The Mexican Constitution vests ownership of all land, water, natural resources, and airspace in the Mexican nation. Therefore, land ownership is limited to surface rights and to Mexicans by birth, naturalized citizens, and Mexican companies. Mexico's constitution restricts or prohibits direct foreign ownership of land in the prohibited zones, which includes 100 kilometers along the border, 50 kilometers along the coast, and all of Baja California.
In Mexico there are four types of property:
A. Original property of the Mexican Nation, which consists of Parks, Forests, Volcanos, Marshlands, etc.
B. Property of the Mexican Nation by Decree (Article 27 of the Mexican Constitution of 1917), which consists of Minerals, Water, Oil, and the Federal Maritime Terrestrial Zone, a strip of land 20 meters back from the high tide zone along all the coasts. These all belong to the Mexican government, although concessions can be obtained for their use.
C. Social properties, which are either Communal or Ejidal. Communal properties are government lands-often the town squares and area surrounding a rural village, possession of which was established in pre-Hispanic times. These properties are not generally offered for sale. Ejidal properties were established in Article 27 of the Mexican Constitution of 1917 as an outcome of the revolution and represent probably 50% of all the land in the country. I'll discuss ejidal properties in further detail later.
D. Private Property, which is like private property anywhere, and can be bought, sold, inherited, acquired by gift, or awarded by judicial decree. Many private properties are owned jointly by family members (co-propiedad). These are generally old titles with many, many heirs. Let's say that a Mexican bought a 2,000 acre ranch in 1850 and it has remained in the family. By now there may be 250 owners. Co-propiedad is private property, but certain steps must be taken to give legal title. If, say, a great-great-great-grandson wanted to sell such a property, he would have to obtain permission from the other 249 co-owners to sell; each has the right of first refusal. Or the property could be subdivided and title issued to each co-owner, but this is a costly procedure.
Ejidos
Ejidos (pronounced ay-hee-does) represent a unique type of property ownership unknown in the U.S. and Canada. Many foreign investors have run into trouble because of their lack of understanding of the ejido system, often enough to derail their entire projects. As you will see from the description that follows, trying to purchase ejido property can be extremely complex and time-consuming.
The word ejido is from the Latin exitus (exit), because in Spanish colonial times small Indian communities were located near the exits of large towns. These ejidos were villages surrounded by plots worked by individual peasant farmers, and they continued in operation through the period of the Revolution and the early years of the Mexican Republic.
In 1917 hundreds of millions of acres from the original Spanish land grants were expropriated by the government and classified as "ejidal." They were granted to communities for farming and ranching purposes, and registered as such with the National Agrarian Registry. The communities did not own the property, but were only entitled to use and work the land. If they did not, title could be revoked. Rights of usage passed from father to son, but could not be rented or sold.
In 1936 a different kind of ejido came into being when the government, under President Lázaro Cárdenas, seized many large haciendas and began distributing the land to thousands of rural families, 49,000,000 acres by 1940. Approximately 1/3 of the population received land under this program. Many of these ejidos were organized as collective farms. The members of the collectives, called ejiditarios, had no absolute property rights, since the federal government retained ownership of the land. It is estimated that about one-fifth of the arable land in Mexico belonged to ejidos at this time.
In January of 1992, Article 27 of the Mexican Constitution was amended, and a new Agrarian Law was enacted, to permit the lease or sale of an ejido property. With these changes, the ejidos can now own the properties previously granted under the former Agrarian Law. They must go through a process known as El Procede (the procedure).
The ejido as a legal entity is governed by an asamblea (similar to a shareholders meeting) and administered by a board consisting of a president, a secretary, and a treasurer. Each member of the ejido has voting rights with regard to the use of the property, but all the real estate is owned by the ejido as a whole. The members, meeting as the governing body, are empowered to grant property rights for each parcel.
The real property of the ejidos is divided into three categories:
• Individual parcels
• Property for community development
• Property for common use
Individual parcels are those which have been assigned to each ejiditario through certificates issued and approved by the National Agrarian Registry. Neither the ejido assembly nor the ejidal commissioners may use these properties without the written consent of the title holders. These ejiditarios do not have fee simple ownership. They have the right to use a parcel exclusively, bequeath it to a family member, grant the usage to others, rent it, or transfer it.
Once an ejido property has been conveyed by the asamblea to a member, he or she can cancel its registration, have the parcel converted into private property, and register it as such. Then, and only then, can the property be leased or sold.
