As with any real estate investment, the purchase of land involves getting information and comparing the options available in the market. The purchase process is fundamental in order to know the benefits that the future real estate investment will provide.
Ejido land may seem to be the most convenient option due to its low cost, but it is not the best option due to the legal problems it presents.
In the following blog we will talk about ejido land, private properties and the options that best fit what you are looking for.
What is ejido land?
Ejido lands are portions of land that the government grants to the inhabitants of an area to carry out the activities and projects that the Ejidal Assembly determines according to the needs of the community (For example: schools, hospitals or parks).
This extension of land is characterized for being of collective or municipal use, that is to say, the state grants a group of people the rights to work these lands. Therefore, an ejido land does not have a private owner or proprietor, but rather has ejidatarios.
These activities can be divided into three types:
Parceled land: The same land is shared by one or several ejidatarios.
Common use land: This is an extension of land destined for the economic sustenance of a community.
Land destined for human settlements: An area that has been assigned for the development of community life, usually located in an urbanized area and with a legal background.
In Mexico there are more than 5.6 million ejidatarios, i.e., a little more than half of the country's land is in the possession of ejidos and agrarian communities.
In most cases, ejido land is used for agricultural or livestock activities. In the Mexican Republic, the ejido is made up of three main bodies:
Article 23 of the Agrarian Law grants authority to the Ejidal Assembly for the delimitation, allocation and use of ejido land. This means that the Assembly can grant ejidatarios full rights over their plots, which means that they are no longer under the ejidal regime, but are subject to the private property regime.
What are the differences between ejido land and private property?
Although both are extensions of land, they are differentiated by their use and modality. These differences can be classified into 4 main categories:
In terms of ownership or title. Private property has the deeds that guarantee the possessory rights of the property. In order to take possession of privately owned land, it is necessary to deed the property in the name of the new owner and record this change of ownership in the Public Registry of Property.
An ejido land does not have a public deed in the name of a private individual, it belongs to the state or municipality and is assigned to an ejidatario for a specific use stipulating the specific terms and conditions for its management. It cannot be purchased or sold because the person to whom it was granted cannot sell the land, but can only transfer it to other ejidatarios.
In terms of documentation. Legal land must be registered in the Public Registry of Property and must have the corresponding deed, in order to obtain a title deed that guarantees full possession of the land.
Ejido lands have a certificate of land rights, whose only function is to authorize the ejidatarios to use the land granted to them by the state, but does not accredit them as owners.
Having the land certificate makes the ejidatarios believe that they have property rights and therefore try to sell the land, but this practice is not legal.
In terms of the owner. Since the ejido lands are government-owned, they are the property of the state. Ejidatarios have no legal power to sell, inherit or rent.
Another difference is that all property owners must pay an annual property tax. In the case of ejido land, ejidatarios do not have this obligation, however, they must pay a contribution fee to the ejido.
There is an alternative for those who want to convert ejido land into private property. This can occur when ejido land is designated for residential use, it will continue to belong to the municipality until the Assembly grants the land to the ejidatarios as lots. At this point, after a series of procedures, the ejidatario can acquire the rights to the land to sell or rent it. Risks when buying ejido land
These are properties that belong to the state, and their sale is illegal.
The "sale" of ejido land is subject to fraud.
The state has the full right to expropriate the land at any time.
Since there is no document that guarantees the ownership of these lands, there is no legal certainty to protect the investor, his rights and the land.