PURCHASE OF COMMUNAL (EJIDO) LANDS IN MEXICO

DAVID D. SPENCER
Attorney at Law

© David D. Spencer


Vast amounts of land in Mexico remain in the hands of communal groups known as Ejidos(eh-hee-doughs). Ejidos are creatures of federal statutes, one of the outcomes of the Mexican Revolution of 1910 established to receive and hold agrarian land. Ejidos are essentially land-owning cooperatives comprised of individual members and governed by bylaws, assemblies and governing councils. Ejido land is found throughout Mexico, even in urban areas, and is especially common along the coastlines in areas now considered desirable for foreign ownership.

Parties considering the purchase of ejido land must be aware of the legal regime governing ejido land and the steps necessary to obtain clear title to them. Otherwise they will waste their time and money on what may turn out to be a lengthy or unavailable legal process or a void or avoidable purchase agreement.

One should begin with the understanding that ejido land is not fully possessed of “marketable title” as that phrase is understood in common law jurisdictions. Under Articles 14 and 80 of the Agrarian Act (Ley Agraria), only the communal landowners, tenants, or settlers may hold agrarian rights, and conveyance (purchase/sale) contracts can only be carried out between said persons.

Article 14. Ejido landholders shall have use and enjoyment rights to their parcels, along with the rights their bylaws grant to them and such other rights as may legally correspond to them.

Article 80. Ejido landholders may convey their parcel rights to other ejido landholders or settlers from the same population nucleus.

Thus by law conveyances (sales) can only take place between ejido landholders or settlers who belong to the same communal nucleus. Therefore, if a third party (individual, corporation or other entity) wishes to purchase an ejido landholding without being a communal landholder or settler, the contract setting forth the purchase will be null and void as a matter of law.

Note, however, that under Article 79 of the Agrarian Law the holder of ejido land interests may permit their use (not fee ownership) by a third party individual or entity.

Article 79. The ejido landholder may exploit his/her parcel directly or grant usage or usufruct rights to other communal landholders or third parties through a sharecropping or shared-profit arrangement, association, leasehold, or any other legal act not prohibited by law, without the need for authorization from the [ejido] assembly or any authority. The landholder may also contribute his/her usufruct rights to the formation of commercial or civil partnerships.

Accordingly, lease agreements, joint ventures or other arrangements may lead to the use of ejido land by third parties, provided such arrangements do not purport to unlawfully convey the ejido landowner’s ownership interest.

Once it is understood that title to ejido land does not begin as fully “marketable” it is easier to understand the process by which it can become fully transferable to non-ejido third parties. The steps are as follows:

1. A general assembly of ejido members must be held to delimit and assign parcels to individual members.

2. Following this assembly a member may request that the Federal Reforma Agraria agency issue her or his “Certificado Parcelario” evidence rights to the particular parcel. During or after the Mexican Federal Program for Certifying Ejido Landholder Rights and Parcel Title Deeds (Programa de Certificación de Derechos Ejidales y Titulacion de Solares – PROCEDE) a definitive survey map of the ejido should have been created or officially certified.

3. A second general assembly of Ejido members must be held for the adoption of full title. The minutes of this assembly will again list the ejido parcels with respect to which full title rights are granted and designate their owners.

4. Following this assembly, a member may request that Reforma Agraria cancel the parcel certificate and the registration of the parcel in the National Agrarian Registry and issue her or his “Certificado de Título”, or title certificate.

5. The title certificate must then be registered in the corresponding Public Registry of Real Property.

6. At this point the parcel may be subject to conveyance before a Mexican Notary Public, as is the case with non-ejido land.

7. Note, however, that when a parcel that was converted to private property under the above steps is sold for the first time, there are statutory rights of first refusal in favor of (a) relatives of the seller; (b) any person who has worked the parcel for more than one (1) year; (c) the other ejido land owners; and (d) other settlers and the ejido population as a whole, in that order of priority. These rights may be eliminated by following the proper statutory notice and expiration procedures.

The above steps may seem complicated, but there are no short cuts. Often the required assemblies can be held quickly. In some cases they may already gave been held, in which case the prospective buyer’s task is to make sure that all the steps have been followed, verified with certified copies from the public record of such things as minutes of ejido assemblies, certificates of title, etc.

Given that ejido landowners have the legal ability to enter into usage contracts before or without completing the above steps, prospective purchasers are well-advised to begin their purchase with an agreement that we call a “Usufruct and Purchase Option Contract” that provides use and occupancy rights to the parcel for an extended period as the above steps are completed, with completion of the steps being conditions precedent to the obligation to purchase.

Here is a link to a sample ejido land purchase agreement:

Sample Ejido Land Purchase Agreement

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:

DAVID D. SPENCER
Attorney at Law
1621 Lake Mount Drive
Snohomish, WA 98290-1730
Tel 360.862.9101 or 206.650.7048
Fax 206.508.3999
Email: spencer@davidspencerlaw.com
www.davidspencerlaw.com

ACKNOWLEDGMENT:

I gratefully acknowledge my long-time co-counsel in Mexico, Rivadeneyra, Treviño y De Campo, S.C. for their assistance in reviewing this article. The firm may be reached as follows:

RIVADENEYRA, TREVIÑO Y DE CAMPO, S.C.
31 Poniente No. 4128, 9 Piso, Col. Ampliación Reforma
Puebla 72160 PUE
MEXICO
TEL. 011.52.222.249.88.28
FAX. 011.52.222.249.23.61
Email: frivadeneyra@rtydc.com