LEGAL MATTERS

Condominium Property Regime
By Omar Pérez Martínez, Ana Paula Telleria Ramírez & Oscar Quiroz Chávez
• Photos by Jesús de Avila • June 2009

Nowadays, the Condominium Regime is an unavoidable reality in Mexican Real Estate Law. Most of people that buy or lease properties destined to residential or commercial ends will find it affected to a Condominium Property Regime.

Therefore, logically, it is important to be responsibly informed about what a Condominium Property Regime is in the state of Jalisco, and the rights, obligations and limits that it entails.

The Condominium Regime is the affectation of a Real Property that results in its division into Private Units –that will be exclusively owned- and Common Areas, which are co-owned by the condominium owners. In this sense, the Condominium Regime is unique in its combination of individual property of the Private Units and common property or co-ownership of the common areas, to which all the condominium owners may use.

In addition to this interesting “co-existence” of individuals and property regimes that at a quick and superficial glance seems to be contradictory, it is also vital before acquiring a Real Estate property affected in a Condominium Regime to be aware of its elements, operational and management as well as the rights, obligations and limits of each Condominium Owner.

How is a Condominium made up?

A Condominium is a real estate property integrated by several Private Units and by common areas and goods used and/ or exploited by every condominium owner.

Each of the Condominium owners are, individually, owners of each of their Private Units that may be: a house, apartment, undeveloped property or a commercial establishment.

The common areas and goods are those located inside the Condominium and that may be used and/ or exploited by every condominium owner within the limits of the Condominium’s Specific Regulations. (For instance, the streets, elevators, cables, water ducts, the sidewalk, the pool and even the events room).

What kinds of Condominiums are they?

Condominiums may be vertical (a building), horizontal, (several houses), or combined, which has both characteristics.

Also, Condominiums may be simple or complex. A complex Condominium is made up of 2 or more Condominiums (within the legal modality of “sub-regimes”, meaning, a Private Unit will alter its property Regime to become a Condominium, and so forth).

What can a Condominium be destined to?

A Condominium is constituted with a specific end in mind. It may be destined for residential purposes, temporary lodging, administrative offices, commerce or services, supplies, storage facilities, workshops and industrial purposes among others.

What are the legal limitations of a Condominium?

No Condominium, either simple or complex, may have an area that exceeds 10 hectares or a population over 2,500 inhabitants. These parameters may be increased in up to 20%.

Which benefits do I gain by being in a Condominium?

The obvious benefit to consider is security.  A Residential Condominium in Mexico has restricted access, due to the fact that its streets are private property of the Condominium owners, thus, third parties can not enter the Condominium freely, which is ideal for monitoring the flux of people that go in and out of the complex.

Also, being in a Condominium allows the owner of the Private Unit to enjoy the Condominium’s facilities (common areas), which an owner of property outside of the Condominium is not permitted to use and generally, not financially able to install them for a particular use. 

How can you affect a regular Real Estate Property into a Condominium Property Regime?

A real estate property may change its regime into a Condominium; however, first we must obtain the suitable permit from the town or city council of the location of the property, as well as approved building plans of the Condominium we intend to constitute.

Once we have those authorizations, the Condominium must de duly created before a Notary Public, in a public deed which must contain, among other requirements, a description of each Private Unit and common areas of the Condominium, as well as the type and purpose of the Condominium (according to what was previously exposed in this article) and the Condominium’s specific Regulations. Said public deed must be registered in the Public Property Registry.

What is an undivided property percentage?

Each Private Unit inside a Condominium has an “undivided property” percentage, assigned to it from the constitution of the Condominium, which determines, among others, the following:

1.- The maintenance payments of the Condominium that the condominium owner must pay.
2.- The number of votes granted in the Condominium Owners Assembly.
3.-  Percentage of property over common areas.

It is important to clarify that, even though a condominium owner is effectively a “co-owner” of a percentage of the common areas, these are NOT susceptible to be independently sold, they are deeply and irreversibly linked to the Private Unit. When you sell a Private Unit, you also –automatically- sell the common areas attributable to it, but not the other way around.

What is a Condominium Owners Assembly and how does it work?

