Boards Must Hold Open Meetings

In the “Jalisco Condo Manual,” I say that all board meetings must be open, and that owners must be allowed to come.

So… where is this in the state condo law?

If you’re looking for a specific article in the Condo Law that directly says this, you’ll be disappointed. It’s one of those things that are derived from other requirements in the legislation. We’ll go over these in this article.

The other related issue I want to bring up is that of transparency.

What does the condo Board do?

While this might seem obvious, I’m convinced that many people don’t understand this. Unfortunately, some of them are on condo Boards.

The Board is elected each year for a one-year term by the owners. This happens at the Annual Ordinary Assembly. The Board should be given powers of representation by this assembly – this gives them the ability to act for the condo in legal and administrative matters beyond the condo’s walls.

In simple terms, the Board is responsible, with the Administrator, for looking after the ongoing repair and maintenance of the common property, and carrying out any directives given by the owners at an assembly.

The state condo law says that the Board must: act for the owners in matters of their common interest; make sure that the Administrator complies with his/her obligations; meet at least once a month to examine the state of the condo accounts and their proper entry into the financial records of the condo; and fulfil their obligations together with the Administrator under observance by the owners.

The Board can also have other duties and abilities that are defined in the condo By-laws. However, these must be additional to, and cannot contradict or remove, the duties and authorities given by the state condo law (or any other higher laws).

Why must board meetings be open?

The state condo law clearly says that the Board must work with the Administrator to carry out their obligations under observance by the owners.

Since the only forum in which the administration discusses condo issues and makes decisions about them is the board meeting, it’s rather hard to imagine how this requirement can be met with closed board meetings!

Given this, it also stands to reason that owners must be given adequate notice of the time and place, along with an invitation to be there. While it’s possible that no owners will show up, they must be given the opportunity to do so. If not, they’re being deprived of their legal right to oversight.

Condo records are the owners’ property

Some secretive, non-transparent Boards seem to also want to prevent owners from inspecting the records of the condo. In my opinion, they cannot do this.

The state condo law calls for a minimum of three specific kinds of records to be kept as part of the condo’s permanent records: minutes of all assemblies, with attachments; minutes of all board meetings, with attachments (financial and other reports, quotes, letters, emails, and all other documents presented or discussed at the meeting); and financial records of all income and expenses. By law, these financial records must be up to date within 15 days after the latest expense has been paid.

These records are the property of the condo, and not the Board or the Administrator. Both the Board and the Administrator are transient (they each serve a one-year term), and the Administrator must turn over all condo records in his/her possession to their successor.

As condo property, the records are the property of the owners (since the condo cannot own anything). Owners cannot be denied access to property they co-own.

What’s transparency?

Although not yet reflected in the condo law, transparency is the cornerstone of modern administrative practice.

In Mexico, recent legislation has imposed an impressive transparency model on both the federal government and non-profits. State governments are rapidly following this lead, and at least one municipality (Tlajamulco) has passed ground-breaking transparency legislation.

Although governments are taking the lead with this, a move towards greater or full transparency should be the goal of every administrative body (such as a condo board).

The ideal of transparency is that all decisions to be taken by an administrative body must be placed under scrutiny by its stakeholders, and in the widest possible sense. A condo board is an ideal candidate for this goal, since it’s much more similar to a municipal government than to a corporate body.

Great! However, understanding transparency is much easier than carrying it out. Many administrative bodies have fallen into set routines, even if they are against the law.

To some, the appeal of a culture of administrative secrecy is high. Especially to those personalities who enjoy exercising power and control.

Laziness is also a significant element. It takes more effort to make sure that the rationale for decisions is recorded, that supporting documents exist in the records, and that everyone has access to this data.

In the 21st century, no one disputes that transparency is essential to modern democracy (yes, a condo is a democracy). Unfortunately, many people only fully support transparent practices up until they have to follow them.

