It is common in the Riviera Maya to find the legal concept of EJIDO (Mexican rural land tenure institution held in common) in Playa del Carmen, as well as in the neighboring town of Tulum. In most of the cases this kind of land holding is confusing for foreign investors as well as Mexican nationals.

Promotion and consequent sale of Ejido land is quite appealing for foreign investment. Nevertheless not knowing the law in this regard, has resulted in several illegal and unsuccessful transactions that risk the assets of those acquiring this kind of real estate in our area.

That is why those interested in acquiring property subject to this system, must first understand the legal nature of Ejido, which is completely different then private property. In addition potential investors should be aware and well informed of the process, terms, and cost, of how an Ejido piece of land can become private property.

The Ejido is a system for land occupancy created in Mexico as a result of the Mexican Revolution of 1910; it was originated by the government to guarantee the poor rural population to have access to land for agriculture and development. The Ejido is an institution of peasant origin with its own legal existence and estate, with a special communal property system, different from private property.

The regulating body for Ejido is the General Meeting of Ejido Members, made up of Ejido land owners. The Ejido property system includes the divided land (devoted to exploitation), communal use land and urban pieces of land (devoted for settlement). In all cases, the General Meeting of Ejido Members is in charge of assigning, setting boundaries and determining the destination of the said land in favor of the Ejido Members. These in turn, have the right to engage and vote in the Ejido member meetings, as well as in the assigning of an urban piece of land, and having access to the common use land and exercise the right to the individual piece of land.The right to the individual pieces of land can be granted in favor of other Ejido members or in favor of third parties neighboring the agricultural community.

Ejido members can also acquire the full area of the land by complying with the requirements as set by the Land-Reform Law. Consequently the extensions of land stop being Ejido land and these are subject to the provisions of common law, (as private property).In the same way, Ejido members an acquire full ownership on their urban pieces of land, and thus turning these into private property.For the acquisition of full ownership, for urban pieces of land as well as divided extensions of land, prior authorization by the General Meeting of Ejido Members is required.

In regard to the communal land use, these are non-transferable, except when the party acquiring is a mercantile or civil corporation where the Ejido or the assigning Ejido Member is engaged. Otherwise, land for communal use can not be assigned to anybody.

It is important to mention that there is a National Registry for Agricultural Land, a branch of the Federal Government in charge of keeping the control on the tenure of Ejido land and providing legal documented security in regard to Ejidos.

There is also a government program under the name of PROCEDE (Certification of Ejido Rights and Title on Pieces of Land Program), whose main purpose is the regulation of Ejido land. The importance of this program is to support countryside programs, as well as strategies of the federal government in favor of agriculture. This program provides security and a legal guarantee to the Ejido sector, and it is a mandatory step for Ejido Members at the time of acquiring the full domain of their extensions of land and urban pieces of land.

Ejido land can not be transferred in favor of foreign entities or corporate entities.

Persons wishing to acquire a piece of Ejido land need to be of Mexican descent in accordance to the law, with the acquiring party being able to prove the property has been separated from the Ejido Property System, and it has been transferred to private property status by registering it with the Public Registry for Property.

Otherwise, if the Ejido Member has not acquired the full rights to the Ejido land, it is mandatory to show the certificate of agricultural rights in order to prove tenure together with the above mentioned requirements.

In this case, those nationals still interested in acquiring Ejido land whose private property status that has yet to b acquired by the Ejido Member, he/she needs to follow certain procedures and guidelines:

Transfer of agricultural rights must be written in the presence of two witnesses; the right of first refusal shall be considered (preference to acquire the holding of the Ejido rights holding) regarding the Ejido Member and his/her children.

Once the right of first refusal has been exercised, and has been waived, the transfer shall be notified to the General Meeting of Ejido Members as well as to the National Registry for Agricultural Land. It is important to know that these acquiring parties are required to be residents for a year or more within the land where such Ejido land is located.

After having fulfilled the above requirements, and once the requirements by the Land-Reform Law has been met, the purchasing party can then be acknowledged by the General Meeting of Ejido Members.

Once the application for full ownership has been approved by the General Meeting of Ejido Members, the cancellation of parceled land rights must be requested from the National Registry for Agricultural Land for title issuance and registration with the Public Registry for Property. The Ejido land is then removed from the Ejido System and it becomes private property, and it will then be governed by the Civil Law in effect in the State of Quintana Roo.

This process is not immediate; it requires time and patience to make sure every step is followed. This procedure does not apply to foreign investors, who can not be considered as residents to the Ejido land, and they can not acquire real estate property directly within restricted zones such as the Riviera Maya,

Therefore, only Mexican individuals may be subject to this procedure and consequently, only Mexican individuals may acquire Ejido land.

The use of "strawmen" is often resorted in theses kinds of transactions (national individuals who act for another to acquire Ejido land), nevertheless such practice is not recommended.

In summary, in regard to foreign investors interested in acquiring Ejido land, it is recommended to wait for the Ejido Member to acquire full ownership and title of the Ejido land in order to be able to transfer the title and/or a purchase agreement to a foreign investor.

Lic. Miguel Angel Garcia Garcia
http://www.playadelcarmenlegal.com
(984) 803-5133
(984) 144-9719 (Cell)