SAMPLE MEXICO EJIDO LAND PURCHASE AGREEMENT



Purchase agreements for ejido land in Mexico can, and should, be comprehensive. The adage "get it in writing" applies without exception. The sample below documents a purchase to occur at a future date when the parcel has been fully and demonstrably privatized and its zoning changed. Prior to the closing of the sale, the seller grants usufruct rights to the buyer so that the buyer may have immediatel possession of the property. With possessory rights to the property the buyer may proceed to make improvements (such as installing a fence or wall around the property to protect it)and otherwise make the buyer's presence known to third parties. These possessory rights are also a strong disincentive to sellers who may be tempted to find a second buyer at a better price while the first sale is pending.

It is my practice whenever possible to produce legal documents of this type in both Spanish and English, side-by-side. To be enforceable in Mexico a legal document must be in Spanish. If it is only in a foreign language, such as English, it must be translated by an authorized translator. The sample set forth below provides only the English version of the sample agreement. It was, of course, drafted with the participation and legal review of Mexico counsel.




© David D. Spencer

SAMPLE PURCHASE AGREEMENT FOR EJIDO PARCEL IN PROCESS OF PRIVATIZATION, WITH USUFRUCT CLAUSES TO ALLOW IMMEDIATE OCCUPANY BY PURCHASER

USUFRUCT AND PROMISSORY BUY-SELL CONTRACT ENTERED INTO BY, AS ONE PARTY, ________________________________, COMMUNAL LANDHOLDER FROM THE LOCALE KNOWN AS _____________, MUNICIPALITY OF ________________________, STATE OF ____________ (HEREINAFTER REFERRED TO AS THE “USUFRUCT GRANTOR AND PROMISSORY SELLER”), AND AS THE OTHER PARTY, _______________, [NATIONALITY], RESIDENT IN _________________________ (HEREINAFTER REFERRED TO AS THE “USUFRUCT GRANTEE AND PROMISSORY PURCHASER”), WHO HEREBY AGREE TO BE BOUND BY THE TERMS SET FORTH BELOW.

R E C I T A L S

I. The USURFRUCT GRANTOR AND PROMISSORY SELLER declares:

a) On ______________, 20__, there was held the Assembly for the Assignment of Lands of the lands of the ________ ejido, Municipality of ____________, State of ____________.

b) That he/she is an individual, age of majority, of Mexican nationality, civil status single, and owner the rights corresponding to lot No., hereinafter referred to as the “LOT”, of the _________ Ejido, Municipality of ____________, State of _______, as shown on Parcel Certificate __________________, dated _________, 20__, issued by the Delegate for the National Agrarian Registry for the State of ________ under File ________________________________________ and with a surface measurement of __________ Hectares, with the following meets and bounds:

NORTH: _____ meters in uneven line with the road; EAST: ______ meters with parcel ____; SOUTH: _____ meters with parcel ____; WEST: ______ meters with parcel _____.

c) The “USUFRUCT GRANTOR AND PROMISSORY SELLER” declares that she has agreed with the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” to sell the “LOT” described in Recital I b) of this contract.

d) That she has the power to enter into the present promissory buy-sell contract under the terms of Articles 12, 13, 14, 45, 46, 76, 78, 80, 81, 82, 84, and 86 of the Agrarian Act.

e) That it is her will to grant in usufruct and to promise to sell to the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” the “LOT” described in Recital I b) of this contract on the terms and conditions set forth below.

f) That she designates as her domicile for purposes of this contract that known as known address in __________, Municipality of ___________, State of ___________.

II. The “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” declares:

a) That based on the recitals of the “USUFRUCT GRANTOR AND PROMISSORY SELLER”, it is his will to obtain in usufruct and to promise to purchase the “LOT” described in Recital I, paragraph b) of the Recitals of this contract on the terms and conditions set forth below.

b) That he designates for purposes of this contract his address to be Calle ____________, No. ____, Piso ___, Colonia ___________, ________, ________.

Based on the preceding, the parties hereby agree to enter into this contract and therefore to be bound by the following:

C L A U S E S

FIRST. The “USUFRUCT GRANTOR AND PROMISSORY SELLER” hereby constitute a real property usufruct in favor of the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER”, and therefore do deliver to him the use and enjoyment of the “LOT” described in Recital I(b) of this contract, with the boundaries and measurements previously indicated. This contract may be registered by either of the parties with the appropriate Delegation of the National Agrarian Registry.

SECOND. The usufruct of the surface area indicated shall be for a period of thirty (30) years, starting on the date of this contract and shall be renewable for an equal or greater period at the request of the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” prior to its expiration.

