A large part of the housing market in Mexico, especially in coastal resort areas like Puerto Vallarta, is condominiums. From time to time I answer questions about condominiums in Mexico. Today is one of those times!
Question: I am currently the treasurer of a condo board in Puerto Vallarta. We have some owners who are uncomfortable opening a bank account in Mexico to pay condo dues.
Answer: A foreigner does not need to have a Mexican bank account to pay HOA fees. He/she has an option to send HOA fees in wire transfers from the U.S., Canada or Europe to the HOA bank account.
1. You will need to know how to wire correctly to the HOA bank account. Some Mexican banks have different accounts for receipt of different currencies. Your administrator and board should know the answers to this question.
2. Some enterprising owners buy pesos from their own banks or a national exchange and then wire pesos direct. Most owners do not go this extra step and wire their foreign currency to be converted to pesos when it is deposited into the account of the receiving bank
3. An owner sending U.S. or Canadian dollars will need to ask his/her bank what amount of their foreign currency should be sent to equal the amount of pesos they need to send for their dues. They need to know if the sending or receiving bank has a separate charge, and allow for this extra amount.
4. Each wire will be different in regard to where it is sent from and what the rate is that day. The point is that the HOA or Board should not get involved in setting rates, as these would not be accurate from day-to-day and it is not their business to do this.
Question: What about bank trusts and proxies? I am receiving a number of questions on this issue.
Let me share with you what I understand to be the case:
1. Banks that have fideicomiso departments are trustees of the real estate in the restricted zone. An ancient and very common precept in Napoleonic or Roman law allows an owner to give the ownership rights to another party. This includes in our Mexican fideicomisos the right to purchase these rights, the right to occupy, to sell the rights to another party and the right to leave the rights to heirs. The newer trusts permit the use of the rights for 50 years, renewable.
2. The bank cannot act on behalf of the beneficiary without his/her permission. Some trusts do not automatically give permission for the beneficiary to act on his/her behalf at a condominium meeting regarding the property. In this case, the beneficiary needs to execute a proper letter to represent himself/herself at the meeting.
3. When the beneficiary needs to appoint a proxy, the bank issues a carta de poder letter according to their specfications. They will also state what IDs are required. The proxy holder can attend and vote for the beneficiary at the meeting. Some owners or primary beneficiaries review the agenda in advance and tell their proxy how they wish to vote. Some ask the proxy to attend the meeting and use their best judgement on decisions and votes taken to pass motions.
4. The bank forms will be in Spanish. Foreigners can have it read to them or translated into English to be sure the content is understood. Please remind your owners Spanish is the legal language. English is a courtesy and good translators charge for formal translations.
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.