

On paper, this may look like ownership. In practice, the developer's name remains on the trust. The developer controls the title. And when you want to sell your unit, the developer must participate in the transfer.

The Problem Appears When You Try to Sell

Buyers often discover the master trust problem not when they purchase — when everything seems fine — but when they try to sell, years later. At that point, they learn that the developer must countersign the title transfer. And the developer, now in a position of leverage, may impose conditions.

Common scenarios we have seen and heard about directly:

Transfer fees demanded. Some developers charge 5% to 10% of the sale price as a "transfer fee" to release the unit from the master trust into an individual fideicomiso for the buyer. This fee was never disclosed at the time of purchase.

Developer is unresponsive or out of business. If the original developer is no longer operating, you may have no clear counterparty to coordinate a title transfer with. This creates a property that is practically unsellable until the situation is resolved legally — which can take years and significant attorney fees.

Disputes about unit boundaries or specifications. In a master trust, unit boundaries and specifications exist only in the contractual documents, not in an individually registered deed. Disputes about what is included in the sale require cooperation from the trustee — the developer — who may or may not be cooperative.

What an Individual Fideicomiso Looks Like

An individual fideicomiso names you — or your entity — as the beneficiary of a trust holding title to your specific unit. A reputable Mexican bank is the trustee. The title document (escritura) references your specific unit and the trust. There is no developer intermediary.

When you want to sell, the buyer establishes their own fideicomiso, your attorney and their attorney coordinate the transfer, and the notario records the new trust. The developer is not in the room. The transaction is clean.

How to Verify Before You Buy

Ask your attorney to pull the current title and trust documents before you sign anything. The key questions: Is the title held in an individual trust with you as beneficiary, or in a master trust with the developer as beneficiary? If a master trust exists, what are the developer's rights and fees in a transfer? Has the regime been incorporated so that individual deeds can be issued?

If a property is still in a master trust and the regime has not been incorporated, you are taking on title risk that may not resolve for years. Factor that into your decision — or walk away and find a property with clean individual title.