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For foreign and inexperienced investors in Mexico, the country holds key penumbras regarding property governance, including land ownership, be it publicly, privately, or collectively owned. In fact, investors unfamiliar with the legal framework, culture, and other practices in Mexico may be perplexed by the complicated process for getting access to acreage—whether by purchase, lease, possession, usufruct, rights of way, or other means. If due diligence is lacking, investors can miss important stipulations in property governance, leading to significant cost overruns. Worse, when doing business with the government—whether at the federal, state, or municipal level—penalties apply when work is delayed, except in cases of force majeure or similar contractual exceptions. And if there is an increase in the cost of a project due to delays, a once profitable plan can turn into bad business. Thus, investors must consider not only where to acquire land for the construction of a project, but also such things as the rights of way for access and easements.
This paper analyzes land classifications in Mexico according to its constitution, wherein the complexity of the land property law originates. Land classification should be easy, but Article 27 of the Mexican Constitution is laden with historical, ideological, and political minutiae. First enacted by the Revolutionary Constitutional Congress of 1917 (Congreso Constituyente), Article 27 is considered not only a source of law, but also a political document, which, over the course of a century, has undergone 20 amendments. Some basic concepts around land property rights, as provided for in the law, are also examined. Finally, this paper reviews three basic classifications of land titles: 1) federal ownership; 2) private ownership, as regulated by federal or state agencies; and 3) social ownership, which includes ejidos and communally owned lands, as normed by Mexico’s agrarian law (ley agraria). Analysis of the most relevant implications of these types of titles will follow.
