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.
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!
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.
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