All this is especially true of condo boards. This status quo is a very difficult thing to change. The administrative culture in many condos directly contradicts the concepts of transparency.

Building transparency for owner oversight

Since the goal of all condo boards should be to administer their condo in a transparent way (owners should be very concerned if this is not the case!), there are steps a Board can take to go beyond the bare necessity of giving owners oversight.

For example, a Board should include an Agenda for each board meeting with the meeting notice sent to the owners. Following good practice for effective meetings, an Agenda should have been prepared before the meeting for the board members anyway (so that they can prepare for the meeting). It’s just a matter of distributing it more widely.

This also gives the owners an opportunity to have items put on the Agenda for discussion by the Board. Many Boards forget that they’re elected by the owners to represent their common interests. The Board cannot ignore valid concerns of owners.

It’s also a good idea to send out a draft of the board meeting minutes to the owners (by email, or posted on the condo web site) as soon as possible after the meeting. These should include all attachments, just as they will be entered in the condo records.

This lets those owners who couldn’t be there (especially those who were out of the country) know what was discussed at the board meeting, and what decisions were made. Apart from increasing transparency, this also guarantees that oversight by the owners, as required by law, is possible for those who could not physically be at the board meeting.

The state condo law requires the Board to meet at least once a month to receive the Administrator’s monthly financial report, and to verify the state of the condo’s accounts and their correct entry into the condo’s financial records.

Beyond being a legal requirement, this is an excellent and necessary management tool so that the Board can monitor the actual expenses of the condo vs. the budget approved by the owners. If condo finances start going wrong, this trend can be identified, and corrective measures taken, before it gets out of hand.

This financial report must be attached to the minutes of the monthly meeting in which it was presented, both for the permanent condo records and the owners inspection (that pesky oversight again!).

While the condo law only says that the quarterly financial report must be made available to any owner who requests it, I recommend that these reports should also be automatically sent to owners either by email or posting it on the condo web site. This extra step is proactive, and goes towards achieving the goal of transparency. Besides, the financial report shows how the Board is managing the owner’s money, and there certainly should be nothing to hide!

Summary

By law, the board and Administrator must carry out their duties under the observance of the owners. Condo records, of which board meeting minutes and financial reports are a part, are the owners’ property, and owners cannot be prevented from accessing them.

In my opinion, this means, at a minimum, holding open and announced board meetings, and making the minutes of these meetings available to the owners.

I also strongly believe in going further than this minimum to create an administration that is as open and transparent as possible. This costs nothing, increases the sense of community (which a condo is!), and contributes to a feeling of inclusiveness by the owners. That should be what everyone in the community wants.

WARNING: Rant Ahead!

This next bit is a bit harsh. However, this is something I feel strongly about…

In my opinion, we all must question the motives of those who want to run a community by a secretive body, with closed meetings and little or no owner oversight. If this happens, it isn’t at all unreasonable for owners to wonder, “What are they hiding?”

I feel that this practice not only goes against the intent of the law, but creates an unhealthy and adversarial relationship between the Board and the owners whom it serves.

I know of no rational reason to leave owners out of the process of administering their own property. Nor can I imagine any legitimate business operation or process associated with the management of a condo that should be hidden from the owners. Certainly, I’ve yet to hear any reason for this behaviour that makes sense.

Garry Musgrave
Writer of books about running a condo in the Mexican state of Jalisco, and following the state condo laws. Also the laws and processes involved in buying and owning real estate in Mexico. Author of the "Jalisco Condo Manual" and the "Jalisco Condo Law in English." His web site: JaliscoCondos

17 Responses to Boards Must Hold Open Meetings

  1. Gary…………..nice piece and thanks for continuing with this crusade ? of yours. Best Wishes, Paul East R.

  2. Thank you for this reminder! I do have a related question that has arisen in our condo community. Although our board definitely has open meetings, with a request for agenda topics in advance, and an agenda published in advance, some homeowners repeatedly raise topics at the Council meeting itself … and insist on their right to do so, and to have an immediate response (vote or policy decision) by the Council. Please comment on whether “New Business” on an agenda means that topics can (or cannot) be raised anew at the meeting by homeowners (or, for that matter, by Councillors).
    Thank you! Karen

    • While owners definitely have a right to attend council meetings, and the right to bring issues to the Council, they do not have the right to disrupt the meeting, nor to demand instant results.

