HSBC Trust Office Closes in Los Cabos
By: Cheryl MIller, Broker, Baja Realty and investment
As of Friday April 28, 2017, the local offices of the HSBC TRUST DIVISION of Los Cabos closed its doors for the last and final time.
All Trust matters previously handled in this local office are being transferred to offices in either Guadalajara or Mexico City, and as of that Friday afternoon, no one knows what file is going where.
Now, for those of you with an HSBC Trust and you are not in a real estate transaction or soliciting a change of beneficiary or reporting a death of a beneficiary, most this will not affect you except for that perhaps the convenience of paying your annual trust fees locally may be affected. So, no worries.
But for those of you in the midst of a transaction or change of your trust….hold onto your hats, it’s going to be a bumpy ride!
A few years ago, HSBC decided it did not want to be in the trust business any longer and stopped accepting new trusts or renewing old trusts. They assigned a small staff here in Los Cabos to handle the other actions that may take place on a trust, such as cancelling a trust, change of beneficiaries, or handling deaths of the primary beneficiaries. However, since HSBC’s decision, these “other actions” have been a source of delays and stress for property owners, potential buyers, closing agents and real estate agents. Delays have been the norm with HSBC, and it was not uncommon that such action would take 4 months to a year to accomplish, which resulted in delaying sales for an equal amount of time, causing the demise of some sales and an incalculable amount of stress for everyone involved.
Now that HSBC has closed this office it may be weeks or months before each file is reassigned, and weeks or months before any action is taken on these files.
So, you ask, “If HSBC does not want to be in the TRUST business, why don’t they sell their packet of Trusts to another Bank who is interested in being in the trust business?” Well, over the years, this exact strategy has come up with different interested banks, to no avail. HSBC has not sold their “lot of trusts” and are therefore, they are still in control.
So, why don’t these trust banks (HSBC is not the only slow bank) have regulations and time limits to perform tasks? That is a GREAT question. But, there are no time commitments written into trusts (fideicomisos) nor are there any laws regarding performance of the bank with regard to particular actions needed vis a vis time limits. In short, a Trust Bank can choose to be as fast or as slow as they want, without legal ramifications.
But, there can be financial ramifications for HSBC. We can, as consumers can decide to choose banks that are currently responding and servicing their customers in a professional and timely manner. (But, please note, some of the very banks that are currently slow, were once sterling examples and pinnacles of customer service. There is no guarantee that in 10 years your trust bank will not become one of the stop-plugs in the system.)
If you are selling, and you are a current HSBC Trust holder…talk to your agent. Maybe a substitution of banks should be considered as a sales strategy and start it right away. Not every buyer is willing to wait an additional 4 months to a year to take possession of your property. You may lose a sale or two. But, that is a personal decision. Consult your real estate agent, Notario and tax consultant first. Some real estate offices have made it company policy NOT to list properties in HSBC trusts. Why? Believe it or not, the amount of coordination when dealing with an HSBC is exponentially higher than other more responsive banks. And, if your real estate agent brings you an accepted offer that subsequently is cancelled due to unknown and unreasonable delays, they have performed their work without compensation.
In short, there is nothing your realtor can do to expedite the process. Nothing your closing agent can do. Nothing to be done legally regarding HSBC’s lack of timely responses and approvals. Nothing to be done to ensure a swift resolution or to predict a closing date. So, if you are holder of an HSBC Trust, be aware that eventually, when you sell, you will be affected. The choice to remain with HSBC is your call.
By Cheryl T. Miller, Broker, Baja Realty and Investment, firstname.lastname@example.org, 624-122-2690. Cheryl is the broker of Baja Realty and Investment, a 14 year veteran of Mexican Real Estate and an architect. Call her for any of your real estate needs.