 In 1920 the concept of the Ejido was adopted by Mexican President Alvaro Obregon, in the form of the "Ley de Ejidos" (Ejido Act). The government ceded land to local inhabitants, as a community, mostly of Indian origin, for use as farmland. Ejido land is not private property and cannot be bought and sold as if it were.
A very large part of Mexican real estate is classified as Ejido land. Granting of Ejido land was initiated during a period when vast areas of Mexico were sparsely populated and there was no concept of individual land ownership. The new farming community, or "Ejido" could decide whether they wanted to hold all of the land public for the use of every member of the community as a collective; or it could decide whether they wanted to permanently distribute it individually to its members.
Today, Ejidos still manage much of the collective ownership of land in Mexico. Since the constitutional reforms of 1992 Ejido land can be converted into private property and sold to third parties.
A foreigner can not buy Ejido land; it can only be sold to Mexicans. A Mexican wishing to purchase Ejido land must go through a privatization process that transfers the property to them by means of an escritura (a fee simple title). Until an Ejido has been transferred to private ownership, foreigners cannot acquire "ownership" of Ejido land in accordance with their understanding of the word "ownership".
Once the property has been privatized, it can then be sold to a foreigner through a Fideicomiso (bank trust).
Since Ejido land is much less expensive than regular land, many foreigners have elected to take the risk and attempt to buy Ejido property. This is done through a contract to buy the land. However, they should recognize that they have absolutely no rights, until they are able to legally obtain a Fideicomiso.
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