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  • Unconstitutionality of Article 1032

    The issue…

    In my last post about the delay in publishing the “Jalisco Condo Manual – Second Edition,” I mentioned that a higher court in Jalisco had found that Article 1032 of the Jalisco Civil Code was unconstitutional. I’ve received a surprising number of enquiries for details about this, and thought it easiest to deal with it in another blog post.

    Article 1032 is the civil code article that allows a condo to petition a judge to sell a unit at public auction if the owner repeatedly fails to pay fees, or violates other obligations.

    How we found this out…

    A condo decided to sue a particularly intransigent delinquent owner, and to rely on Article 1032 to rid the condo of the problem owner. This type of lawsuit is usually faster than a typical suit for recovery of a debt. However, there were unusually lengthy delays in getting the documents reviewed and approved by the judge.

    Working through a Guadalajara lawyer, we discovered that the local court had never had a suit like this before. In the past, local area condos had always just sued for the money owed. The judge, being unfamiliar with this article and its procedures, wanted more information before proceeding with the suit and the auction.

    The lawyer did some searching in court records in Guadalajara to find an example case the judge could review.

    He uncovered a case where a condo had successfully sued under Article 1032. The owner of the unit (a lawyer) had launched two appeals, which were denied. The auction was ordered to proceed, and a buyer was found. The owner launched one more appeal, and was, unfortunately, successful!

    The argument he used in this final appeal was that, the way Article 1032 is written, it precludes the owner from presenting a defence.

    The constitutional problem…

    Article 1032 just requires the condo to petition a judge with sufficient documentation, and if it has proven that it is a properly constituted condo, the identity of the titleholder, and that a repeated violation has occurred, the judge will then order the property to be sold at public auction. There is no provision in this article for any submission from the owner.

    Article 14 of the Mexican Constitution establishes the key legal principle of Seguridad Juridica (Legal Certainty). When the state seeks to use privation against someone (the act of taking away property or rights), this can only be done by means of a trial held in front of the courts. There can only be a judgement imposed against the defendant if they are allowed to contradict that which they are accused of, or that which is demanded from them, and that they be allowed to defend their interests.

    All laws passed in México must comply with this basic principle, and because Article 1032 doesn’t allow for this (because it has a defect in its wording), the higher court deemed it unconstitutional.

    History of the case…

    The case in question occurred in the Ninth Civil Court in Guadalajara. The lawsuit was admitted, and, following Article 1032 of the Civil Code and the corresponding civil procedures, the Judge gave the defendant a 5-day term to name his property appraiser. The defendant did not accomplish this. The defendant challenged the decision of the court, and the judge denied it, based on the way Article 1032 was worded.

    The defendant then filed an amparo lawsuit (a type of injunction on constitutional grounds) saying that Article 1032 violates his human rights. The judge for the amparo suit did not grant a hearing because he felt that the procedural stage of the lawsuit did not permit such an appeal.

    The Judge, following the rules in Article 1032 and the associated civil procedures, received appraisals from the condo and from a court-appointed appraiser, and established the value of the property. The Judge then ordered that the property be put up for auction following the auction procedures set out in the Code of Civil Procedures.

    A person was interested in buying the property, and presented an offer of purchase to the Judge. After publishing the required proclamations, they won the auction sale, and the property was ordered to be transferred to them as the new owner.

    Later, the defendant filed another amparo to revise entirely Article 1032 to comply with the constitutional principle that obliges the laws of all States of the Republic to not violate the Constitution. The judgement of the Fifth District Court in Civil Matters found that this article does violate the principle of a hearing, since the article does not allow the defendant to be heard in a trial before receiving a judgement. This higher court ordered the judge in Guadalajara to abandon without effects all judicial acts in that judgement.

    You can find the details in “Juicio de amparo indirecto 213/2012-III” (Judgement of Indirect Amparo 213/2012-III) published by the Juzgado Quinto de Distrito en Materia Civil en el Estado de Jalisco (Fifth District Court in Civil Matters of the State of Jalisco) on March 8, 2012.

    The ramifications…

    It is important to understand that this ruling does not change the Civil Code, nor does it create new law. Article 1032 still exists as written.

    However, if you use the procedure outlined in this article to sue a delinquent owner, and that owner appeals using this constitutional argument, you will likely lose your suit, and will have to pay the delinquent owner their legal costs, as well as being out of pocket for your own costs. If, as was the case for the Guadalajara condo, the case had proceeded to the auction stage, these out of pocket legal costs combined with the paid-out costs for the defendant were substantial (I believe about $70K to $80K pesos).

