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Usually, a mortgage is signed for the amount the buyer left unpaid. However, this has serious implications for both parties. Therefore, the Contract provides the same effects without the secondary effects of a mortgage.

Parties:

  1. Trustee- the owner that has intentions of selling (seller). The person that transfers property of patrimony to a trust.
  2. Fiduciary- third party responsible for the property during the time the Contract is valid. A bank, or trusted third party. This person has a restricted right of property and is destined to obtain the purpose established in the Contract (transfer of property at the time it is cancelled). A trusted third party that has a property registered in his name for the period of time the Contract is valid. The fiduciary`s main duty is the administration of the trustee`s property. The obligations of the fiduciary are:
    • To be neutral and impartial.
    • To follow the instructions established in the Contract.
    • To provide feedback.
    • To not use the property, the property is unavailable for sale, mortgage or embargo.
  3. Beneficiary- the buyer. The person for who the Contract is prepared. The fiduciary has the obligation to give the beneficiary the property as established in the Contract.

Autonomous Patrimony

  1. Separate from any other type of patrimony.
  2. Cannot be seized or taken to court even in the case of bankruptcy.
  3. During the time the Contract is valid, the trust would become the owner of the property.

Benefits

  1. Avoids the creditor a tiresome court process of traditional guarantees if the debtor fails to comply with the Contract.
  2. It is established beforehand that all conflicts be resolved by arbitration in case of disagreements.
  3. Exemption from paying registration rights and taxes while the property is held by the trust or is returned to the trustee.