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| Yearly Condominium Meetings.
By Harriet Murray
January 3rd, 2004 |
 The first quarter of 2004 is the time when owners
meet for their annual condominium meetings. Among the
items on the agenda to discuss are the operating budgets
and priorities for the coming year. These meetings,
both general and extraordinary, are very important
to the successful operation of the building. The state
of Jalisco, Mexico has a comprehensive, condominium
law enacted in 1995, which addresses financial details
and voting procedures to protect condominium owners
and their property.
These are my observations and recommendations from
attending a number of these meetings for owners.
The primary beneficiary(ies) named in the fidecomiso
document are the persons recognized to represent the
property in legal matters. If your condominium is in
the name of one of your children or a parent, you must
have a proper proxy from them to vote at these meetings.
If your fidecomiso (trustee) requires that you receive
permission in advance to vote at the meetings, make
sure this done. The administrator of the building many
times is in charge of this important detail. Some fidecomisos
are written that give permission in advance and do
not require special letters for each meeting. If the
person named in the fidecomiso is not attending the
meeting and sending their representative, a proper
proxy form is still required.
If you are going to give someone your proxy, decide
whether you will give to them a general one to vote
as they see fit or if you want them to vote as you
direct on certain issues.
Your administrator should give you ample notice of
the meeting date and time, as well as the agenda for
both the general and the extra ordinary meetings. Take
the time to review this information and plan your responses
or position on these various points. You should already
be familiar with the operating costs of your building
by receiving at least quarterly financial reports.
In the general meeting, with a proper quorum, owners
carry a motion by a simple majority or 51%. An extra
ordinary meeting requires a 75% vote. Owners vote according
to the percentage of common elements they own, which
is described in their fidecomiso document.
If an item is brought up and discussed that is not
on the agenda you received in advance, a vote requires
everyone to decide on this off-agenda topic.
The Jalisco Condominium Law of 1995 also addresses
a format to follow for the meetings. The first order
of business in the general and extraordinary assemblies
is to give recognition to whoever is representing the
ownership rights of each condominium.
A President, secretary and vote counters are named
to conduct the assemblies. The president and secretary
who are chosen to conduct this meeting do not have
to be members of the board, but can be members at large.
If there is a legal quorum, the meeting continues.
There is a system to adjourn and recall within certain
days thereafter, which permits a legal condominium
meeting to be held with a smaller quorum. This procedure
is to allow time for more owners to have representation
or give the owners present the opportunity to hold
a legal meeting.
In the general meeting there are very important items
to discuss and vote upon. The general condition and
running of the building is a major subject of discussion.
The record of income and expenses for the current year
should be discussed and approved or not approved.
The budget for the coming year is to be voted on.
This budget for the coming year should be tied very
closely to the previous year's actual income and expenses.
For this reason, a 12-month record should be discussed
for both the ending year and the coming year. Income
and expenses should be documented and presented by
a very qualified professional. I recommend any condominium
association use a professional, experienced accountant
who is knowledgeable of condo law and accounting. The
accountant should be accountable to the board and the
entire ownership. The accountant and the board of directors
should keep the owners informed and send them quarterly
statements on the financial conditions of the building
Reserve funds are a very important part of the budget.
Many buildings are now adding an insurance policy for
the common area and basic structure in the event of
hurricane damage or an earthquake.
An important standard item of business in the general
meeting is the appointment of the administrator and
his/her salary. An administrator in Jalisco has great
responsibilities and authority. He/she should make
decisions in the operation the building, which are
representative of the philosophy of the board of directors.
The board, in turn, should represent the majority of
the opinion of the entire ownership.
The appointment of the coming year's board of directors
is another very important item for the general meeting.
During the year, the board should communicate closely
with the administrator. The board should have a system
of reporting to the general membership during the course
of the year. The entire ownership should receive reports
on the financial condition of their property.
The extraordinary meeting is held when there is need
to discuss and vote on topics which requires a 75%
vote to be approved. These subjects include any modification
of the condominium bylaws, special assessments, or
legal action against a non-paying owner. The extraordinary
meeting covers an agenda also, and this agenda should
be followed.
When there are important changes approved in an extraordinary
meeting, these decisions need to be formally notarized
and registered in the public registry so as to become
binding to the ownership. If the condominium assemblies
do not correctly give notice of coming meetings or
conduct them properly, any decisions made at these
meetings can be unenforceable.
The Jalisco condominium law is to protect owners from
decisions being made improperly and causing harm to
them, either financially or restricting use or enjoyment
of the property. Even though many owners are absent
part of the year, decisions on the budget and other
topics cannot be properly made without their representation.
You as an owner don't want a large financial assessment
being approved which binds you without first receiving
proper notice and having the opportunity to vote. In
the past, there have been general assemblies held in
other cities than where the property was located. When
a general and extraordinary assembly was held in Guadalajara
regarding a property in Puerto Vallarta, many owners
could not attend and gave their proxy to a few people
who made all the decisions. Assemblies should be held
in the city where the property is located.
Other topics that are important to owners who share
a building are pet rules, vehicles and parking, common
area maintenance, television satellite reception, the
use of the swimming pool, guest rules and privileges.
Condominiums can operate as a condominium regime or
an Association Civil. The decision needs to be well
researched and carefully thought through as to the
legal entity by which the condominium will operate.
A well run, fiscally responsible condominium building
not only makes owners happier but also enhances the
real estate value.
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 conduct his own due diligence and review. Harriet
Murray, Broker
For additional information on properties for sale or
lease within the bay, please call or e-mail me at: harriet@casasandvillas.com
Thanks and until next week.
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