The best advice I can give today is that condo owners in Mexico should learn the laws to protect their rights. For example, the Civil Code of Jalisco provides a comprehensive description of what condominium ownership means, and how owners can protect their interests.
In my experience, a number of buyers do not take the time to learn the ins and outs of this body of law. Knowledge of the rules and regulations benefits owners. This specific code protects the interests of the condominium ownership as a whole. It is a mistake to assume that the rules and laws for condominiums in the States are the same as in Mexico
Let’s go through some basics of the condominium civil code. The code defines a condominium regime legally and imposes responsibilities and limitations of ownership.
Each condominium unit represents a percentage of the total individual ownership as well as a percentage of the undivided common areas.
The developer has to establish a condo regime legally and obtain authorization from the city. The public document, which becomes the condominium regime that sets out the rules and regulations for the owners, includes: a description of the buildings, the project specifications, the floor plans of the individual units and area in meters, the percentages of individual units in relation to the whole, and the amount of common area in meters and the percentage of common area owned by each unit. In some cases parking spaces are deeded.
When the building is finished, a certificate of completion is issued. The city requires a warranty from the builder that he will finish the building. This requirement of a warranty has the builder sign a promissory note to the city.
Most of us know that the condo regime also sets out the rules and regulations for the owners to abide by. The owners may amend the rules and regulations, if they are not in conflict with the civil code, as long as the prescribed procedures for changing are followed.The rights of the owners to use the common areas, within the described purposes, is as essential as the owners’ rights to enjoy their private area.
The most fundamental responsibility of the individual owner is to pay his maintenance fees.
The condominium will have an administrator appointed in the original regime, who can serve for a period of one year, or when the owners hold their first annual meeting. At this meeting, the owners can appoint their own administrator. The meeting in which the administrator is appointed should be notarized. This gives the administrator an official, legal identity to perform his/her duties. A power of attorney is given to the administrator. An administrator can be an individual or a corporation.
Some of the duties of the administrator are to:
1. Abide by the resolutions taken by the owners at their annual ordinary and extra-ordinary meetings.
2. Follow and enforce the resolutions of the administrative committee.
3. Manage the daily operations of the building and to authorize expenses for maintenance and administration.
4. Collect dues and fees approved by the association, and to keep a record of all income and expenses.
5. Keep the minutes of all the meetings.
6. Provide financial reporting to the owners who request it, after every quarter.
These reports include not only income and expenses, but accounts receivable. Accounts receivable include the list of owners who are behind in their dues and fees.The report should also give the cash balance available.
The executive board, or the administrative committee is comprised of owners or residents who serve with the permission of the owners. The members must be current in their maintenance fees.
This board has the responsibility to:
1. Represent the homeowners in all matters of common interest. They are given a judicial and administrative power of attorney to act for the owners.
2. See that the administrator fulfills his/her duties.
3. Meet with the administrator a minimum of once a month to receive a report on the status of the condominium.
4. Verify the accounting records.
5. Revise the maintenance fees and the reserve funds.
6. Assist the administrator in assuring that all homeowners fulfill their obligations.
7. Report in the annual general meeting the business that has been done during the prior year and also report on the general and financial conditions of the building.
8. Authorize any agreements to allow a third party the use of the common areas.
9. Authorize, when appropriate, the administrator to issue specific powers of attorney to other individuals who will further represent the condominium. These people may be attorneys or accountants or other professionas representing the condominium as a group.
This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his/her own due diligence and review.