Privatizing ejido lands is a long process. An ejiditario may not sell his or her land to an outsider until the entire ejidal group goes through The Procedure, a seven-step process that may take as much as five years to accomplish. After the ejiditario finally receives a deed, he or she may in turn sell to third parties, but only after notification to other family members, then to those who have worked the property for more than one year, then to other ejiditarios in the group, neighbors, and the ejidal government. These parties all have the right of first refusal, similar to co-propiedad. If they can't meet the terms of the sale within 30 days, they lose their right of first refusal. If the procedure is not carried out correctly, any transfer to a third party may be declared null and void.
Property for community development or human settlement includes such areas as the city center, school sites, and recreational facilities. These properties cannot be sold or mortgaged.
Properties for common use are those that are neither community property nor individual parcels. They cannot be sold or mortgaged, but under the new Agrarian Law, ejidos can enter into joint venture agreements with partnerships or corporations, mercantile societies, or civil associations. Such agreements must be approved by the Agrarian Reform Department and then also approved by the entire ejidal group. Prior authorization from the governing body is also required for leasing these properties. If the agreement is dissolved, the ejido can get back the property.
Problems can occur when American investors don't understand the complexities of the ejido system. A clear title can't be obtained on an individual lot unless the former ejiditario has gone through the privatization procedure. Another type of problem is exemplified by a potential client of mine. The parcel he wanted to buy had a valid title, but he found that there was still common use property owned by the ejido between the sea and what he thought was a beachfront lot, and the asamblea was planning to put up a taco stand on it.
Buyers also need to realize, when trying to buy the entire property of an ejido, that every member must privatize his or her individual lot before it can be transferred. To buy the community property requires the consent of the governing body. Aside from the practical difficulty of getting 40 or 50 or 75 persons to agree on anything, there is the logistical problem of notifying them of the meeting and getting them to vote. Since most of the ejido land in and around Puerto Peñasco is undeveloped, the owners do not live on their lots and must be sought out elsewhere. And then there will always be a few who can't be located. Some buyers have bought land from ejidos, thinking they had a valid sale; then suddenly an ejiditario has appeared, claiming that he or she never received notification of the meeting, or wasn't able to vote, and this is sufficient to throw a cloud on the title.
All these problems can be solved, but it takes research, legal advice, patience, organizational skills, and a great deal of time to get the job done. Prospective buyers should retain the services of a reputable real estate agent and/or a Mexican lawyer to check out legal details for them, obtain title insurance, and close their transactions through a notario.
I hope you find our websites helpful and we look forward to the opportunity to represent you. If there is something you cannot find within our web pages please contact us via email or call us and we will be happy to help you.
I look forward to the opportunity of representing you.
Sincerely yours,
Ricardo Barraza.
Broker/Owner
Exclusive Buyer's Agent (EBA)®
Certified International Property Specialist (CIPS) ®
Certified Realtor® - Profesional Inmobiliario Certificado® ( P.I.C.)
Member of the Mexican Association of Real Estate Professionals (AMPI) and member of the "N.A.R" (The NATIONAL ASSOCIATION OF REALTORS®)
call us toll free : 1-866-587-2481
Cancun Mexico : 011-52-998-8840434
information@ricardobarraza.com
Let's get together and talk about your home buying and/or selling plans. Call us at the US office at call us toll free : 1-866-587-2481 or in CANCUN MEXICO AT 011-52-998-8840434 or send us an e-mail we'll set-up a time that is easy and convenient for you to meet.
for information and assitance contact:
Ricardo Barraza & Asociados
CANCUN - RIVIERA MAYA - COZUMEL - COSTA MAYA
REAL ESTATE BROKERS
Playa del Carmen office address: calle 10 Norte # 149 Manzana 4 Lote 7
bewteen 10th Avenue and 15th Avenue
Downtown Playa del Carmen across the street from Pelicanos
Shopping Mall Municipio Solidaridad, Quintana Roo Mexico CP.
011- 52- 998- 577 1779 and 011- 52- 998-8840434
e-mail: information@ricardobarraza.com
http://www.ricardobarraza.com
http://www.playa-del-carmen-real-estate.com
Not only are we acutely focused on Customer Satisfaction,we guarantee it in writing. We encourage you to review our Buyer Services Guarantee
RB & Associates assigns the Legal Team from Mancera Ernst & Young® Legal and Tax advisors to asist all our clients during their real estate purchases.
We provide free legal advice to all of our clients from a licensed attorney to ensure the security of their investment. We provide the presence of a licensed attorney at every closing¹. ¹ a licensed attorney provided by Ricardo Barraza & Associates (REALTY-ALLIANCE) is mandatory at all closings in order to protect and oversee both our client and ourselves.
