Ejido lands are a result of history: After the Mexican revolutions, communities of local peasants were entitled to strips of land (the so called ejidos) to grow their crops. 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.
Today things have changed: As the protection of local farmers is regarded less of an issue and the ejido system has limited development in many areas, ejido land can now be sold. However the sale requires the agreement of the whole community that 'owns' the land and it is not often clear who the owners (or their ancestors) are. If an ejido is sold without the agreement of all (potential) owners, the buyer can risk a legal battle after the purchase which, in the worst case scenario, can lead to a loss of the land (and in the best case can stop any development until the legal situation is cleared, which can take years).
Transferring ejido land into private ownership is therefore a time-consuming process which requires in-depth knowledge of Mexican estate law. There are companies which specialise in this area of property law and have a good track record of transferring ejido land into private ownership. However, even with this expertise, the process can take up to several years.
Private investors and ejidos
There was a time when ejido lands were best avoided completely by private investors (and some people say you should still avoid them today). But with the help of a specialised law firm you can now secure an ejido land for private purchase as well. However you will need to factor in quite a few additional legal and consulting fees, and also be prepared to wait some time (sometimes years) until the land has been transferred.
Under no circumstances should you try to buy an ejido land without the help of a professional and independent counsel. Even if the land is sold to you by an individual who has built a house on there, there is no guarantee that there are no other owners to the ejido (who might only turn up after you have completed the transaction).
If you want to transfer the ejido into a private ownership, the notary (notario) has to check that all procedures have been followed correctly and that there are no other owners entitled to the land.
Title insurance for Mexican property
If you buy real estate in Mexico you should consider buying title insurance for the property you have bought. This is especially recommended if the land you buy has been or still is ejido land.
Title insurance covers any potential claims from third parties that might come up after the property has been transferred to you. Rates for title insurance are about 5% of the property’s value and are payable at the point of purchase. There are an increasing number of title insurance providers for Mexican property, so rates should go down as the competition increases.