Acquiring Ejido Land in Mexico – Article by Walfre Ibarra Escobar
02 Sep 2010 Leave a Comment
in Land Regimes, Mexico Real Estate Tags: developers, land, mexican law, mexican real estate, mexico, mexico real estate information center, property, realtor, retirees; investors; invest, transfer or rights
There was recently an article in the Vancouver Sun regarding Canadians involved in title disputes over Ejido land. Contrary to what the article says, Mexico has clear laws on land acquisition and it is important that foreigners – as well as nationals- work with professionals who know the laws. There are different types of property in Mexico, as in other countries, and Ejido is a particular kind that is more like an Agricultural Reserve and not the kind of land that is most commonly acquired by foreigners. There are very specific procedures that must be followed in order to buy/sell Ejido land legaly.
Ejido land is a property regime that dates back for more than 80 years, and it is not “private property”. In the 90’s, President Carlos Salinas changed the law so that Ejido land could become transformed into private property in order to be sold as such.
Ejido land may become private property through a process called PROCEDE, which is a program to certify of ejido land Rights. Once the EJIDO LAND becomes private property and IS going to be sold to a third party, there is a legal process that has to be followed:
- First, the COMISARIADO EJIDAL (legal representatives and administrators of an Ejido) has to post a notice on their office board for 30 days advising other ejido owners of the intent to sell. The notice must explain which property is on the market and the price. This is because relatives of the ejidatario who wants to sell (person holding the rights to the ejido) have a first right of refusal by law.
- At the same time a letter of notice has to be sent to the municipality and the state government because they also have a first right of refusal. This is mainly in case a treatment plant or a street is projected on said piece of property.
- All procedures have to be supervised by the Agricultural authorities.
It is not unusual for ejidatarios to transfer their Rights to certain pieces of property assigned to them through an instrument called CARTA DE POSESION or letter of possession. Often, the ejidatarios just sign a simple letter assigning the Rights to somebody else. However, because the letters do not follow the legal procedure noted above, the use of the properties can be reversed back to the original beneficiary.
In general, if the said letters of possession or assignment of Rights is issued by the COMISARIADO EJIDAL - the legal representatives and administrators of that Ejido – they are normally honored as long as the “seller” has been paid and the COMISARIADO EJIDAL has received the payment for administration cost. The sale is not legal but when done this way it is generally honored. There is different legal procedure in place to “legalize” this sort of transfer of rights.
There are also parts of Ejido land which may not be sold nor transferred because they are designated for public use or zoned for schools.
THE LAW IS CLEAR and there has been Ejido land transformed into private property and then sold with no incident. It is very safe and legal when it is done properly. In fact, about 90% of the low cost housing built in Mexico in the last 15 years, has been built on land previously marked as EJIDO LAND. However, to avoid problems the sale has to be handled by a knowledgeable realtor and notary public. Not all realtors and notaries have experience with Ejido land due to its specialized nature. People sometimes look for short cuts specially when the price looks cheap and that is when the problems arise. We do not recomend buying propery with ejido background if a buyer does not know how it works or is not willing to follow all legal procedures. There is a simpler legal procedure in place for the transfer of common private property to nationals and foreigners.
To summerize:
- Ejido land is not private property, but may be transformed into private property through a legal process in order to sell it. It is possible that parts of an ejido may not be sold as they may not be zoned for residential use or they may be designated for public use.
- Ejidatario: Person who has rights to Ejido land. Ejidos are made up of multiple pieces of land, and there are generally several ejidatarios involved in every ejido. One ejidatario may have the rights to multiple pieces of land in defferent areas of the same ejido.
- Comisariado Ejidal: Legal representatives and administrators of an Ejido.
- Municipal government, state government, other ejidatarios and ejidatario family members: all parties have a right of first refusal regarding the sale of ejido rights.
- Just as you would in your home country, be sure to follow all laws and work with realtors and notaries that are experienced and knowledgeable in the type of purchase or sale you want to make.
About the author:
Walfre Ibarra Escobar is CEO of Walfre Real Estate. With more than 35 years of local and regional experience, Walfre has played an active part in regional development in Mexico’s Pacific Northwest and facilitating foreign investment for Americans and Canadians. Walfre is sits on multiple advisory boards on behalf of the National Chamber of Commerce including Mexico’s Tourism Board and the National Housing Fund Institute (INFONAVIT). Walfre can be contacted at email@walfre.com.mx
Disclaimer: This article is not meant to be advice on acquiring land of any kind in Mexico, or other countries. Individuals should consult a professional. This is article is not an analysis of the cases stated in the said Vancouver Sun article, as the writer nor the publisher know the details of those particular cases.
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