Ejido – Taking Away the Fear for Foreigners
Wayne Franklin - Tropicasa Realty

The ejido of Boca de Tomatlan controls the ejido beachfront, riverfront and hillside communities from Mismaloya to La Troza.

Ejido. The word strikes fear and uncertainty into the minds of most foreigners. And well it should. Ejido properties (Mexican co-op farm land) are off limits to the foreign community, despite the fact that many have “purchased the rights to use” these properties through what is called a “prestanombre” (literally translated, lent name). However, for those who have dared to take the chance of not having legal title and borrowing the name of a trusted Mexican friend to hold their title, it appears that their risky behavior is about to pay off.

At a meeting held recently in the little town of Mismaloya , the Ejido of Boca de Tomatlan, which controls the ejido beachfront, riverfront and hillside communities virtually from Mismaloya to La Troza, it was announced that the Ejido is in the process of being “regularized”. So what is regularization and what does it really mean and more importantly, what is the process in which to get your property regularized?

Regularization essentially means that you are taking an ejido property and making it into a fully titled property, allowing anybody, including foreigners, to ultimately be able to own this property. This is an enormous benefit as much of this property, like the beachfront land of the Boca Ejido, has incredible resale and development opportunities that are legally available to foreign buyers/owners only through the fideicomiso process (and not under the Ejido structure). Therefore, once a property is regularized, it can be titled and transferred as any other regularized property that you would find throughout Vallarta and the Bay.

The process, while sounding relatively unassuming, can be daunting, primarily due to the timeframes that can be endured. If you currently “own” or, through a prestanombre “own”, a parcel in this Ejido, you will need to provide the following documentation to begin the process:

• Constancia Ejidal (this is the letter that was issued from the Ejido recognizing you or your prestanombre as the “owner” of the property).

• Identification (if you are Mexican, this would be an Electoral Card and/or a birth certificate; if you are not Mexican, this would be your legal status in Mexico (i.e., FM-2, FM-3, etc.)

The procedure will be as follows:

• All properties in the Ejido will undergo full surveys. Each property will be measured to verify property lines and boundaries. It is important to note that if a discrepancy is found at the time of the survey, any issues and/or disputes must be resolved prior to the issuance of the title. For example, if a neighbor built a fence or a portion of his/her home on “your” property, this issue will need to be resolved prior to the title being issued. The reality is that the other party is now in “possession” of that property, so if you did not dispute it before, the likelihood is that they will now get title to that portion of the land. Of course, you will only be responsible for paying for the remaining property that will be titled to you, unless you are able to resolve the dispute with your neighbor. The ejido has little if any power to resolve these disputes. If you cannot resolve the differences, your property cannot be regularized. The survey process began the first of August and can take at least 2 months (and likely longer).

• The identity of each property owner is determined by the Ejido, based upon your ‘Constancia de Posesion'. See item #5.

• The required documents are then requested of each Ejido property owner. Please make sure that you only provide COPIES of these documents, as the Ejido will not be responsible in the event of loss of any documentation. Originals will be required for verification, but should not be provided for this process.

• Once all of the above has taken place, an Asemblea is conducted to formally recognize each individual owner, their specific parcel, complete with survey measurements. In the event a foreign buyer/owner, the Fideicomiso on behalf of the foreign buyer/owner will be recognized as the titulos will actually be held in the name of the Ejido itself. This is also the time where the pricing is agreed to be paid from the buyer/owner to the Ejido. In the event certain buyers/owners do not agree to the price structure, they will not be included in this Asemblea and/or agreement and will have to renegotiate at a later date. They will remain ejido owners without titles or escrituras until an agreement is made with the Ejido and the process is formalized in an Asemblea.

• It is very important to note that the title will be issued in the name of the “owner of record” with the Ejido, as shown on your “Constancia de Posesion”. If you are Mexican, you will need to make sure that this is your name and it is accurate. If you are not Mexican and you have been using a prestanombre, you will need to have the records modified at the Ejido. For both Mexicans and foreigners, to make changes in the name of the “owner of record” means receiving a new ‘Constancia de Posesion' at the Ejido. There is a charge for this of $6,000 pesos and can take as long as a month to effect . Your physical presence is REQUIRED to make this modification (otherwise, anybody could do it without your knowledge). A title can only be issued in ONE person's name. Therefore, in the event of a husband and wife or partnership, it is important to determine the proper name for the constancia, and therefore, the title.

• All necessary documentation is delivered to Guadalajara and the preparation of each individual “titulo” (title) commences. In the case of a foreigner, a titulo cannot be issued directly to them. Therefore, it will be issued to the Ejido and immediately transferred to the Fideicomiso on behalf of the foreign buyer/owner.

• Once the titles are returned to the Ejido, they will be issued directly to the owners, and in the case of foreigners, they will be transferred to the Fideicomiso of the buyer's/owner's choosing for preparation of the escritura.