The Condominium Owners Assembly is formed by all of the condominium owners and is considered as the supreme authority of the Condominium’s administration. It generally meets in the Condominium’s facilities, but it can also meet in other place, as long as it is in the Municipality in which the Condominium is located.

The Assembly may be ordinary or extraordinary depending on the issues it will address. An Ordinary Assembly discusses the economic situation and report of the Condominium, the election of the Management Board, of the Condominium’s Administrator and the approval of the income and expenditures budget for the next period. An Extraordinary Assembly deals with more delicate issues like the legal transformation or modification of the Condominium’s regime, the alteration of the Specific Rules and Regulations of the Condominium, improvements or significant changes in common areas and the extinction/termination of the Condominium Regime, among others.

The meeting notice to any of the Assembly must be issued generally by the Condominium’s Administrator, but it may also be issued by the Management Board or a Civil Judge as per request by a group of condominium owners. The meeting notice must contain the meeting’s agenda with every matter that will be submitted to discussion during the Assembly, any matter not included previously in the meeting notice will be void.

Unless otherwise specified in the By-Laws of the Condominium, for an Ordinary Assembly to be legally installed, at least 51% of the condominium owner’s must attend. Also, all resolutions must be agreed upon by the percentual majority of Condominium rights of the owners attending the Assembly (see above explained undivided property percentage). When the above mentioned quorum percentage is not obtained, then another meeting notice must be issued for a Second Assembly which will be legally installed with whatever condominium owners that attend it. 

In the case of an Extraordinary Assembly, there is no legal restriction or minimum attendance quorum for its installment, however, all its resolutions must be agreed by at least 75% of the condominium owners´ rights of the Condominium.

How is a Condominium managed?

The Condominium’s Owners Assembly has the power to appoint the Condominium’s administrator, who may be a condominium owner or a third party, and who will function as the legal representative of the Condominium, with sufficient power of attorney in its behalf to carry out his/her functions in order to maintain the correct administration required. The designation of the administration must be granted in a public deed before a Notary Public through the formalization of the written transcript of the Owner’s Assembly, and thus, be registered in the Public Property Registry.

Besides, there also exists a Surveillance Board which is made up by a group of condominium owners and its function is to supervise the work of the Administrator regarding the finances and maintenance of the facilities of the Condominium. This board must meet at least once a month and deliver a yearly report to the Assembly.

Any other additional authority within the Condominium may be determined according to its needs and regulated in its inner Rules and Regulations.

Is the Administrator obliged to keep records?

Yes, the Administrator is legally trusted to keep the records of the Condominium, regarding the written transcripts of the Assemblies that legally took place, also the written transcripts of the Management Board’s meetings and of all incomes and expenditures of the Condominium.

How do the monthly payments or quotas for the Condominium’s maintenance work, exactly?

The monthly maintenance payments are collected in order to pay for the expenses regarding the maintenance of the common areas, various repairments, security services or any other kind, etc. that the Condominium’s Administration manages.

The exact amount is calculated according to the undivided property percentage of each Private Unit. There also exist extraordinary quotas which seek to settle any expenditure outside of the common administrative payments.

The payment, both of ordinary and extraordinary quotas, is compulsory for every owner, provided such payments are duly authorized by the Condominium’s Assembly and it may cause interests if it is not paid in a timely manner, and even then, it may be constituted as an executive title which will allow the Condominium as an entity to take civil action and judicially demand its payment from the condominium owner.

Furthermore, there is a joint responsibility for the monthly payment, whether it be ordinary or extraordinary, between the condominium owner and those inhabitants or users of the Condominium, under any legal title, as well regarding any other responsibility that may arise from their actions.

Robles, Lazo y Gallardo - Law Firm
E-mail: jgallardo@rlg.com.mx

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• Robles, Lazo y Gallardo, S.C. is a Law Firm of specialists in various areas of Law, including Corporate Law, Real Estate, Immigration, Foreign Investment, among others. The Firm is integrated with a group of highly qualified attorneys and has offices in Guadalajara (Privada del Niño No. 676, Fraccionamiento Camino Real, telephone number 33-3121-3010) and Puerto Vallarta (Carretera a Mismaloya No. 479 interior 107, Edificio Scala. Telephone number 322-223-3218).E-mail: jgallardo@rlg.com.mx

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