THIRD. The “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” hereby pays to the “USUFRUCT GRANTOR AND PROMISSORY SELLER”, as consideration for the usufruct granted hereunder, the sum of MEX$_______.00 (____________________ THOUSAND MEXICAN PESOS) a sum that the “USUFRUCT GRANTOR AND PROMISSORY SELLER” acknowledges she has received prior to the date of signing of this contract, constituting this document at all times as the broadest possible receipt under the law. In this same act the parties agree that the price paid for the usufruct will be applied as part of the total price of sale of the “LOT" upon the formalization of the definitive public deed of purchase and sale.

FOURTH. The “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” shall be able to convey, encumber or lease the use and enjoyment granted in his favor without requiring consent from the “USUFRUCT GRANTOR AND PROMISSORY SELLER”, with the former being liable for any harm suffered by the “LOT” due to the fault or negligence of any substitute user.

FIFTH. By virtue of having received the consideration agreed upon by the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER”, the “USUFRUCT GRANTOR AND PROMISSORY SELLER” hereby delivers to the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” the legal, material, and pacific possession of the “LOT” with all its customary uses and all that in fact and by law may correspond to it. Therefore, as of this date the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” shall be deemed to be the good faith possessor, with it being agreed that the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” may carry out upon the “LOT” all such activities as he may require for the exploitation of same.

SIXTH. The “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” shall be allowed to carry out all manner of outfitting, constructions, repairs, installations, and/or modifications to the usufructed property.

SEVENTH. The usufruct shall terminate: a) Upon termination of the term of the usufruct contract, provided same has not been renewed, subject to prior agreement of the parties; and b) Upon formalization of the definitive sale contract for the “LOT”.

PROMISE OF SALE

EIGHTH. The “USUFRUCT GRANTOR AND PROMISSORY SELLER” hereby promises to sell the “LOT” to the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER”, and the latter does hereby promise to buy for himself or for the Mexican individual or company he may designate the “LOT” described in Recital I (b) of this contract, within a period that shall not exceed one year from the signing date of this contract.

The “USUFRUCT GRANTOR AND PROMISSORY SELLER” recognizes and accepts that by virtue of the “LOT” being located within what is called the “Restricted Zone” and the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” being a foreign person, the latter shall be able to form a Mexican company or celebrate any trust contract with a banking institution, for the purpose of fully performing this contract, and consequently the “USUFRUCT GRANTOR AND PROMISSORY SELLER” obligates herself to enter into the definitive buy-sell contract with such a company or enter into a trust contract with the banking institution, as may be designated by the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER”.

NINTH. The “USUFRUCT GRANTOR AND PROMISSORY SELLER” obligates herself to: (i) obtain the issuance by the _________ Delegation of the National Agrarian Registry of her Property Title for the “LOT”; (ii) register said Title with the Public Property Registry of the appropriate Judicial District, as well as its registration in the appropriate tax department; and (iii) accomplish the applicable notices of right of refusal, including to their family members, ejidatarios, the City Council of the Municipality of _____________________________, and the Government of the State of ____________, in conformity with the requirements of the Agrarian Act.

TENTH. The “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” shall pay to the “USUFRUCT GRANTOR AND PROMISSORY SELLER” as the total sale price of the “LOT” described in Recital 1 (b) of this contract the sum of MEX$_________.00 (__________________________________________________ THOUSAND AND ____________________ MEXICAN PESOS). In the event this contract is formalized in a public deed of purchase and sale, the price indicated here includes the payment for the usufruct agreed upon in this contract.

ELEVENTH. The “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” shall pay to the “USUFRUCT GRANTOR AND PROMISSORY SELLER”, as advance payment of the purchase under of this contract, the sum of MEX$______.00 (_____________________THOUSAND _____________________________________ MEXICAN PESOS). This amount shall be paid “USUFRUCT GRANTOR AND PROMISSORY SELLER” when the “USUFRUCT GRANTOR AND PROMISSORY SELLER” obtains the change by the competent authority of the land use for habitation applicable to the entire “LOT” to “T-5”. The “USUFRUCT GRANTOR AND PROMISSORY SELLER”, by virtue of her receipt of the appropriate advance payment indicated in this clause, shall not to negotiate with other persons the sale of the “LOT” described in Recital I (b) of this contract.

