Wednesday, August 25, 2010

With Mexico progressively finding interest from foreign investors, this attention has been recognized by the Federal and State governments and is being encouraged through encouraging foreign purchase and ongoing development in the corresponding hot-spot destinations.   A particular case in point is the Southwestern coast encompassing the states of Nayarit and Jalisco, where Puerto Vallarta has traditionally been the main attraction.  In recent years, the tourism population has grown to 3 million visitors per year and is expected to double in the next ten years.  Amid the focal point on Nayarit, the government-owned agency FONATUR (Fondo Nacional de Formento al Turismo, or translated to National Fund for creating Tourism) is directly involved with complex plans for infrastructure and development targeting primary areas such as Higuera Blanca, Litibu as well as Sayulita and is scheduled for completion by 2014.

As the growth of Puerto Vallarta progresses, the natural course of expansion is inevitable.   The Nayarit/Jalisco coast connects largely by Highway 200, which runs through Puerto Vallarta and maintains along the shoreline into Barre de Navidad and onto Manzanillo.  The terrain in between is virtually untouched and open for large-scale tourism development where numerous destinations such as the archeological zones of Rivera del Rio Tomatlan, La Pintada, Salinas La Bermeja, Estero El Chorro and Dam Cajon de Pena are located.  In addition to the above, the recent land purchase near to Campo Acosta has been acquired by the state of Jalisco and is the planned site for the new government-sponsored international airport, where construction is scheduled to begin December of this year.

Jalisco plans to implement all of the preliminary ingredients necessary to match the efforts of Nayarit with the foundation for tourism development already underway.  The initial phase now rests on land assemblage by opening the real estate market and enabling legal transfer and sales transactions on what is now known as Ejido land.

Originally from Spain, the Ejido means “common land” and the word Dehesa meant “common property where cattle feed”.   In Mexico, the two definitions uniquely merged and Ejido became communal land, for collective farm use, non-transferable and not subject to any type of lien. Since the independence from Spain in 1821, Mexican mentality regarding farm life and working the land continued.   After the 1910-1919 Civil War and Revolution, the legislators of the time adopted certain idealisms to shape a philosophy that included fundamental elements from the theories of Democratic Communism to form Ejido.

The Agrarian Reform Act of 1915 was the first Mexican law to rule the use of Ejido land and was included into the constitution of 1917.  By introducing dramatic changes to Mexico’s land possession system, these documents recognized that the nation retained ultimate control over privately held land. Property was commandeered and redistributed to provide land to farmers and their families without allowing the wealthy to create monopolies over such, as the State retained title to the land but granted the Ejidatarios (Ejido members) the right to farm, either in a collective manner, or through the designation of individual parcelas.  Ejidatarios could not sell, lease or mortgage this land but could pass the right of possession to heirs.  However, the Ejidatarios had to work their land continually in order to maintain rights over it.

Although politicians differed widely in opinions regarding Ejido and reformed the law several times over eight decades, it was not until 1992 that the government recognized what was feasible at the turn of the century, no longer worked.  At this point, the Mexican government was well aware that the Ejidatarios were leasing and selling rights to their farmland through illegal contracts.  Therefore, changes were made to the law to include Article 27 of the Constitution, which stated, “that an Ejido is a legal entity able to represent itself and hold its own land”.  With the Ejido supreme authority, being the General Assembly, followed by the Comisariado Ejidal (Board of Directors), and the Consejo de Vijilancia (Vigilance Committee), they can determine issues and solutions concerning the community. The general assembly is responsible for the Ejido bylaws, authorization of new Ejido members, approval of business contracts and the election of the leader groups.  The Comisariado Ejidal is accountable for administration of the Ejido and represents the community in judicial matters.  All Ejidatarios are automatically members of the peasant sector and considered by the state to be a modern Patron, traditional paternalistic property owner, who has the authority to control prices, credit opportunities, as well as access to farm machinery and water rights. Article 47 of the 1992 New Farm Act states that the Ejido general assembly is responsible for defining the use of the common land, authorizing the change of the farmland to settlement land and authorizing the Ejido members to acquire full ownership of their land.

According to new act, Ejido land was divided into Land for Human Settlement, Common Land and Farmland.  The most important segment of Ejido land is the “Land for Human Settlement” as it is the demographic concentration of homes, streets, parks and public services, including school property, industrial, farm and research land, sports and cultural avenues, all of which cannot be sold, is unchangeable, does not expire and any acts to sell, acquire, or impose a lien on this property will automatically be void.  However, this does not apply to the Solares, which is a parceled lot within the Ejido land.  With the cooperation of the municipal authorities, the General Assembly members followed the specifications outlined by the Secretary of Development and Public Services to define, locate, divide and record the Land for Human Settlement.

Under the new law, the Ejido can award its members individual titles to the land, not merely usage rights to their parcelas.   Ejidatarios can subsequently rent, use as collateral or sell their properties and do not need to work their lands to uphold ownership.  They also may enter into partnerships with private entrepreneurs.  The law also effectively ends the redistribution of land through government decree.  Finally, the processing and resolution of land disputes are decentralized, leaving all Ejido members the right to acquire a solar where the size is to be established by the Ejido General Assembly and where the Registro Nacional Agrario will provide title for these properties, enabling the Ejidatarios free to do as they wish with their own solar parcel.

Mexican terrain is currently categorized as Public, Private and Social Property.  Ejido land may now be petitioned for, and receive legal title as Private Property through the following means.  To assist in dealing with agricultural transformation two government-owned agencies were implemented. PROCEDE (Programa de Certification de Derechos Ejidales y Titulacion de Solares) was established in the amended farm law of 1992 with the purpose of preventing irregular settlements concerning Ejido land.  Run through six departments, it is a ten-step program.   In 1993, the Mexican government furthered the second bureau, CORETT (Comision para la Regularizacion de la Tenecia de la Tierra), which is a committee responsible for the transformation of Ejido land to Private Property by regulating Ejido land ownership, issuing public deeds and ownership titles and to prepare the expropriation request of the Ejido communal property.  By 1995, the two agencies were fully integrated with the purpose of regulating illegal settlements made before the new law and to provide full ownership of former Ejido land.

Calculated in 1995, Ejido makes up 42% of Mexico’s territory, yet few real estate agencies fully understand the term or the procedures involved.  Despite the fact that the state of Jalisco holds a high percentage of this land type, most Bay of Banderas AMPI members shy away from such transactions. Re/Max Sites Marina has been a pioneer in this field and is the first professional company within the AMPI association to actively deal with assemblage, regularization and legal promotion of Ejido land under contract.