Association for Public Policy Analysis & Management

Residential property markets in Mexico are plagued with “clouded titles”. As a result, they do not have the liquidity that they might have. In Mexico, making a will is not very common, and hardly one in ten of those who are entitled to make a will, do so. This means that a high percentage of houses in the urban areas of the country have “clouded titles”, as they are handed on informally from one generation to the next. Making a will is not expensive, nor time consuming, but proving a will is both. In this paper it is suggested that to address this situation, certain decisive steps should be taken by policy makers. Judicial procedures would no longer be used to pass on inherited property to heirs except in cases of conflict. Instead, an administrative procedure might be followed, that would simply require designation of the heirs in the title of the property. These small changes if introduced in all states will have a great impact on residential property markets in Mexico.