Purchasing Ejido
The History of Ejido
In 1920 the concept of the Ejido was adopted by Mexican President Álvaro Obregón, 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. The Ejidos were then passed down from generation to generation and could not be sold to ensure that the local farmers would never be stripped of their land again.
Understanding what an Ejido is
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.
Settling in Ejido Land
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 private contract to buy the land.
Ejido landowners have the legal ability to enter into usage contracts with prospective buyers with an agreement often called a “Usufruct Purchase Contract” that provides use and occupancy rights to the parcel for an extended period, however, they should recognize that they have absolutely no rights, until they are able to legally obtain title through a Fideicomiso (bank trust).
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