Note: This law approved by the representatives has not yet been published in La Gaceta so it has not entered into force.
The representatives of the Legislative Assembly approved in second debate on April 21, 2006, the bill 22.086, which amends article 27 of the current “Law Regulating Condominium Property” (7.933).
Said article regulates the voting and the scope of the agreements of the condominiums’ HOA’ meetings and the percentage of votes necessary to modify some characteristics of the place.
The reform focuses on paragraphs a and b of this article. Subsection a establishes the changes that can be made only when the unanimous agreement of the owners is reached. These are five: the general destination of the condominium, the proportional area of the subsidiaries (in relation to the total area of the condominium or the area of the common property), waiving the condominium property regime, encumbering or alienating the condominium in its entirety, and varying the clauses of the articles of incorporation or of the condominium and administration regulations.
Achieving the unanimous vote of all the owners is often difficult. For this reason, the approved law will allow varying the proportional area of the subsidiaries and varying the clauses of the articles of incorporation or the condominium and administration regulations to be approved with the votes representing two thirds of the condominium, a minimum that already applies for other purposes such as building new floors or basements and which are grouped in subsection b.
“El Financiero” spoke with Ignacio Alfaro, a lawyer specializing in condominiums and former administrator of such developments, to learn about the implications of these modifications.
For Alfaro it is beneficial that the condominium regulations can now be modified by two thirds and not by unanimous vote, something that already happens in other countries.
“The regulations are lagging behind with social and cultural changes and many times developers do ‘copy and paste’ from other regulations that may not be adequate,” explained the lawyer. Reaching a positive vote of the totality of condominium owners is almost impossible due to low participation, absentee owners, or other reasons.
This change will allow regulations to be more flexible and to be changed more frequently in response to emerging needs.
However, along with the by-laws, the quorum required to make changes in the articles of incorporation was also reduced to two thirds, something that the lawyer considers risky.
The articles of incorporation include the by-laws themselves but also other elements such as easements, if any, description of the subsidiaries, among others. Alfaro commented that this possibility could open the door for a developer to change the characteristics of the project without the agreement of all the inhabitants.
When a person acquires a property within a condominium, he/she owns not only the individual subsidiary, but also the participation in the common areas. If the common areas are reduced, so is the property.
Alfaro commented that it is usual for projects to need to make design adjustments in the course of the project’s life, but he also stated that there should be some percentage limit on the area that can be modified, something that the approved law does not establish.
“I believe that the reform responds to a need but not in a comprehensive manner, thinking about what the effects are going to be,” said the lawyer.
For original article in spanish from “El Financiero” click here