      Council meetings are exactly that… meetings of the Council. The owners are there to observe, and are not participants. They must address the Council in a respectful and businesslike manner, and they must follow standard meeting practices for speaking and being recognized by the Chair (normally the President of the Council).

      Unfortunately, some people seem to want to exercise their rights in a rude and confrontational way. The Council does not have to put up with this. I’ve written another blog post (and an entire section of the “Jalisco Condo Manual”) that talks about dealing with difficult people.

      It is up to the Council to decide how to deal with any concerns an owner raises at a meeting. This may range from dismissing the issue (after giving a reasonable explanation as to why), dealing with a simple issue then and there, or putting a more complex issue forward for more study.

      The Council shouldn’t allow itself to be pressured into making a quick decision on a complex issue without proper study and debate. By the same token, it should not dismiss outright legitimate issues that should be dealt with, nor should putting an issue forward for more study become an excuse to ignore the issue.

      In all three cases, the issue and the action must be minuted.

        • You’re welcome. In re-reading your comment, I realise I missed a second question regarding a council meeting agenda.

          Firstly, this is an agenda, and not an Order of the Day as is used with an assembly. While an Order of the Day is carved in stone, and an assembly cannot deviate from it, a meeting agenda is in DRAFT form until adopted at the start of the meeting.

          By publishing the Agenda with the meeting notice (which you do!), you also have the opportunity to ask owners to submit any items they’d like to see added under “New Business” in advance of the meeting. The beauty of this is that these owner suggestions will be in writing.

          The first order of business for a standard meeting (after the Call to Order) is Approval of the Agenda. This is where both owners’ and Councillors’ concerns that weren’t on the distributed Agenda can be added under “New Business.”

          If owners submitted issues in advance of the meeting, this is the point where they’re added. Owners who didn’t do this, and are present at the meeting, must respectfully and politely ask to add their concerns to the Agenda at this point, and then wait until they come up under “New Business.”

          Once the Agenda has been approved and adopted, then the meeting follows it.

          Just one point about transparency again. Some unscrupulous Councils will leave an item off the distributed Agenda that they fully intend on discussing at the council meeting. They then add this while the Agenda is being approved. This is an abuse of process, intended to hide the issue from owners when the Agenda is distributed with the meeting notice. Definitely neither fair nor transparent.

  3. UPDATE: I have received a few emails asking for the specific article that calls for the Board to carry out its obligations under the observance of the owners.

    The main article that spells out the key duties and obligations of the Board is a the multi-part Article 1017.

    Part V of this article says that the Board must, “Work together with the [Administrator] under observance by the condo owners of the performance of their [Council and Administrator] obligations.”

    For those who may not trust an English translation, the actual Article 1017.V says, “Coadyuvar con la administración en la observancia por los condóminos del cumplimiento de sus obligaciones.”

    In my opinion, this article is clear and straightforward.

  4. Our condo regime document states that the Board of Directors meeting must be within the city of Puerto Vallarta, where the condominium is located. Our past three boards, the first appointed by the builder, have had few meetings in Puert Vallarta. Almost all are held in Guadalajara where most Board members actually reside. When I challenged the location of the meetings and requested to attend a board meeting, I was informed by the board that I could attend, but they would be held in Guadalajara. Is there any way to force the board to abide by the condominium regime document? I reside for eight months of the year in my condominium in Puerto Vallarta and my traveling to Guadalajara to attend a meeting (as an owner) is not possible, nor should I have to do this under the regime document.

