Americans Face Eviction From Baja Resort Homes : Mexico: 150 homeowners, many of them California retirees, are caught up in a complex land grant dispute.

ENSENADA, Mexico —  In a hard-luck case that illustrates the perils of owning Mexican real estate, about 150 Baja California homeowners, most of them U.S. citizens from Southern California, face mass eviction on Oct. 11 from a picturesque beachfront development just south of here, homes in which many have invested their life savings.

The looming evictions at the surf-side community known as Punta Banda, 85 miles south of the U.S.-Mexico border, provide a wrenching example of how life in Mexico can turn risky or even tragic. U.S. tourists are increasingly caught up in a wave of carjackings and kidnappings sweeping Mexico, and just last month three U.S. residents in Baja California were slain in separate robbery incidents.

The pending loss of the Punta Banda homes, ranging in value from $50,000 to upward of $1 million each, is a cautionary tale for Americans who are thinking about buying permanent or vacation residences in Mexico.

It should also cause the estimated 63,000 Americans who already own property in Baja California to reflect on how ownership can be like the shifting white sands of the beaches here, and how powerless U.S. authorities are to intervene when disputes arise.

While foreign residents cannot own Mexican land within 65 miles of the U.S. border or 35 miles of the Mexican coastline, they can lease and build on land in those areas for terms of up to 50 years, owning the improvements.

That loophole has spawned an invasion of U.S. citizens in recent years, many of them retirees, attracted to the inexpensive, carefree Baja lifestyle.

The sheer numbers of U.S. buyers make property disputes inevitable, especially when naive or careless U.S. investors collide with unscrupulous Mexican developers and fly-by-night U.S. marketers, as is sometimes the case in south-of-the-border real estate deals.

So, if the 150 Punta Banda homeowners are evicted from their homes next month, they would not be the first Americans to lose their shirts in Mexico.

$25 Million Worth of Property at Stake

But the scheduled action could rank as Mexico’s largest single eviction of U.S. homeowners on record, with about $25 million worth of property involved.

It certainly would stand as one of the most heart-rending, since many of those facing eviction are elderly retirees with no other place to call home.

“We wouldn’t have enough to buy another house if we lose this,” said Alejandro Sanchez, 67, a retired Yuma, Ariz., bank executive who lives at Punta Banda full time. He was one of 40 homeowners who attended a meeting with an attorney at the development Wednesday to discuss their options. “We put most of our money into this.”

The crux of the case is the Mexican federal government’s practice of making land grants, called ejidos, to peasant and indigenous groups, which accelerated in the 1960s and ‘70s.

But those grants are now the focus of many legal challenges from outsiders claiming ownership, and from within by ejido members who claim their rights have been abused.

The residents of Punta Banda, whose houses are built on a disputed ejido, are caught in the middle.

“Ejidos are in a legal state of flux so it’s very risky for anyone to invest in one,” said Jorge A. Vargas, a professor at the University of San Diego School of Law. “A serious problem all have is the validity of the land title, because there were in many cases fraudulent transactions, inadequate registrations and collective claims. It’s a very complicated situation involving many actors.”

The government created the 250-acre Ejido Colonia Esteban Cantu in 1973 on a sandbar known as Punta Estero peninsula, which was once an isolated and unpopulated beach haven known only to fishermen, campers and surfers.

By the late 1980s, the 80 ejidatarios, as members of the communal ownership group are called, had leased most of the peninsula to Americans looking for a piece of paradise in laid-back Baja.

Ensenada developer Carlos Teran acquired rights to build the Baja Beach & Tennis Club and dozens of surrounding home sites that Americans found appealing.

But seven original landowners filed suit in 1987 challenging the legality of the ejido, saying it had been illegally formed. In 1996, the Mexican Supreme Court concurred with the original owners and ruled that the developers who sold the home sites never had legal title to the ground.

Eviction Notices Arrive From Court

It took until last week for the court to issue eviction notices. While most of the residents knew of the property dispute, most were hoping that somehow they would be allowed to stay.

Now, with the Oct. 11 eviction deadline looming, many Americans here admit to having been in a state of denial and are confused about what to do next.

“To have us sitting here with our stomachs in a knot, not knowing what will happen next, it’s so mentally confusing that people, myself included, are walking around in a daze,” said Grant Hoel, 78, a San Juan Capistrano retiree who has owned a house here since 1996.

“I feel terrible, haven’t slept for weeks now, worried about this whole situation,” said Marcel Boussala, 72, a retired real estate developer from Los Angeles who stands to lose the $600,000 he has invested in a home and three lots. “There are so many people who have nothing except these homes.”

With the Mexican high court’s verdict apparently the final word, homeowners are torn between whether to stay on their property until the bitter end or to continue their legal battle.

They are confused by the conflicting legal advice and by the always byzantine Mexican legal system.

At the homeowners meeting this week, Ensenada attorney Rosamaria Sandez urged the homeowners to hire her to file another injunction that she said could stall the evictions for several months.

She also said that residents are entitled by Mexican law to receive “fair value” for their homes before eviction.

But Ensenada attorney Carlos Mendoza, the official notary whose job it was to deliver the eviction notices, had a different take, saying that the homeowners’ seeking an injunction would be futile because a Supreme Court ruling cannot be stayed.

And the landowners have no obligation to pay the residents because there is no “contract” obliging them to do so, Mendoza said.

Like many of Punta Banda’s residents, Joe Maruca, superintendent of the Imperial Unified School District in El Centro, never thought it would come to this.

He will retire from his post this month and was planning to spend his golden years at the Mexican beach house, for which he paid $80,000 cash in 1996. Now, he says, he’s “sitting here holding the bag.”

“We thought somehow the Mexican government would make U.S. investors whole, since the ejido was a federal project,” said Maruca.

“I don’t think anyone has any idea of what to do,” he said. “I haven’t the slightest idea with whom to cut a deal. We don’t know who to hire to do what and against whom.”