The country house on a small individual lot or the mansion built on a large tract of land. This type of home ownership has been the dream of many in the Western world where land has been abundant and where the family lived in ONE house and had no other properties for vacation, recreation and retirement.
Changing lifestyles have changed ownership patterns in the last fifty years. Two working parents, single parent families and the growing popularity of multi-family homes have created a high demand for condominium ownership. In these cases, the individual isolated house on a plot has been changed for shared walls, shared accesses, communal recreational facilities and shared maintenance.
When many live together, rules and regulations become important. In Europe and the East Coast of the United States, condominium ownership has been regulated for many years. In the West, the first laws were enacted in 1965, in Canada in 1975, and the first condominium laws in Mexico were enacted in 1972, the same year the bank trust 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 developments of common interest.
In the country of Mexico, this step was very important for Mexico City but also for vacationers from Acapulco, Cancun, Manzanillo, Puerto Vallarta, Mazatlan and Los Cabos. Due to built-in maintenance provisions, it has become the property of choice for vacationers in Mexico who may only spend a few weeks a year in their homes and prefer to spend their time having fun rather than maintenance.
In common interest development, they may be common property assets or common rights that may apply as restrictions against separate property ownership.
For example, the pool, walkways, gardens, and other public areas are common property in many projects. Owners of individual condominium units acquire a proportionate ownership interest in all recreational facilities, as well as service areas, load-bearing walls, and utility elements in the project.
In other developments, developers retained ownership of certain areas intended for homeowner recreational use and common areas are limited to sidewalks, utilities, ducts, and other construction features of the properties.
An example of rights and restrictions against separate ownership would be building or design codes incorporated into the condominium regime that prohibit the sale of window signs, or window coverings or curtains different from those of other units.
The presence of any of the elements; rights or common property, makes the project a development of common interest.
In Mexico, direct ownership of common property is the general rule. This means that certain property in the complex is jointly owned in the undivided interests of the individual owners. As an example, 25 condominium units and a common pool and tennis court, in direct ownership, each condominium owner is the owner of their private space and a percentage of the common areas.
SWISS CHEESE: When the owner sells, leases, mortgages his own lot or condominium, he must include his percentage of the common area. Common property cannot be separated from the individual lot or unit! It’s like Swiss cheese: the owners have a separate interest in the holes and an undivided common interest in the cheese itself.
Common interest in the building will normally include: the foundation, roof, exterior walls, load-bearing walls even if located within the unit, common hallways, fireplaces, exterior doors, windows, and all utilities and pipes, ducts and wiring for them.
The individual owner’s unit will generally include all interior fixtures, improvements, and personal property that is within the three-dimensional block of airspace. This will include built-in cabinets, plumbing fixtures, light fixtures, and interior doors.
THE CONDOMINIUM REGIME:
This is the legal document that must be completed before individual title can be granted outside of the development. It must be done before a Mexican Notary Public and registered in the Real Estate Tax Office and Public Registry of Property.
By law it will contain the Descriptive Memory of the project. This means the measurements and description of the land, of each and every one of the private units and a description of the common property for the entire project.
It must also include the Rules and Regulations of the Condominium.
This part describes the rights and obligations of the condominium owners, defines the type of administration that will be established and contains the rules and regulations necessary to promote the welfare of the community.
Each state has its own condominium law or otherwise relies on the condominium law of the Federal District of Mexico (Mexico City). Article 27 of the law in the Federal District of Mexico provides for an annual meeting of owners. Owners must be notified of the time and date of the meetings by certified mail ten days prior to the meeting date. This notice must also be published in a local newspaper and prominently displayed on the condominium project. If 90% of the owners are not present, subsequent meetings can be called for the same day and those present can make decisions on important issues that will affect all the owners of the complex.
Article 27 of the Condominium Regime Law also provides for voting in proportion to the percentage of common property owned by each owner. Voting must be direct and personal, unless otherwise provided in the Individual Project Regime. In other words, no proxy is allowed unless specifically stated in the law.
A vigilance committee consisting of one to three parties must be elected at an annual meeting and is made up of owners who supervise the work of the administrators.
A reserve fund should be established with funds invested in securities and readily available for long-term required repairs.
Maintenance fees must be paid for all common areas (Swiss cheese) and non-payment may result in loss of unit. The law establishes that legal action can be taken against owners who do not make THREE monthly maintenance payments. Repeated failure to pay fees may result in the unit being auctioned. Even if the owner is not satisfied with the administration of the complex, monthly maintenance fees must be paid.
Absentee owners with properties in a foreign country should take a few minutes to periodically review their resort’s financial reports. Staying in the unit, they should open their eyes and review the state 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. Increasingly, absentee owners are selecting professional management companies to perform all management and maintenance services rather than have these services performed by the HOA or its Board of Directors. This makes sense especially when properties represent a second or third home for owners who are busy and want to spend their limited time in the unit enjoying it…not managing it!