ChollaHOADocs

The mysterious “Federal Zone” is actually a very simple part of the Ley General de Bienes Nacionales (general law of national goods). This law establishes a strip of land (Zona Federal Maritimo Terrestre) around the coast of the entire country reserved for the use of the Mexican government. It originally was intended to preserve the sea shore, acilitate military defense and faciliate maritime navigation. The ZOFEMAT (federal zone) measures 20 meters wide from the mean high tide back to the property lines. No one, Mexican citizen or foreigner can “own” the ZOFEMAT. However, a concession (permit) can be obtained for its use.

The Vecinos Board, as well as most local Realtors and lawyers have understood that in order to obtain a concession, you most own the adjacent property. In other words, if your Cholla property is on the water front, no one but YOU can get the concession and open a beach-front taco stand (for example) on the ZOFEMAT in front of your property. Recently, we have discovered that a third party has applied for and received approval for a concession on the ZOMEFAT despite the fact they do NOT own the adjacent property. The controversy is being reviewed and the Federal agency (SEMARNAT) that administers the ZOFEMAT currently is not accepting ANY APPLICATIONS for concessions. Your Vecinos Board advises Vecinos owning property adjacent to the ZOFEMAT to be prepared to apply for the concession as soon as we get word SEMARNAT is ready to begin accepting applications.

Our understanding is once a ZOFEMAT concession is granted, it is good for a set numbers of years (established through the application process), and there is no annual maintenance fee. The annual fees associated with the ZOFEMAT concession are assessed in the form of the ZOFEMAT taxes many owners currently pay. Those tax rates are based on the FEDERAL ZONE owner’s intended use of the property. However, paying those taxes does NOT constitute “having” the ZOFEMAT concession. The documents for the concession are, in fact a Federally signed, stamped and written authorization for use of the ZOFEMAT. It is a document, much like your Bank Trust, but is completely separate. SEMARNAT estimates the one-time application fee to be $2,500-$3,000USD. The good news is once granted, the concession can be transferred along with your trust to future owners and Realtors feel it increases the value of your ocean front property.

JOINus Magazine DECEMBER 2007

Recently I received a forwarded email from one of my clients in Las Conchas regarding the Federal Maritime Zone in Rocky Point.
The email stated that ALL beachfront properties MUST have a Federal Zone Concession — which legally is not true — as well as a number of other mis-statements of fact and law. As I read this email, I realized these mis-statements of fact and law — and the tone of the communication — could be rather alarming for homeowners with beachfront property.

The facts: The Federal Maritime Zone covers the entire coastline of Mexico, and extends 20 meters (60 feet) inland from the highest tide-line at any given location. No home or any other type of construction can be built within this protected 60 foot wide coastal reserve — unless it is a properly permitted industrial or commercial facility, which is not the case for those who own beachfront homes or lots.

A Concession — in American and Canadian terms, a permit — to use the Federal Zone may be granted to the owner of a beachfront property for the portion of the Zone adjacent to his/her property. This permit is granted by SEMARNAT (similar to the United States Environmental Protection Agency) and it is OPTIONAL for those owners that have lots adjacent to the Zone. If a property owner CHOOSES to apply for a Federal Zone Concession for their beachfront property they have priority to get it: no one can just put a taco stand or a wall in front of your property just because they decided to apply for a Concession!

When there are existing structures that encroach on the Federal Zone — or when the property owner wishes to build new structures — a Concession must be obtained, and there are fairly straightforward legal procedures do so. The granting of a Concession follows a process; is not granted immediately; usually takes several months; and — in rare cases — even years to be obtained.

When a property borders the Federal Zone it is subject to the Federal Zone Tax — which is not the same as the payment for the Concession annual fees: this is a Federal Tax. In the case of Rocky Point this tax is collected by the City because of a coordination agreement between Rocky Point, the State of Sonora, and Mexico’s federal government. The email stated that the homeowners also HAD to apply for an FM3 visa. This is also inaccurate because an FM3 visa is only needed for certain activities: simply being a home owner is not necessarily an “activity”. What the owner plans to do with the house and other factors related to income (or not) associated with the property determine who needs an FM3 (or FM2) visa.
The email stated that the city and SEMARNAT are planning to confiscate those houses or properties who “owe” this Federal Tax. This is preposterous!

