Derecho de Tanto – Legal Terms in Mexico
A simple expression, but of such great importance in our Mexican legal system…first of all let us translate this expression before getting in the matter to be reviewed.
The word “DERECHO” means a Right and the word “TANTO” is define in the Larousse dictionary as: “an imprecise amount”. In other words the expression can be translated as the Right of an imprecise amount and when it is related to persons it can be said as the Right of any one.
Now that we have established the meaning of this expression we can proceed with the matter to be reviewed and to do this we will look at a real estate transaction regarding a real estate property in Mexico.
In Mexico there are three types of real properties, governmental, private or community. In this article we will illustrate the possible situation where one who buys a real property which was once a community real property called “Propiedad ejidal”.
We know that a foreigner can not acquire any Rights on a community real property (Ejido land) but that he can acquire ownership of personal Rights on private real property and many do without knowing about the “DERECHO DE TANTO” and that is where the problem lies.
We also know that many foreigners and Mexicans have in the past bought property that was once “Ejido” land and, invested in building expensive houses without knowing if the “Fideicomiso Traslativo de Dominio” contract (wrongly called bank trust) is valid or in the case of an “Escritura” (written document) is good…relying only on real estate vendors or friends that for most parts do not have any idea of the laws in Mexico…and / or who rely on the words of a salesperson who sales title insurance.
When one is told that the land was once “Ejido land” one has to start to be extremely prudent. The reason for this is that even though the land was converted in private property when a “Titulo” (title) was issued by the government this does not mean that the title is valid. Furthermore, even though a “Notario Publico” (contract lawyer) made a sale(s) or any transfer following the issue of the title this does not mean that the original title is valid and that the transactions were or are valid.
The reason for this is that if article 84 of the “Ley agrarian” was not respected, before the issuance of the Title, the sale can be annulled at any time. In Plain language is means that any one who has Rights on the property can claim them and have the title nullified thus making all subsequent transactions null.
The first question is can one fix such a situation? The answer is yes if handled correctly by experts in the matter otherwise the situation can become a platform for what I call “legal extortion” which means that who ever has rights on the property can ask for compensation.
The second question is can one be compensated by the title insurance? In our humble opinion insurance companies do everything that can be done or evoked so as not to pay…and the only recourse one has is a long costly legal battle…
So if one did buy a property which was once “Ejido Land” what can be done? The only logical solution is to contact a legal firm that have experts in real estate transaction and in researching title chain defects and in the event that the procedure established in the above mentioned law have them fix the problem.
Note from the Author
It has come to my attention that many foreigners have either a FTD contract or an Escritura via a partnership on land that was once Ejido land and do not have clear title because article 84 was not followed; in other words due to the lack of the "Derecho de tanto" their "title" is no good.
Lic. J. Beaulne LL.B