    In mid-April of this year I requested the financial records of the first quarter of 2014. It is now October, and I have not received anything. How does an owner actually get the information that is required by law?

    • If, as you say, this is a requirement in the by-laws that were part of your escritura constitutiva, and if these have not been modified since by an Extraordinary Assembly, then the board meetings should definitely take place in PV. Apart from this, this is just more practical.

      So… what can you do if the administration refuses to follow the condo’s by-laws, or refuses to supply financial statements as required by law?

      The first thing you might consider is getting together a slate of board candidates (who don’t live in Guadalajara), and run for election to the Board at the next Annual Ordinary Assembly. Make sure you have grass roots support for this in your condo (there are likely other owners who don’t appreciate this situation).

      The other thing you can do is bring forward a law suit. This, unfortunately, is very time-consuming (possibly a couple of years), and could be expensive.

      An alternative to this is to hire a lawyer to represent you at a mediation hearing at the IJA (Institute of Alternative Justice). This is a fast and efficient process. There’s an IJA in PV at Calle Corregidora 533 interior 6 in the colonia Barrio Santa Maria. The IJA will issue an invitation to the person you name (likely the Board President), and a lawyer at the IJA will try to settle the issue between the two parties. Any resulting agreement is legally binding, and has the same force as a court order. If the other party refuses to participate, you will get a document from the IJA stating that you tried to mediate and the other party refused. This document will be looked upon in your favour by a judge in any subsequent law suit.

  5. I am an owner in PV and our administrative group asks for resolutions but then provides no report or inadequate reports on the actions taken, the costs involved, and any contemplated next steps. Further the administration refuses to provide timely and complete reports on the financial circumstances of our Condo group/HOA. Recently 4 of them ( 2 households out of 16) decided they wanted playground equipment. This came up at a previous annual meeting and was NOT approved. Despite this the group/gang of 4 bought 17000 pesos worth of playground equipment, without any resolution or authority from the owners at any properly constituted meeting and now–again–is demanding the owners pay a special assessment. Initially the funds came out of our reserve fund. Are reserve funds trust monies? Does Mexican law recognize a condo trust fund? Frankly I do not trust these people with my money–not anymore.
    They will not provide any reconciliations of the bank account, nor will they even give me a statement of my maintenance payments that have been made.

    Can you comment on this?

    I am going to order your book but it will not arrive before I leave for PV. There are 3 ex-pat ( non-resident) families in our small condo association 16 households–3 non-payers — and we are of the view that we are being railroaded. None of us is fluent in Spanish.
    Also can you recommend a bi-lingual lawyer in PV. We need to protect our property value.

    • The way you describe it, this sounds like a bad situation.

      A Board cannot hide what they do in board meetings and the decisions they make. Minutes of the monthly board meetings are a requirement of state law. These must be placed in the condo records. The condo records are the jointly-owned property of all owners, and cannot be kept from an owner.

      A board absolutely cannot impose significant improvements without the approval of 75% of the entire condo rights at an Extraordinary Assembly. In my view, $17,000 is significant. If they do this, and impose a special assessment to pay for illegal improvements, you should have every right to refuse to pay the assessment. Their only recourse is to sue you for the money, and they should lose because the basis for the assessment is illegal. span style=”text-decoration: underline;”>IMPORTANT NOTE: this ONLY applies to a special assessment for an illegal improvement, NEVER refuse to pay ordinary fees that were established and approved at the Annual Ordinary Assembly.

      State law does not dictate how Reserves are to be used. Condominium industry convention is that they are to be used for long-term and emergency repairs and maintenance. It is good to have the proper use of your reserves spelled out in your by-laws. This eliminates the potential for abuse.

      There are really only two options open to an owner (or group of owners) who object to the way their condo is being administered.

