Real Estate & Finance
Is it a bargain? Or a problem?
by Linda Neil
EJIDAL (EEEE-heee-doll) properties were established in
Article 27 of the Mexican Constitution of 1917 as an outcome of
the Revolution and represent probably 50% of all the land in
After the Revolution hundreds of millions of acres from the
original Spanish land grants were expropriated by the government
and classified as “ejidal” properties. The state retains
ownership of these lands and the peasants, or farmers, have the
right to use them, to live on and to grow their crops on them.
The rights of usage pass from father to son, but these ejidal
properties can never be sold as private property.
In Baja California Sur alone, there were 100 ejido groups
occupying five million 375 thousand hectares, according to the
Ejidal Census made in 1991 by INEGI, the federal government
statistical bureau. Only six other states in the entire country
have more ejidal land.
The average amount of land for each ejido in BCS is 53,758
hectares. That’s about 134,395 acres for each ejido or almost
210 SQUARE MILES of land for each ejidal group!
Per decree published on February 26, 1992 in Diario Oficial,
Mexico’s official newspaper, certain ejidal lands can now be
converted to private property through a process known, in
Spanish, as the PROCEDE, (the procedure).
This is a seven-step process that may take as much as five years
to accomplish, and consists of the following:
1. Resolution within the ejido. A two-thirds majority must
decide to convert parcel lands to private property. This does
not pertain to human settlement or communal property, also a
part of ejidal land. This pertains only to the individual
2. Mapping, allowing for streets, gardens, other donated lands,
human settlements and communal lands.
3. Allotment of a parcel to each ejiditario (farmer).
4. Application to Agrarian Reform, Mexico City.
5. Approval by the Agrarian Reform.
6. Transfer of parcels to the individual ejiditarios.
After this process is completed and registered with the Agrarian
Reforms, the ejiditario who wishes to sell to an outsider must
first notify other family members, those who have worked the
property for more than one year, then other ejiditarios in the
group, neighbors, and the ejidal government before completing a
sale to the outsider. These parties have the right of first
refusal and notifications must be made following a specific
ONLY after all correct notifications have been made does the
EJIDITARIO receive a deed. ONLY then may he in turn transfer in
fee simple to third parties, nationals or foreigners. If the
property is in the restricted zone ONLY then can an ejidal
property be acquired by a foreigner, PROVIDED the Secretary of
Foreign Relations will grant a permit for same.
This is for properties where the ejidal group agrees in an
assembly to convert its parcel property to private property.
What about the ejidal group who chooses NOT to convert its
parcel land to private property? Can it be used by outsiders?
Article 45 of the law states that ejidal properties may be
the object of any type of contract in association or use
contract made by the ejidal group, or by individual ejiditarios
on common lands or parcel lands. Contracts made with third
parties may be granted for a term up to thirty years and can be
Under the Mexican Civil Code the maximum lease for
residential property is ten years. Thus it can be said that the
ejidal properties have an important advantage over private
residential property when it comes to leasing.
There is, however, a substantial difference between OWNERSHIP
and LEASING. It is important not to confuse the two.
OWNERSHIP, even in the prohibited zone, where ownership is a
PERSONAL right of use and enjoyment, permits indefinite usage
through multiple renewals (every fifty years) of trust permits,
and a clear-cut right to rent those rights, to sell those
rights, and to collect a profit therefore. Annual costs under a
trust (fideicomiso) are limited to bank administration fees and
property taxes and the owner has full rights to all improvements
on the land.
LEASE RIGHTS from an ejidal group can be for a maximum term
of thirty years and can be renewable. The annual lease cost,
however, is often a monthly or annual payment and, while it may
be fixed for the first lease term, (up to thirty years) costs
upon renewal are not usually negotiated for the following lease
term, and may be increased to any amount that the leaseholder,
the ejido, requests. Failure to pay the amount requested by the
holder of the lease means that lessee (the tenant under the
lease) must vacate the property and, of course, must leave
behind ALL improvements affixed to the property. In a rental
situation, the tenant never owns the improvements and the amount
of the rental will probably be determined by market conditions.