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Sunday December 17 2017
Legal Aspects of Living in a Condo
Author:
Linda Neil and Gisela Talamantes - 2009


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The cottage on a tiny individual lot or the mansion built on a grand expanse of land. This type of home ownership has been the dream of many in the Western world where land has been plentiful, and where the family lived in one home and did not have other properties for vacations, recreation and retirement. Changing life styles have changed ownership patterns over the past fifty years. Two working parents, single parent families, and the rising popularity of multiple family homes have created a great demand for ownership in condominium. In these cases, the individual free-standing dwelling on a lot has been exchanged for shared walls, shared entryways, communal recreational facilities and shared maintenance.

When many live closely together, rules and regulations become important. In Europe and the east coast of the US, condominium ownership has been regulated for many years. In the west, the first laws were enacted in 1965, in Canada in 1975, and, in Mexico, the first condominium laws were published in 1972, the same year the bank trust (fideicomiso) law was enacted. In 1985, California’s Davis-Stirling Common Interest Development Act became a model for the rest of the western world. In the same year, Mexico updated its condominium law and enacted the establishment and operation of common interest developments.

This step was highly important not only for Mexico City residents but also for vacationers in Acapulco, Cancun, Manzanillo, Puerto Vallarta, Mazatlan and the rest of Mexico. Because of built in maintenance provisions, the condominium has become the preferred type of ownership for vacationers in Mexico who spend only a few weeks a year in their homes and prefer to spend the time in fun rather than in maintenance duties.

In the common interest development, either commonly owned property or common rights may be enforced as restrictions against separately owned property. For example the pool, hallways, gardens and other public areas are commonly owned property in many projects. Owners of the individual condominium units acquire a proportional ownership interest in all the recreational facilities, as well as in the service areas, bearing walls, and utility features of the project.

In other developments, the developers retained ownership of certain areas destined for recreational use by the condominium owners, and common areas are limited to the sidewalks, utilities, ducts and other construction features of the properties. An example of rights and restrictions against separately owned property would be the building or design codes which are built into the condominium regime which prohibit for sale signs in windows, or drapes and window coverings different from those of the other units.

The presence of either element - rights or commonly owned property - makes the project a common interest development. In Mexico, direct ownership of the common property is the general rule, meaning that certain property in the complex is owned in common in undivided interests by the individual homeowners. Each condominium owner owns his or her private space and a percentage of the common areas.

When the owner sells, leases, or mortgages his own lot or condominium, his or her percentage of the common area must be included. The common property cannot be severed from the individual lot or unit. It is like Swiss cheese: The owners own a separate interest in the holes and an undivided interest in common in the cheese itself.

The common interest in the building normally will include the following: the foundation, roof, exterior walls, bearing walls even if located within the unit, common hallways, chimneys, exterior doors, windows, and all utilities, pipes, and ducts. The individual owner’s unit will generally include all interior fixtures, improvements, and personal property which is located within the three dimensional block of airspace such as cabinets, plumbing fixtures, lighting fixtures, and interior doors.


The Condominium Regime
This is the legal document that must be completed before an individual title can be granted out of the development. It must be made before a Mexican Notary Public and registered in the Property Tax office and Public Registry of Property. By law, it will contain the Descriptive Memory of the project, which includes the measurements and description of the land -of each and every private unit- and of the common property for the entire project.

The Condominium Regime must also include the Condominium Rules and Regulations, which outlines the rights and obligations of the condominium owners; it defines the type of administration to be in place, maintenance fees, conflict resolution, and the necessary rules and regulations to promote the well-being of the community.

In 2007, the state of Baja California Sur finally enacted its own Condominium Regime Law. Previously, the Condominium Regime in Baja California Sur followed Mexico’s first condominium laws published in 1972. The million-dollar question became: What if the condominium regime of my development was constituted before the new law came into force? What law applies to my Regime today; those of 1972 or of 2007?

The new law states that condominium regimes constituted before the new law will continue to follow the charter of incorporation and the Rules and Regulations for the project. However, modifications to the regime made after the new law came into force will have to follow and comply with the law of 2007.

Article 32 of the new law provides for an annual meeting of homeowners when the General Assembly is composed of a majority of foreigners. It also provides for voting in proportion to the percentage of common property held by each owner, with a few exceptions where each unit of exclusive property will have one vote. Voting must be direct and personal but the Condominium Rules and Regulations may allow representation at the meetings through a letter signed before two witnesses. In other words, proxies are permitted if stated in the Condominium Rules and Regulations. This is very convenient for owners who travel frequently or who have their main residence somewhere else. Another addition to the new law relevant to foreign owners is the possibility to allow the electronic vote via email or teleconference.

Article 35 states that the General Assembly may establish maintenance fees and a reserve fund. Failure to pay either by an owner can mean suspension of their right to vote while they are delinquent in payments. The basis to determine the maintenance fees and reserve fund amounts should be outlined within the Condominium Rules and Regulations. Said payments may be divided monthly and unpaid fees may accrue interest.

Maintenance fees must be paid for all common areas, and failure to pay can result in loss of the unit. The law provides that legal action may be taken against homeowners who fail to make three payments of monthly maintenance fees. Repeated failure to pay fees can result in putting the unit up for auction. Even if the homeowner is not happy with the administration of the complex, monthly maintenance fees must be paid.

Absentee owners with property in a foreign country should spend a few minutes to review the financial reports for their complex on a regular basis. When staying in the unit, they should open their eyes and review the condition of the complex. Is it well maintained? Or is maintenance being deferred? This will affect the value of the complex, and the value of the unit. More and more, absentee owners are selecting professional management companies to perform all administration and maintenance services rather than having these services performed by the Homeowner Association or its Board of Directors. This makes sense, especially when properties represent a second or third home for the owners who are busy and wish to spend their limited time at the unit enjoying it rather than managing it.

 

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