Penner & Associates - Mexico Law Firm and Business Consulting for Mexico

For professional assistance & information on legal & business matters regarding Mexico and Latin America, please contact:

ATTORNEYS AT LAW FOR MEXICO
Please contact us at our Mexico offices located at:
Apartado Postal No. 9
San Miguel de Allende, Guanajuato, Mexico
TEL. US.: (800) 856-5709
Local Phone (415) 152-3648

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BUSINESS CONSULTANTS FOR MEXICO
REAL ESTATE BROKERAGE ASSISTANCE FOR MEXICO
At our Phoenix or Mexico Offices
P.O. Box 42773
Phoenix, Arizona 85080
Tel: (623) 242-7442

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OUR MEXICO CITY OFFICES
Montecito no. 38 Piso 37 Oficina 37
Edificio World Trade Center
Colonia Napolis C.P. 03810
Mexico, Distrito Federal
Tel: (55)5351-0438

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Law Information

AGRARIAN REFORM AND EJIDO FARMS IN MEXICO

 

Choose one or more: Mexican Revolution , Land Reform , Classifications , "Dominio Pleno" , National Agrarian Registry , Ejidos , Participation Agreements with "Ejido" Members , Dis-Incorporation of "Ejidos" , Regularization of "Ejido" Land (Alternative to Dis-Incorporation)

Related subjects are Agriculture Agriculture and Foreign Investment

 

Mexican Revolution. One of the fundamental causes for the revolution of Mexico at the beginning of the century was the need of land by the population, that they could call their own. There existed a need to free the population from both the French that ruled as well as the need to free themselves from the feudal system, both of which had long controlled the wealth in the country.

In the U.S. the people sought life, liberty and pursuit of happiness. In Mexico they sought life, liberty and land.

Land Reform. The Federal Ministry of the Agrarian Reform was long ago created to regulate the vast parcels of land that were acquired by the government after the revolution and to care that the feudal system could not come back into power.

Classifications. The land under the control of the Federal Agrarian authority in Mexico can be classified as: "Ejidos" (Communal Farms) , "Colonias" (Colonies of Settlement") , "Pequeña Propiedad" (Small Agrarian Private Ownership Parcels), and "Propiedad Privada" (Private Property, which should have along with it the "Dominio Pleno"). The first three are restrictive in their controls and subject to the Agrarian regulations and agrarian authorities. "Ejidos" do not provide for private ownership but solely for possession, except through the dis-incorporation process, the "Colonias" are for settling of vacant land and although do provide for private ownership are restrictive in their passing of title, and "Pequeña Propiedad" provides for private ownership but still subject to control by the agrarian authorities.

"Dominio Pleno". Once the agrarian authorities have relinquished their controls over certain agrarian controlled property, they issue a declaration (certificate) of "Dominio Pleno" and thusly the property becomes "Private Property". This "Dominio Pleno" refers to full control by the owner and subject to the agrarian regulations, programs or authority.

National Agrarian Registry. The Federal Agrarian Legislation created a Federal National Agrarian Registry, wherein all acts regarding the disposition, use and modification (of the disposition and use) of land under the agrarian control, as well as the creation of agrarian programs, "ejidos", colonias and similar are all registered therein. Once a parcel of land is totally dis-incorporated from agrarian control, its' registry in this national public registry is canceled and thereafter it is registered at the local Public Registry of Property corresponding to the jurisdiction wherein the land is physically located.

Ejidos. As a means of providing land to the poor farmers of Mexico (peons/campesinos) who were so poor they could not pay for land, communal groupings were created in the form of communal farms. The Agrarian Reform Ministry, via Mexican Presidential declarations created the communities communal farms, today known as "Ejidos". The "Ejidos" consist of a defined governing body ("Comisariado"), land parcels ("parcelas") and members ("ejidatarios"), thus creating an agrarian community or town ("ejido"). The land is divided into two sections, one being communal in nature which is held directly by all of the members in common, and where the community services and residences are situated, and the other section is made up of individual parcels, which are identified as being held individually by each member of the community (in "ejidatario" possession), which they use to farm.

The Mexican government always retains the ownership of the "ejido" land and provides that the communities hold and use it under the agrarian rules of Mexico. Unless the parties in question qualify as a member, they are not normally permitted to hold the status of an "ejido" member nor a part of the land set aside for the "ejido".

Participation Agreements with "Ejido" Members. The Federal Mexican government does permit association in participation agreements by the "ejido" members with outside parties for the purpose of producing crops. These agreements are regulated and are required to be registered at the (Public) National Agrarian Registry in Mexico City. Agreements that do not have proper agrarian goals or do not meet other of the applicable rules are not enforceable and not registerable in this registry.

Dis-Incorporation of "Ejidos". The present day Agrarian Law (February 26, 1992) foresees, in its transitory article 8th (at the end of the law), the ability of the "ejido" to decide not to continue to be an "ejido" by choosing a dis-incorporation process.

Now days there exists the possibility of dis-incorporation of ejidos via a specialized process through the Federal Mexico Agrarian Attorney Generalship ("Procuraduría Federal de la Reforma Agraria"). The "ejido" as a communal group must approve it in an extraordinary assembly meeting of all of the "ejido" members and request the mentioned office of government to process the dis-incorporation. Once the dis-incorporation process is complete, the National Agrarian Registry is informed and its makes note that that land is no longer subject to the agrarian restricted "ejido" regime. As well, the completed dis-incorporated land has it's registry at the National Agrarian Registry closed/canceled and is then registered at the local Public Registry of Property corresponding to the location of the land. Even when the dis-incorporation is completed, there are still other issues to address, such as first right of refusal to the other members of the Ejido (and family members / possessors of the lot) prior to selling the resulting privately held land to third parties and to not sell the lot for less than the official state price.

As a general rule, parties that wish to acquire ownership (or at least possession) of "ejido" land in Mexico for other than farming purposes (like residential, hotel, or other commerce), are taking serious risk in investing there, until this land is dis-incorporated, declared in "Dominio Pleno" or its equivalent and had it's registry at the National Agrarian canceled and re-registered at the local Public Registry of Property. Therefore, it has been traditionally wise to not invade this area, unless the investor has deep pockets and willing to spend large sums of money and extended time to complete the governmental processing needed to make a project therein happen.

Due to the desire of foreign investment to acquire prime "ejido" land along the beaches of Mexico, it is more and more common to see activities relative to "acquisition" (in the lose sense of the word) of this land with the idea of dis-incorporation and title passage latter on.

Regularization of "Ejido" Land (Alternative to Dis-Incorporation) Since things are not always black and white, the Agrarian authorities in Mexico have come up with an alternative process to clean up Ejido real estate title for privately held use and ownership.The two systems are know as PROCEDE for agricultural intended use land and CORETT for urban (non agricutural) intended land use (- i.e. residential, commercial).

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