      1. Run for the Board and change things from within the administration.

      2. Sue the Board if you believe they are acting illegally.

      For more detail, refer to my reply on 2015/05/08 to the comment posted by Paul Teas.

      • Thank you very much for your response.

        As of March 24, 2015, an independent administrator was appointed and appears to be acting in the best interests of all. I have requested, but not received, a copy of the minutes from that meeting. Beyond a simple and polite request for a copy–must I determine where the minute book is kept and attend at that place in person to actually see the minutes?

        In addition, the year end and supplemental accounting that was sent to all owners was incorrect and failed to show maintenance payment credits. I have asked that:

        the accounting records be rectified ( the payments have now been acknowledged–2 and a half months later– after multiple deliveries of proofs), and;

        the rectified accounting be sent to all owners, as was the initial accounting.

        I believe this is appropriate, otherwise, it leaves an inaccurate impression that the fees were not paid when they were. Do you have any comment?

        I received your new book yesterday and have read most of it–very very helpful Thank you again.I will be recommending it to all my non-Mexican owners. The others would also be greatly assisted in reading it.

  6. That is great information and the wording is very clear. However, the question that warrants answering is simple: what consequences have been visited on Boards that have not complied with Article V that states “under observance by the owners”? Has there been any judgments by Mexican courts levied against Boards given their refusal to comply with this section of the Code? If there have been such judgments, please cite the case(s) so that they can be located, perused, and referred to in order to encourage Boards to comply with the Law.

    • I don’t know personally of any such judgements. If you come across a successful judgement or suit against a condo board please let me (and the readers of this blog) know.

      Unfortunately, suing a board is a lengthy process, and most owners can’t be bothered.

      One alternative to consider is to hire a lawyer to represent you at a mediation hearing at the IJA (Institute of Alternative Justice). This is a fast and efficient process. There are IJAs in Guadalajara and PV. The IJA will issue an invitation to the person you name (likely the Board President), and a lawyer at the IJA will try to settle the issue between the two parties. Any resulting agreement is legally binding, and has the same force as a court order. If the other party refuses to participate, you will get a document from the IJA stating that you tried to mediate and the other party refused. This document will be looked upon in your favour by a judge in any subsequent law suit.

      • Thanks for the feedback. In Canada and the U.S. several companies publish the outcomes of court cases. In addition, they provide a search engine so that cases that fall under search criteria can be easily located and read. In the state of Jalisco, are there companies that provide this service.

        If there are no companies that provide such service is it because “stare decisis” or Case Law has little relevance in countries that follow the Napoleonic Code. In essence, do Mexican courts rely on Case Law to argue cases as in the situation in other judicial cultures such as England, Canada, and the U.S.?

        • I don’y know if there’s a compilation of judgements that can be searched. Probably not.

          You are correct… one of the main differences between civil law and common law (the legal system used in the UK, many former British colonies, and most of Canada and the U.S.) is reliance on case law. With only a few exceptions involving the Supreme Court, case law is not used in a civil law system such as Mexico’s. Each case is decided independently by a judge based on the written submissions from each side.

          With the coming adoption of oral trials, and, possibly, jury trials, this might change. Or might not.

  7. Garry, can you discuss the difficulties of a condo board where most members do not live full time at the condo but are there for 2-3 months. Meetings take place by Skype.

    Can a council have directors that vote and advisors that have no vote? Is there an advantage to having advisors? Can an advisor sign cheques when council members are away for the season?

    • You definitely should try to get some permanent residents on the Board, as well as the part-timers. This situation can be difficult.

      Attending meetings by Skype or speaker phone is perfectly acceptable, and is certainly part of the solution.

      Cheques often require two signatures: the Administrator plus any one board member. If you have at least one full-time board member, this problem should be solved.

      I don’t see why you can’t have advisors, although this position (and its requirements, duties, and restrictions) must be spelled out in your by-laws. Personally, I don’t see the point. Why wouldn’t they just be on the Board?

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