The Maritime Terrain Federal Zone Concession commonly known as the Federal Zone, what is it? Which are my rights and obligations? How can I get it and which are the benefits?
By Agustin Galindo - Attorneys at Law - July 2007 / Photos by Jesus de Avila
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“En el mar la vida es mas sabrosa”
Saying
1. What is the Federal Zone?
The Maritime Terrain Federal Zone, commonly known as the Federal Zone is considered as:
- In the case of a beach, a 20 meters wide range of firm passable and contiguous land to such beach; In the case of the (rivera) sides of a river, the range of 20 meters of Federal Zone, starts from the mouth to the sea to the upper part of the river up to 100 meters;
i) In the case of horizontal areas with a 30 grades degree or less of inclination, the federal zone will be determined by the authority.
ii) In the case of coasts without beach but with rocks or cliffs, the authority will also determine the Federal Zone within a range of 20 meters contiguous to the marine coast only if the inclination is of 30 grades degree or less in a continuous manner.
- In the case of reefs and Cays located in the Mexican territorial sea its total surface is considered as Federal Zone;
- In case of lakes, lagoon, estuaries or natural deposits of sea water, that are communicated directly or indirectly with the sea, the 20 meters range of Federal Zone will start from the point where is the (embalse) bigger deposit of water or limit of the “Pleamar zone”.
Please be aware that there is specific regulation for marines, artificial marines and farm estuaries, which I will not mention to keep this article as simple as possible.
Based on the above you can find Federal Zone in:
- Beachfront properties (horizontal land, inclined land and cliffs)
- Sides of lakes
- Sides of estuaries, lakes or rivers
- Reefs and Cays
Also based on the above --please be careful of not “buying” the Eiffel Tower or a Federal Zone-- considering it as a property, in the following cases:
- Property near to estuaries, lakes or rivers
- Property in cliffs
- Coasts with Rocks and without beach.
In this regard, please be aware that the Federal Zone is considered as a common use good of the public domain of the Mexican Federal Government; with the understanding that a Federal Zone can not be transferred, lost by possession, seized or subject to any kind of lawsuit related to its possession; In short a Federal Zone can not be acquired.
2. Which are the uses for the Federal Zone?
The options to legally use of a Federal Zone are the following:
- Protection
- Ornament
- General Use (In case of business such as a restaurant or a hotel)
3. How can I legally use the Federal Zone?
Any resident (Company or individual) in Mexico can use a Federal Zone through a concession granted by the Mexican government, in this particular case the corresponding authority is SEMARNAT. (Abbreviation for: Secretary of Environment and Natural Resources).
A foreigner owning beach front property through a Mexican corporation or through a bank trust, can apply for a concession over the Federal Zone in favor of the Mexican corporation or trustee bank holding the property, in order to use or exploit it.
4. Which is the term of Federal Zone Concession?
The concession can be granted for a term up to 50 years in accordance to the applicable law, however the specific regulation for the Federal Zone provides for a term up to 20 years, and when certain conditions are fulfilled, a concession can be extended prior request to the environmental authority.
5. Which are my rights by having a Federal Zone Concession?
The concession for the Federal Zone does not give to the concessionary any ownership right, i.e., that the concessionary can only use or exploit such Federal Zone in accordance to its concession title but is not an owner in any manner.
On the other hand, the concession rights for a Federal Zone can be assigned (transferred) with the authorization of the environmental authority.
6. How can I file an application for the Federal Zone Concession?
The Federal Zone Concession can be granted by the Environmental authority by filing an application and the term to grant it is:
1. A general term of 272 business days, and
2. A specific term of 208 business days if an investment of 200,000 times of the minimum wage in Mexico, therefore considering that the amount of the minimum wage is of $45.00 pesos per day per 200,000 times, i.e., approximately Pesos $9,000,000
 7. Which are my obligations by having a Federal Zone Concession?
The obligations for a concessionary are the following:
- To use the concession pursuant to its terms and conditions.
- To enjoy the concession’s rights after the date of approval of the authority
- To start the authorized construction within the term provided in the concession and to inform its completion within the following three (3) days after completion
- To be liable for the damages from hidden defects of the construction or derived from the works from repair or maintenance
- To cover the expenses to survey the property subject matter of the concession
- To fulfill with the applicable law and its regulations
- To allow inspections from the authority.
- To build only the approved constructions in the concession
- To evict and deliver the federal zone at the end of the term of the concession
8. Can I loose the Federal Zone Concession?
a. The Federal zone concession is extinguished for the following reasons:
- End of the term of the concession
- Achievement of purpose of the concession or impossibility to achieve it
- Death of the concessionary
- Dissolution and winding up and bankruptcy of a corporation that is the concessionary
- Lost of the property subject matter of the concession
- Express waiver of the concessionary
b. The Federal zone concession is revoked for the following reasons
- For a sub-concession, lease, encumber or carrying out any act or contract, whereby a third party is entitled to the rights provided in the concession or to carry out any act legal or factual that changes the conditions of the concession
- To carry out any activity of construction not provided in the concession, without approval of the authority
- For lack of two payments for the governmental fees provided in the concession
- For producing, allowing, consent or carry out criminal acts within the federal zone
- For opposition or obstruction by the concessionary, its relatives or employees to the authority inspections.
- For not fulfilling the obligations provided by law and the title of the concession.
- For a violation or breach to the laws, its regulations or the conditions provided in the concession by the concessionary.
9. Apart from the legal point of view, which are the benefits of having a Federal Zone?
- Most important than anything else, you can protect the Federal Zone limited with your property for environmental purposes; You can protect a part of our planet.
- No merchant can obtain a permit to run a business in the Federal Zone if a concession to use it is already granted;
- From a certain perspective the value of your property can be increased, considering that you have a concession over the Federal Zone, not without highlighting that you will not own the Federal Zone and that in order to transfer its rights is necessary to obtain the authorization from the environmental authority.
Lot of professionals are offering their services to obtain a concession over a federal zone, there is a wide range of fees and time tables to obtain it, for your own benefit please look for professional services from services providers that are able to explain you in advance: The requirements, costs to be incurred, timetables and that are able to provide you with copies and adequate follow up about your application, until is finally completed.
Agustin Galindo
E-mail: agustingalindo@prodigy.net.mx
Galindo Abogados - Puerto Vallarta
Plaza Genovesa Oficina 4 Planta Alta
Blvd. Francisco Medina Ascencio km. 2.5
Puerto Vallarta, Jal. Mexico 48333
Telephone & Fax: 011 - 52 (322) 225-2235
E-mail: raulgalindoabogados@prodigy.net.mx Website: http://www.galindoabogados.com/ |
Galindo Abogados - Ixtapa, Zihuatanejo
Juan N. Alvarez 162 - A Colonia Centro
Zihuatanejo, Guerrero. Mexico 40880
Telephone: 011 – 52 (755) 554-9915
Fax: 011 – 52 (755) 554-9916
E-mail: agustingalindo@prodigy.net.mx
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