TWELFTH. The “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” agrees to pay as the second and final purchase payment the sum of MEX$_________.00 (_________________________________________________THOUSAND _____________________________________________MEXICAN PESOS). This amount shall be paid to the “USUFRUCT GRANTOR AND PROMISSORY SELLER” when the “USUFRUCT GRANTOR AND PROMISSORY SELLER” delivers to the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” the appropriate right of first refusal notifications, the waivers from those persons who are entitled to said right according to the Agrarian Act, including family members, ejidatarios, the City Council of _____________________ and the Government of the State of _________, the Property Title issued by the competent authority that verify the ownership of the “LOT” described in Recital I (b) of this contract, as well as the appropriate signature on the final public deed of purchase and sale.

The “USUFRUCT GRANTOR AND PROMISSORY SELLER” accepts and agrees with the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” to reduce this second and final purchase payment if an official surveyor should determine that the surface of the “LOT” is less than ___________ Hectares. In this case the price per square meter for the second and final purchase payment shall be the sum of $_____ PESOS M.N. (__________________ AND __/100 MEXICAN PESOS).

THIRTEENTH. The “USUFRUCT GRANTOR AND PROMISSORY SELLER” shall undertake to deliver to the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” all information and documentation regarding the “LOT” as may be needed for purposes of formalizing the definitive purchase and sale contract.

FOURTEENTH. “USUFRUCT GRANTOR AND PROMISSORY SELLER” and the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” do hereby accept and agree that the clauses to be contained in the definitive purchase and sale contract shall be those contained herein, duly signed by the parties.

FIFTEENTH. All expenses due to the procedures for conveying the rights to the “LOT” shall be for the account of the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER”.

SIXTEENTH. The “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” shall have the right to exercise all real property, personal, or possessory actions and exceptions and to be considered as a party to any litigation relating to the “LOT” covered hereunder, even when same is pursued by the “USUFRUCT GRANTOR AND PROMISSORY SELLER”.

SEVENTEENTH. The “USUFRUCT GRANTOR AND PROMISSORY SELLER” agree that in the event she fails to comply with any of the obligations she has agreed to in this contract she shall return to the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” in their entirety all sums paid to her by him.

EIGHTEENTH. The “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” agrees that in the event he fails to comply with any of the obligations he has agreed to under this contract, the “USUFRUCT GRANTOR AND PROMISSORY SELLER” will become creditor for the payment of a conventional penalty equal to 10% (ten percent) of the payments that may have been made to her, and the “USUFRUCT GRANTOR AND PROMISSORY SELLER” agrees she is obligated to return to the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” 90% (ninety percent) of the payments she has received. The foregoing shall be accomplished in a period no greater than ten calendar days from the date of breach of the contract.

NINETEENTH. The “USUFRUCT GRANTOR AND PROMISSORY SELLER” agrees that in the event any ejidatario, neighboring resident, and/or third party in general alleges and/or claims with legal basis, by any means or reason, interests and/or rights relating to the “LOT” subject to this contract, and due to such cause the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” is forced to vacate and/or return the “LOT” due to a decision issued by competent authority, she shall pay to the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” in the form of a conventional penalty, an amount equal to twice the amount of the payments made by the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” to the “USUFRUCT GRANTOR AND PROMISSORY SELLER” plus any and all damages the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” may suffer as a result, regardless of any remedies under civil and/or criminal and/or agrarian law, including indemnity for eviction, that may be available to the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER”.

TWENTIETH. The “USUFRUCT GRANTOR AND PROMISSORY SELLER” agrees and accepts that the “USUFRUCT GRANTEE AND PROMISSORY PURCHASER” shall be able to assign or convey his rights under this contract, such that any third party may perform this contract, it being sufficient for such purpose only that written notice be given to the “USUFRUCT GRANTOR AND PROMISSORY SELLER”.

TWENTY FIRST. This contract may not be rescinded based upon allegations of harm, hidden flaws, or deceit, since all of the considerations as well as the commitments and obligations set forth in the clauses herein were agreed upon and established by mutual agreement between the parties with no pressure whatsoever.

TWENTY SECOND. For purposes of the interpretation of and compliance with this contract, the parties do expressly submit to the laws of the State of ________ and the jurisdiction of the applicable courts, including the City of _________, thereby waiving any other jurisdiction which may correspond to them based on their present or future domiciles.

Understanding the scope and contents of this contract, the parties do sign it in triplicate at __________, Municipality of ______________, __________, México, on the ________ day of ___________ of 20__.

USUFRUCT GRANTOR AND PROMISSORY SELLER

[name printed under signature]

USUFRUCT GRANTEE AND PROMISSORY PURCHASER

[name printed under signature]