Consumer education creates public awareness. This is certainly not a new concept or axiom. It has become, however, a very important initiative in the past two years when it comes to protecting Arizona buyers of Sonoran real estate.
In November 2001, then Arizona Gov. Jane D. Hull and Sonora Gov. Armando Lopez Nogales signed the first-ever bilateral declaration for the resolution of existing land disputes in the state of Sonora. With this agreement, both governors committed their states to the promotion of consumer education to enhance the confidence and security of real property acquisitions in the Sonoran market. Under the recommendation and auspices of the Arizona-Mexico Commission, Gov. Hull then created the Task Force on Real Estate Practices, Investment and Development. Comprised of U.S. and Mexican attorneys, developers, real estate agents, an appraiser, an accountant and a title company executive, this diverse group of real estate experts also includes members from Arizona's Department of Real Estate and Office of Tourism as well as the Arizona Association of Realtors®.
In 2003, Gov. Janet Napolitano, as chairman of the Arizona-Mexico Commission, re-established the Task Force on Mexico for two simple reasons: to protect Arizona consumers interested in buying real estate in Mexico and to promote economic development throughout the region. Gov. Napolitano's vision for Arizona-Mexico relations is to enhance the educational tools developed by the task force and to support regulatory reform within each state.
During 2002, the task force produced the most comprehensive body of educational information that to date has ever been created on Mexican real estate. Divided into three main categories of information, its work includes a 16-point Buyer's Checklist, a detailed Buyer's Advisory to be used as a guide on purchasing property in Sonora and Mexico in general, consumer protection information with a listing of the "PROFECO" office locations in Sonora, a Seller's Checklist, a Seller's Disclosure for Improved and Unimproved Property, and a Developer's Addendum Disclosure. There is also information about how to procure an Arizona Public Report for any Sonoran residential development that advertises in Arizona as well as information about real estate professionals. All of the available advisories, checklists, disclosures and general data including the members of the task force, all of whom were appointed by Gov. Napolitano, can be viewed, printed or downloaded at www.azmc.org/realestate <http://www.azmc.org/realestate>.
It is critically important that buyers of Mexican realty have access to current information at all stages of the real estate transaction process. It is equally critical that local lawmakers, whether in Arizona or Sonora, provide a regulatory framework designed to protect foreign investment and foster sound economic growth. In May 2002, the state of Sonora passed a law for the inception of a real estate agent registry. The registry, as it exists today, is the first to be created among the Mexican states requiring that all individuals engaged in the sale of real property in Sonora be registered. As part of the registry's requirements, all agents must obtain a permit as authorization to conduct real estate sales and earn commissions. Though the registry is in fact a federal entity, Sonoran law mandates that the registry be obligated to obtain background information on the agents; that it has the right to inspect the agent's sales office and verify compliance as established in the permit; and that it must require a continuing education platform over a two year period. With the establishment of this regulatory entity, the registry represents the first significant governmental attempt, anywhere in Mexico, to improve the educational integrity of agents and to initiate a higher standard of ethics and professional behavior in the real estate community. It should be noted, however, that to date there is no determination of how compliance with this new law will be upheld or how the registry will enforce registration and within what time frame.
At the recently completed plenary session of the Arizona-Mexico Commission and the Sonora-Arizona Commission meetings in Tucson, the task force presented its recommendations to both Governors Napolitano and Lopez Nogales. The initiatives were the following:
- Promote the consumer education and best practices materials developed by the task force by establishing partnerships with other organizations involved in real estate education and development.
- Work with the state of Sonora, real estate industry associations and other pertinent entities, to develop an exam and educational series for Arizona and Sonora real estate professionals seeking to register or maintain registration status with the state of Sonora.
- Support the National Law Center for Inter-American Free Trade's securitization project through outreach and education on the importance of financial reform to real estate development in Mexico.
It is the goal of the task force to continue to refine, enhance and increase the educational information that has been created. It is the opinion of this group that it has a responsibility and has been given the privilege to work with the state of Sonora, the Arizona-Mexico Commission and both Offices of Tourism in recommending procedures for registering and educating the agent community. Additionally, it is the desire of this task force to initiate a closer working relationship with the new government officials who will be elected in Sonora this year. Like Gov. Napolitano's vision for Arizona-Mexico relations, the Real Estate Task Force on Mexico hopes to foster greater economic growth through better consumer awareness which will ultimately protect Arizonans who purchase real estate in Sonora or anywhere in Mexico.
Editors Note: Gov. Napolitano has appointed Elaine Richardson, Commissioner of the Arizona Department of Real Estate, and Mitch Creekmore, Vice President of Stewart Title Guaranty de Mexico, to co-chair the Real Estate Task Force on Mexico.
