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Tourism real estate: legal considerations for developers - Newsletters

Tourism real estate: legal considerations for developers – Newsletters

Introduction
Forestry, jungle and non-urban land developments
Coastal developments
Water supply
Waste
Comment

Introduction

Mexico attracts a large number of tourists, and real estate to support this booming industry (eg, residential developments, hotels and golf courses) is frequently being developed by investors.

As Mexico has an abundance of natural resources, tourism developments often take place in a range of different ecosystems, such as forests, beaches and jungles. This article examines the main legal issues that developers should consider when planning a real estate project in Mexico.

Forestry, jungle and non-urban land developments

If a real estate development is planned for a forest, jungle or non-urban land, the developer must determine whether it will affect forestry vegetation. The General Law of Forestry Development defines ‘forestry vegetation’ as an area of more than 1,500m2 which is covered in vegetation native to the area. This can include forests, jungles or even deserts. Under the law, in order to clear forest vegetation, developers must:

obtain a forestry land use authorisation;
obtain an environmental impact authorisation; and
undertake a technical justification study.

Coastal developments

If a real estate development is planned in the federal maritime zone, developers must obtain a title concession. The federal maritime zone covers the entire coast of Mexico and extends 20m inland from the high-tide line.

Water supply

Another important aspect to determine when planning a real estate development is water supply. If the development is not near the municipal sewage system, the developer will likely have to construct a reservoir to supply it with water. As such, in order to exploit a national body of water, developers must obtain a title concession to determine the volume of water that is going to be exploited, as well as any wastewater discharge.

Waste

Real estate developers should also determine the types of waste that their project will generate during construction or operation. The General Law for the Prevention and Integral Management of Waste provides for three types of waste:

hazardous waste, which falls under federal jurisdiction;
special management waste, which falls under local or state jurisdiction; and
solid urban waste, which falls under municipal jurisdiction.

Different liabilities will apply depending on the classification and volume of waste produced by a real estate development. The most common permit requires developers to register as a generator of hazardous or special management waste. However, the applicable permits may vary depending on the specific case.

Comment

Every tourism development is different. Although this article sets out the main considerations to keep in mind when undertaking a real estate project in Mexico, the nature and location of each project will determine the applicable requirements and permits. The sooner developers identify the legal issues surrounding a real estate project, the faster it will be developed. As such, developers are advised to seek legal advice at the beginning of a project to avoid impediments that may cause it to be delayed or even cancelled.

For further information on this topic please contact Adela Lozano at Santamarina y Steta by telephone (+52 55 5279 5400) or email (alozano@s-s.mx). The Santamarina y Steta website can be accessed at www.s-s.mx.

The materials contained on this website are for general information purposes only and are subject to the disclaimer.

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