| Ejido
(Agricultural) Lands
Ejido lands have a long history in
how they came into being. Essentially, they are similar to "commons
land"; after the revolution, communities and peasants were
handed strips of land, in the main, to grow crops on, and they are
called "Ejidos". You CAN buy Ejido land, but the sale
requires the agreement of the whole community that 'own' it, the
process is arduous and risky. Some big property developers may negotiate
to buy a big plot of Ejido land, with a view to "fractionalising"
it (usually introducing mains water, sewerage and electric to the
land as well), to develop property and/or to sell off the individual
plots to small property investors. Under these schemes, the land
is often re-classified and made available for private ownership.
The process is usually undertaken by professionals who understand
Mexican property law intimately and can from a year to several years.
The current advice is: double check to make sure that the land you
are buying is not Ejido land and if it is, avoid it.
Note: It is
advisable to purchase Title Insurance if the property you are purchasing
is ex-ejido land (although regardless of the type of property, Title
Insurance is a shrewd investment).
The real estate property
of the ejido is divided into three categories:
-Individual parcels
-property for common
use, and
-property for community
development
Individual parcels are
those for which parcel certificates have been issued to individual
ejido members by the decision of the ejido member''s meeting, and
inscribed in the national agrarian registry. No individual parcel
may be larger than pequeña propiedad (100-800 hectares) and
no more than 5% of the ejido property. The national agrarian registry
will issue a deed of an individual parcel of the ejido which in
turn will be recorded at the corresponding public registry of property.
The property for common
use in the ejido is really the patrimony of the ejido and it is
the ejido member''s meeting which decides what is to be done with
this land. It can be subdivided into individual parcels or used
to do business with other private individuals or corporations. The
property for community development is intended to meet the needs
of the ejido community for urban development. Article 75 of the
new agrarian law states that the ejido may transfer ownership of
common use properties to partnerships or companies in which the
ejido or its members participate in joint venture corporations in
which their capital contributions consists of real estate property.
It is important to point out that the title to the property in a
joint venture is assigned to the corporation and the ejido no longer
owns the real estate property in question.
The agrarian authorities
no longer intervene to regulate transactions between third parties
and the ejidos. The process of formation of an ejido is similar
to the one for a joint venture corporation. As in the latter case,
members in the aggregate contribute their rights to the real estate
for common use. The contributions are approved by the ejido members
meeting. The contributed rights then constitute the economic support
or capital of the ejido community. Purchasing property of the ejido
is a decision of the ejido member''s meeting. Only the property
for common use may be purchased. Many foreign investors have entered
into joint venture agreements with large ejidos using the ejido
population as workers and producing vegetables and fruits, which
are subsequently sold throughout the world. In projects not involving
agriculture, which could include tourist developments, there are
no restrictions on how much the ejido must hold in capital of the
corporation. There is no restriction whatsoever in dealing with
indiividual parcels if a parcel certificate has been duly issued
and registered. Leasing of property for common use is permitted.
Article 45 of the new agrarian law states that common use of property
and individual parcels may be the object of any contract that entails
the use of property. Such contracts are limited to a term of 30
years, and may be renewed.
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