Ejido Property Privatization

Ejido land was created by Mexican President Lazaro Cardenas in 1930.

In the late 1980’s, Mexico was transformed from a socialist autocracy with to a privatized, globally competitive nation. 

Ejidos are an institution dating back to the Mexican revolution.  Francisco Villa and Emiliano Zapata recruited peasants to fight in exchange for land. When it was time to disperse the spoils of war the farming cooperative or ejido was born.  The beneficiaries of the land were given personal use parcels that would stay in their families in perpetuity.  In addition each ejido has communal land for exploitation as a collective. Until the privatization reforms of the 80’s, ejido members, either individually or collectively, could not sell, trade or encumber these lands in any way.

There is more ejido land in Mexico than the total sum of all properties held privately or publicly. And now, thanks to the privatization process, Mexican and National Foreign investors can purchase parcels of ejido land in Baja for tourist development, energizing the local economy, creating jobs and income for the local Municipalities.  Ejidos were intended to be farm or fishing cooperatives, but most of the land in Baja Sur is not suitable for either one.  An example is the property now owned by “Propiedades Mar del Cortes”.  It once belonged to Baja Sur largest ejido-Santo Domingo.  32 acres in the desert with about 800 meters of shoreline by the Sea of Cortes, unsuitable for planting, was owned in common by 216 ejidatarios (ejido members).  

Attorney Alfredo Cristo, the chief counsel for Corporativo Cristo & Associates, bought with US investors the 32 acres to future develop a pristine subdivision for retirees and vacationers.  Alfredo and his investors accomplished what everyone, thought impossible: to negotiate and gain agreement from 216 ejido families.  Folks who generally have enormous difficulty reaching agreement among each other, let alone accepting the offer of an outsider and foreigners partners. 

The process for buying ejido land as a non ejido member or foreigner can be time consuming and must be pursued with diligence, patience and expertise.  The “DERECHO DE TANTO” is the terminology used for making a purchase offer to a “parcelario” (individual ejido parcel owner).  These individual parcels can be small or large some times even hundreds of acres. 

The first step in the process is submit an offer to purchase with “derecho de tanto” is to draft a written offer in which the spouse and or heirs of the ejiditario have the first right of refusal to purchase at the offering price.  .  Once the family has accepted the offer, the second right of refusal is held by the ejido membership.  They must approve the offer by a 75% majority vote in their regularly held meetings (“asambleas).  If they vote to accept the purchase option, the written offer is posted for 30 days in the ejido office.  During these 30 days, any ejido member can exercise their “second right” of purchasing the property at the proposed price.  If no one, within the ejido, exercises the option to purchase, the offer is then posted for the surrounding neighbors who have the third right of refusal.

Buying a parcel can be difficult enough but purchasing an unassigned parcel requires a lot of patients, effort, time and money.  It requires the ejido to proceed with a lengthy privatization process that does not culminate in an “Asamblea Dura” in which 75% agree to privatize the ejido.  Whether an individual parcel or the privatization of the entire ejido, a government survey team from “Reforma Agraria” is necessary to assure and certify boundaries and subsurface areas.  In addition the “comisariado ejidal and team members”, a legal board group for the ejido must sign the approval for sale on behalf of the ejido and that approval must be notarized by a Notario Publico and registered with the “Registro Agrario Nacional” of the “Reforma Agraria”.

As a foreigner, wishing to venture into an ejido investment with out the guidness and support of Corporativo Cristo & Associates Real Estate Law Firm or similar, you must be prepared for cultural idiosyncrasies along the way.  First, getting an ejido quorum together to vote on your offer can be difficult to accomplish.  It may require a monetary incentive paid to the ejido president for rallying the troops.  Also, you will be expected to pay “hidden fees” to the lawyers from (diverse places) who can expedite the sales process.  Often the process can be accomplished in months, but sometimes it can take several years. Corporativo Cristo & Associates experiencies has been an average of one year.

To learn more about the process of buying ejido land you can contact Corporativo Cristo & Associates for a consultation and review of your case at alfredo@mwt.net .