Condominiums are a large part of the real estate inventory in many areas. The price range is wider; so more people can afford this form of real estate. Condominium ownership can require less overseeing by the owner. Some areas have declared a moratorium on new buildings; while growing areas have a number of new projects to choose from. Supply differs in one area to the next.

To protect condominium owners, some states in Mexico have revised their Civil Code to provide a comprehensive description of what condominium ownership means, and how owners can protect their interests.

                          KNOW YOUR CONDO R&RS

It is to the owner's benefit to be knowledgeable in the rules and regulations. It is a mistake to assume that the rules and laws for condominiums are the same everywhere.

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.

                           ESTABLISHING THE REGIME

The developer has to establish a condo regime legally. The public document setting out the rules and regulations for the owners, includes: a description of the buildings, the percentages of individual units in relation to the whole, and the amount of common area. The city requires a warranty from the builder that he will finish the building.

The condo regime also sets out the rules and regulations for the owners to abide by. The owners may amend the rules and regulations. 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.

Everything that has been said about the steps to take when buying property is applicable to condo buyers as well. At this point, we will add the following additional information and suggestions. Laws vary by state.

The following is a general treatment based on the Jalisco law.

Buying a condo may introduce you to some new words and meanings that you may not be familiar with, such as: Asamblea, Comite de Vigilancia, Board of Directors, Bylaws, etc.

                          THE ASAMBLEA ANNUAL

The Asamblea Anual (Annual Meeting) is called for ALL the owners. Together and only during this Asamblea, these owners constitute the Supreme Organ (or Authority) of the building.

All the decisions that must be taken in order to have the building run smoothly, legally, etc., have to be taken and decided upon by the owners attending such "Asamblea".  One has to pay attention to what the bylaws of your building say about it. Some Bylaws will only let the owners attend the Asamblea if their maintenance fees are all paid up. Others may say something else!

 They will constitute the orders to be followed by the Administrator, under the supervision of the Comite de Vigilancia (Security Committee) or Board of Directors.

It is strongly recommended that every owner should be present at the Asamblea. Any and every problem that the building may have, every situation that has to be corrected, every increase in the cost of maintenance, etc. etc., has to be discussed and resolved (decided upon) at the Asamblea. If, for whatever reason, you can't or don't plan to be there, be aware that you're leaving all the decisions about your INVESTMENT in the hands of others.

  If you cannot attend the Asamblea, you may ask your Fiduciary trust bank to draw up a Power of Attorney to grant to another person that will be there. Just be sure that he/she represents you properly and follows your instructions, if any. You have to request that from the bank in writing, and the person that will represent you will identify him/herself with a valid I.D., and present such Power of Attorney before the Asamblea begins.

By law in many states, this Asamblea (Meeting) has to take place at least once a year, and every legal owner must be notified according to the Civil Code of the State they are in, or to the Bylaws of the condominium.

                           THE COMITE DE VIGILANCIA

Amongst the various important decisions taken at the Asamblea(s), are the ones to name the Comite de Vigilancia (Security Committee) or Board of Directors, and the Administrator, as well as any increases that may be needed in the maintenance payments.

A legal Asamblea is one where at least 51 % of the owners are present.  Otherwise, it's not legal and any decision taken in it can be legally contested.

Another important point to know is that at the Asamblea, ONLY the "business" or "topics" inscribed on the agenda can be discussed. If there is a "topic" on the agenda called "various", there may be a discussion about whatever may be brought to the floor (that was not on the agenda), but NO decision whatsoever can be taken with respect to any of the topics discussed in that category.

 It can be postponed to the next year or, if it's important enough and the majority so decides, the owners may reconvene. This time, it will be for an Asamblea Extraordinaria (Extraordinary Meeting) that will take place at the time they decide... but that's all they can do.

In many condominiums, notice must be given 30 days prior to the Asamblea, and must be made public through notices posted in the building, as well as by Certified Mail sent to each owner. Please check your own bylaws!

                           THE BANK TRUST

The Fiduciary trust bank may be present at the Asamblea and can represent owners that couldn't attend. Its presence may enable the needed Quorum of 51 % to be reached, but it will depend on what the Trust of each condominium says about its right to vote in any of the cases presented to the Asamblea.

There may also be cases where the "owners" (Fideicomisarios) will have to instruct the Bank in order to represent them at the Asamblea.

All the cases presented at the Asamblea must be approved or denied by no less than 51% of the owners present or legally "represented.” At some Asambleas Extraordinarias, in which the owners must rule on special cases, a minimum of 75% of the owners present must approve (or disapprove) the motions.

Example: if they want to change the Bylaws. The percentage varies according to the Bylaws of each condominium, and that's another reason why we keep stressing the importance of always reading and checking the Bylaws of the condominium you are in.

                          A QUORUM

If a Quorum cannot be reached even with the presence of the Fiduciary trust bank, and regardless of it, and if the Meeting is held and decisions are made, then any owner may, if he/she wishes to do so, go before a Judge and complain about the illegality of the decisions taken due to the fact that there was No Quorum. This complaint can be presented as a group, or individually.

