The ejido is a Mexican concept not well understood by foreigners. What is an ejido, exactly? The word, pronounced ay-hee-do, is thought to be derived from the Latin exitus, meaning "the way out." Presumably ejidos got their name from being located at the outskirts of towns and cities, and they were, and some still are, small Mexican villages. The ejido is defined as a community that has joint ownership of a piece of land, lives on the land, and practices joint agriculture on it. While this was the original intention, and was once an accurate description of ejido activity, more and more ejidos today exist as land where no one lives and no agriculture takes place.
The ejido was a concept practiced by the Aztecs. It has had a long and rocky history. When the Spaniards conquered Mexico, it was abandoned; it came back in again when the church was given the authority to hold lands in trust for the peasants. It went out again when the church lost favor, and church lands. When the present Mexican constitution was adopted in 1917 resulting from the 10-year long Mexican Revolution, the ejido was revived. Large tracts of land were taken from wealthy landowners and divided up into ejidos for the peasants. Members of an ejido, called ejidatarios, could farm the land, live on it, enjoy it, pass it to their children, rent parts of it to third parties, but they could never own it or sell it. The mindset of the authorities, from the Aztecs on, seemed to be that peasants were like children, not intelligent enough to manage their own affairs, and so they must be protected by a kind of benevolent (or not-so-benevolent) despotism on the part of the emperor, the church, or the government.
And so, yes, the ejido is a way of owning property in Mexico, but this statement must be read with a realization that "ownership" may not mean the same thing to an ejidatario as it does to your average gringo. To an American, ownership means having what is known in real estate circles as "the bundle of rights": possession, enjoyment, control, exclusion, and disposition. When we own a property, we can possess it, enjoy it, control it, exclude anyone we don't want from it, and dispose of it by selling it, giving it, exchanging it, or willing it to our heirs. To a Mexican, ownership appears to be largely a matter of possession.
This difference in cultural background and assumptions often causes misunderstanding when a foreign investor finds a choice piece of property that is ejido land and wants to buy it. The ejidatarios may tell the investor that they have ownership of the property, and of course they do, but not the same kind of ownership the investor is assuming.
Trying to buy ejidal property can be a risky investment if the investor is uninformed as to the legal pitfalls or unwilling to follow the prescribed procedure.
There is a way to get legal title to ejido property. In 1992 the Mexican government established a policy for regularizing ejido land called PROCEDE. PROgrama para CEsion de Derechos Ejidales (Program for cession of ejidal rights). Through this program, ejidatarios can convert their property to private property, which can then be sold.
There are three types of ejidal property: lands for community development, lands for common use, and individual parcels. The lands for community development cannot be sold or privatized. Lands for common use can be converted into what are called solares, individually owned parcels, which can be privatized and then sold. The individual parcels can also be privatized and sold. This procedure requires a vote of the entire ejido.. There must be a vote of 2/3 of those present to pass the resolution to privatize the land.
Investors should be aware of the complexities and avoid common pitfalls by using due diligence.
Don't pay out large sums of money without receiving a receipt, contract, or agreement that states exactly what the money is to be used for and what is expected from each party.
Try to get as much documentation as possible for the property you are considering. Maps with dimensions and areas are very helpful. If you are considering buying ejido land, work with a real estate agent who is knowledgeable about the process. Don't try to negotiate a deal yourself.
By Nick Fong, Broker, Los Cabos Agent
312-725-3664 US Line
624-157-3170 Cabo Line