Of course, there is another important question that you are probably asking right now. How much with this cost? Well, it's “almost free” – well, not quite. PROCEDE (which is Programa de Certificacion de Derechos Ejidales y Titulacion de Solares) is the governmental forum that is in charge of converting or “regularizing” ejido land to titled land. PROCEDE is comprised of five agencies: SRA (Secretaria de la Reforma Agraria), PA (Procuraduria Agraria), RAN (Registro Agrario Nacional), INEGI, and SECODAM. All of the services of PROCEDE are completely and absolutely without charge! True. Ah, but don't think the whole process is free … it is not. Engineers and/or surveyors will need to be employed and there will be fees involved in their services. (The homeowner's association of the region, called Asociación Costa Platino, A.C., is paying for surveyors separately as well as other fees so that they can expedite the regularization process.) But most importantly, there will be fees that will need to be paid to the Ejido itself.

This is where there will be some bitter pills to swallow. When you “bought” your land from the Ejido, you paid a price for that land. In addition, you have been paying a “use fee”, if you will, which has been in lieu of having to pay property taxes to the government. Also, if you transferred the property to another, you also paid a “transfer fee” of 10% of the value of the sale. During all of this time, you have still not been the “owner” of the property, just the ‘rights' to its use. Therefore, this process is going to require you make a final payment to the Ejido. Oh, I can hear it already – “But I ALREADY bought my land from the Ejido.” Yes you did, but no you didn't. The legal transaction that will recognize you as the titled owner of the property is now taking place. What happened before was out of the confines of regularization process and therefore is meaningless. It granted you the opportunity to get in on the ground floor, of sorts.

The Ejido now will establish a final payment for each square meter of land. There will actually be three prices in this zone as they will reflect pricing for the hillside properties, riverfront properties, and beachfront properties. It is important here to understand that a concerted and combined effort to negotiate pricing on these properties is in your best interest. There will certainly be more power in numbers, rather than attempting to negotiate independently the pricing of your individual lot. The association previously mentioned, Costa Platino, is organizing such an effort. Clearly, for those of you who “purchased” your property many years ago, you paid considerably less than what those who bought relatively recently would have paid. The bitter pill will certainly come with those recent buyers – but that is one of the many risks of purchasing ejido property. Therefore, a joint effort to negotiate the best pricing on all of these properties will make that pill easier to swallow. All property owners should join the Asociación Costa Platino A.C. to benefit from their work.

You will also have the cost of the Notarios to issue your paperwork. But you're going to have to pay attention to this part. The title that you will get for the lot that you purchased from the Ejido will NOT show any improvements (house/condo). Remember, we're talking about the regularization of the LAND that you purchased from the Ejido. Therefore, the improvements that you've made to the property will need to be incorporated into your ultimate escritura (this is different than the “titulo” that will be issued from the Ejido). This process is called “manifestation” and you will want to make sure that the full value of your property is manifested for accuracy on your escritura. You should consult with your Notario Publico for full and accurate information in your particular case regarding this process and the costs involved. Standard Notario fees will apply in relation to the preparation of your escritura, with the manifestation being additional.

Phew! That was easy. And how long did it take to get it all done? If everybody provided all their documents in a timely fashion, the surveys were conducted and there were no disputes, everybody agreed to the price structure from the Ejido the first time around, and the governmental process went like clockwork, it would be nine to ten months from measurement to escritura. Given that there will be border disputes, given that not everybody is going to agree with the pricing from the Ejido and given that documents will be lost, misplaced, and/or the governmental process itself will not be like a well oiled machine, plan on 1.5 to 2 years – if it's less, you'll be dancing in the streets (well, hopefully not too much as those buses are still blazing at about 100 mph even on corners). If it's more, then we all know why. The good news, as if the concept that the ejido land can and will be regularized within our lifetimes (and hopefully in the relatively near future) is not good enough, is that any delay will probably only mean more money in your pocket from the appreciation that Vallarta continues to enjoy.

Thanks goes to Ing. Aurelio Urena Gonzalez of the Procuraduria Agraria for explaining the process and bringing this information to light, Dennis Owen of Asociación Costa Platino, A.C. for translating to all attendees at this meeting, and to Kelly Trainor of the American Consulate for keeping the American community informed of events that concern us. Below you will find contact information for each of them as well as related governmental contacts:

Ing. Aurelio Ureña Gonzalez
Procuraduria Agraria (local)
Calle Atun 102, Col. Gaviotas
224-8940

Asociación Costa Platino A.C.
membership information, contact:
Dennis Owen owenaja@pvnet.com.mx 228-0675
Nancy Bowen nancyinpv@yahoo.com 228-0290
Dora Perches macin@cosmored.net 222-5342

Mrs. Kelly Trainor
American Consulate
amconpv@prodigy.net.mx
222-0069

Secretaria de la Reforma Agraria
01-800-800-1439

Procuraduría Agraria
www.pa.gob.mx
01-800-849-2263

Registro Agraria Nacional
01-800-800-726-835 (well, that's the number on the brochure, kiddies)

INEGI
01-800-248-3898

SECODAM
01-800-001-4800