Mexico is a country where the law prevails, and there are civil rights enshrined in the Mexican constitution that protect anyone in Mexico against losing their belongings or possessions without having had the right to defend themselves.
In the case of any tax dispute, property owners must be notified personally, so that they can defend themselves. For any authority to enter into a foreclosure (not confiscation!) related to a tax debt — such as Property Tax or Federal Zone Tax — that authority must follow a series of legal processes that assure the constitutional rights of the property owner; give the property owner the opportunity to challenge the validity of the tax; and which provide ample time and opportunity to pay the tax prior to civil action or consequence.

If you have any question or concern about tax payments, the Municipal authorities in Puerto Peñasco have always been very cooperative and flexible in creating options that allow property owners to resolve tax situations. I strongly recommend that any property owner with concerns contact Mr. Jesus Garcia, Finance Director for the City of Puerto Peñasco, directly. Our firm has has always found him to be both available and helpful, and we believe that he is the perfect contact for any property owner seeking accurate information regarding taxes and tax arrangements.

The Federal Maritime Zone is not something to be feared. This far-sighted legislation has been of clear benefit to both Mexican and non-Mexican beachfront property owners and users by insuring that Mexico’s magnificent beaches remain unspoiled, and can be enjoyed by everyone.

It is unfortunate that some people choose to circulate “scare tactic” emails that pollute the enjoyment that all Mexican beachfront property owners should experience, and we hope that we’ve alleviated some of the false concerns that these emails may have raised.

By Anna Cecilia Dabbs, Senior Real Estate Attorney, O’Farrill & Associates

As many of you know there are a lot of ‘Pending” trusts for our homes in Cholla Bay. Confusion has been out there as how the process works, at least from the standpoint of when we start at SBR and they end up submitting to the Bank.

The company has put together a procedure so that you can understand how and what they do to get the “package” to the bank.

I hope this give everyone some idea of what the company does for submittal. I think that at this point many of the packages are in the banks hands. Unfortunately, we do not have their schedule of how their process works.

Click here to view the steps for Rectification

MIKE DUGAN

I was wondering if there is anyone in the HOA that can help with the trust situation? Our property is at M27 L14. We have provided everything required, our lot has been rectified, they have our current addresse, e-mail and phone numbers. It has been almost 3 years now since we purchased our property. The last we heard from SBR was Bancomer has all our documents, but SBR is no longer doing anymore on the trusts. We went into Bancomer.They said we should have our trust in 2 1/2 mos. That was the beginning of Sept. I can’t get any response at all now from SBR or Bancomer. Do you have any insight to the maddening situation? I know there are several other people in the same situation. Is there anyway we can get some assistance? We hear a new excuse everytime we finally do get in touch with someone at the bank or SBR.

Fred and Christine McGinty
M27 L14

President Mike Dugan’s response

I am not sure that SBR can do anything that they haven’t done already. In a meeting with Benji Brown, Shirley McDonald, Pete Peterson and myself, it was found out that there are different problems in various accounts. They have attempted to notify the people and then resolve the outstanding issues.
Once resolved, the “package” is put together and approved by SBR, it is sent to the bank, Bancomer. At this point it is out of their hands and an issue between yourself and Bancomer.
The best that I can suggest its to contact the representative at the bank. Their office is the small room on the North side of the bank.(See update below)

My first suggestion would be to go to the SBR office during working hours and ask for Karla to verify that your package has been sent to Bancomer. If it has been sent to the bank, you have to contact Bancomer, not SBR.

Update from Mike.. (1/15/08)

I was informed that the Trust department office has moved to an office on Fremont street. This is the road leading to Caborca. I believe it is in the “Fremont Plaza”. New structure on the North side of the street. If you get to the road that turns off to Maya Palace, you’ve gone too far!!!!!!!!!!!!