In these cases, they will have to have the Power of Attorney from the Fiduciary trust bank, in their name. Any other document that they may present will not be valid.

The only way for an "owner" to understand all these provisions is to be well informed about his/her Bank Trust documents, as well as the Bylaws of the building. If one isn't interested in being well informed, then no one will be able to solve any of the problems that may come along, either for the building or for the individual owner.

                          THE ADMINISTRATOR

The members of the COMITE DE VIGILANCIA (Security Committee) are voted upon by the owners present at the Asamblea. They are the ones that will ensure that the decisions taken at the Asamblea are followed completely by the Administrator. The Committee is made up of volunteers.

Legally, the Committee can only supervise the work of the Administrator. It cannot become involved in the running of the building! Also, each of its members has to have a Special Power of Attorney from the Fiduciary Bank in order to be able to occupy any of these posts.

                          TO BUY A UNIT UNDER CONSTRUCTION/NEW DEVELOPMENT

Go to the Notario publico with the Seller and the Promise of Sale Contract, sign it in front of the Notario publico and get his/her signature and stamp with his/her seal on it.

This way, if by any chance the Seller does not complete the building, or the development suffers constant "delays", or they want to increase the price, or come up with any excuse and pretense to extricate themselves from the deal, etc., you will have a Legal Document with Legal Security. And you could always bring a legal action against them.

You can also ask them to deposit a Bond with the Notary, in the same amount you paid to them. This will allow you to recover your deposit in case they back out for whatever reasons they may use.

On the other hand, have also a separate Penalty Clause, similar to the one when buying any property, so that in case that you yourself cannot go through with the deal, the amount you should pay is less than the amount of the Deposit or Advance Payment you gave

                          THE BOARD OF DIRECTORS/COMITE DE VIGILANCIA

It's very important that everyone attend those Asamblea(s) where the Comite de Vigilancia (Security Committee) or Board of Directors and Administrator are to be elected.

Candidates for the Comite de Vigilancia or the Board should possess some understanding of administration and accounting, or at least an open-mind and common sense, as well as a desire to learn about the different laws, customs, and systems of the place in which they are living.

In many cases, their members can also make or break a condominium, as they are the ones responsible for seeing that everything runs efficiently. More specifically, they must ensure that the operation of the condominium is conducted according to the various laws in effect, and in keeping with generally accepted accounting procedures. Also, keep in mind that they are the ones that are supposed to "keep an eye" on the Administrator.

                           LAW CHANGED IN  1995

Again, using the State of Jalisco as example, its Civil Code changed in 1995. In the condominiums that were started and functioned under previous civil codes, the Comite de Vigilancia was a group of owners that would only supervise.

On the other hand, the Jalisco Civil Code in effect today states that these condominiums should add some procedures that appear in the 1995 version, while continuing to apply the other articles of the law and procedures in accord with the civil codes in effect when they were constituted.

In the condominiums constituted after 1995, the Comite de Vigilancia became the Board of Directors, whose members had some rights and legal powers for some judicial acts of the law, which the Comite de Vigilancia did not and still does not have.

The administrator - is the General Manager responsible for running the building and doing everything that the word "management" implies. In Mexico, he also has the legal power (given to him by the Asamblea) to deal with most legal matters.

                           KEEP AN EYE ON THE ADMINISTRATOR

Owners should always look into the honesty, professionalism, ethics, etc., of the person in charge. If, for whatever reasons, a new Administrator has to be hired, he/she should always be found among the prospects that have good recommendations from other jobs they've held, experience with the laws concerning condominiums (as well as others), and a good knowledge of accounting. Needless to say, he/she should be honest, reliable, hardworking, someone that can get along with the owners... and, preferably, someone that really speaks Spanish!

An Administrator, or General Manager as some people call them, can make or break a condominium within a very short time. Pay close attention to - and supervise - the way he/she behavees.

If you've ever heard "horror stories" about administrators "misusing" their legal power... you can believe them! The only possible comment about these situations could be: "Where were the members of the Comite de Vigilancia or Board of Directors?"

Both are responsible!

That's why all the owners should attend the Asamblea (Annual Meeting). It's an investment you have not just a party you were invited to.

                          THE BYLAWS

The bylaws are legally established at the time the first owners get together to organize the administration and management of the building. They MUST be included as part of what is called the "Acta Constitutiva del Regimen de Condominio" (The Condominium's Constitutional Act). These Bylaws are based on the laws of the state, municipality, etc., and include all the suggestions and wishes the owners express in order to have "order" and common grounds for everyone.

                             TIMESHARES

Foreigners should be aware of the risks inherent in purchasing time shares in Mexico, and should exercise extreme caution before entering into any form of commitment to invest in property there.

Investors must recognize the absolute need to obtain authoritative information and even  to hire competent Mexican legal counsel when contemplating any real estate investment. Mexican laws and practices regarding real estate differ substantially from those in the United States.

In resort areas, time-share hawkers are rampant. Beware of the high risks involved, because Mexican law provides very little legal protection to the timeshare owner. If you absolutely must invest in a time-share, do so with full warning and preferably with a stateside company. And be warned that the resale market is extremely poor.