    Until the state Congress rewrites this article, and modifies the Civil Code, a condo’s best approach may be just to sue the owner for the unpaid fees as a debt.

    The problem with this is that, depending on the back-log of cases in the local court, this could take 1-1/2 to 2 years. It’s unlikely such an owner would pay fees during the duration of the suit. Therefore, if you won, you’d likely then have to initiate a new suit to recover these new unpaid fees. And on and on…

    The ideal, in my opinion, is what was intended by Article 1032 – removing the problem once and for all.

    As I mentioned in my last post, we have a modified suit before the courts now that we hope will accomplish this goal, but which we hope cannot be overturned using this constitutional argument. Unfortunately, we don’t yet know if it will succeed. Once it has concluded, one way or another, I will include all the details of what we learned in the “Jalisco Condo Manual – Second Edition.”

    We also intend to work to lobby the state legislature to make the necessary changes to the wording of Article 1032 to make it comply with the Constitution. Although they are continually updating and changing the Civil Code, this issue is likely not high on their list of priorities. We hope to change this, and get it on their radar. However, this is a future project…

  • Status of the “Jalisco Condo Manual – Second Edition”

    The “Jalisco Condo Manual – Second Edition” was originally scheduled to be published in July, 2015. Unfortunately, there has been a significant delay in this new edition because we need to include details from two ongoing and important issues:

    1. We are currently walking a condo through the entire process of SAT registration, bank account set-up, contracting of an accountant, and regular financial reporting – to be sure they fully comply with the new tax laws. Once this is done, we’ll have a detailed real-world guide on how to do this for the new edition of the book. Not surprisingly, this is taking longer than expected.

    2. A high court in Jalisco has ruled that Article 1032 (that allows a condo to sell the property of a delinquent owner at public auction) is unconstitutional as written. Because this is such a key article, as well as a vital weapon in a condo’s arsenal against delinquencies, this has significant impact on how to sue a delinquent owner. We are walking a test case through the Jalisco courts with a modified method of suing that we believe circumvents the legal problem. Once we figure out how this can be done successfully, with the end result being the removal of the delinquent owner from the condo, we’ll include complete details and procedures in the new edition. The case is progressing well, but such things always take longer than you might expect.

    Since these are both vital issues affecting condos, we have decided to wait until we have all the information before completing the new edition. This will make the new book much better and more relevant! Unfortunately, at the time of writing this post, we are still a few months away. We believe that the finished product, however, will be worth the delay.

    We hope you understand, and thank you for your patience.

  • “Jalisco Condo Law in English – Second Edition” Has Been Released!

    condo_law_cover

    This is an updated version of the first edition published in 2011. It has improved translations plus six new sections with 80+ more pages of even more laws relevant to the administration of a condo. It includes the new 2014 tax laws!

    Since the first edition was published in June of 2011, legislation has been amended, and we’ve discovered more laws that are relevant to condo administration. We’ve also improved the translation and notes of the existing chapters based on experience, plus feedback and questions from users of the first edition.

    Throughout the book, text and translations were edited for more clarity and additional detail; pronoun references were improved; inline notes in the translations were added or expanded to more fully explain concepts of legal terms and processes; and typefaces were changed to make the book easier to read.

    Six new sections were added with new translations of relevant laws:

    1. Part 5 – Obligations of Neighbours: contains rules in the Jalisco Civil Code that neighbours living anywhere (inside or outside of a condo) must follow.
    2. Part 9 – Legal Signatures & Electronic Transmissions: contains the Jalisco Civil Code definitions of a legal signature, and articles that allow proxies to be emailed or faxed.
    3. Part 11 ‐ Limitations on Collecting Debts: contains the Jalisco Civil Code section that restricts collecting fees from delinquent owners to two years.
    4. Part 12 – Income Tax & IVA: contains the 2014 federal laws governing the income tax, bank account, and IVA (value added tax) obligations of a condo.
    5. Part 13 – Rules for Public Property Auctions: contains the state laws governing the public auction held when a condo has forced the sale of a property under Jalisco Civil Code Article 1032.
    6. Part 14 – Preventative Injunctions for Lawsuits: contains the state laws governing methods of protecting the condo’s interests when forcing the sale of a property by preventing title changes, liens, mortgages, or other encumbrances during the process.

    Significant edits and improvements were also made to many other parts of the original text.

    Special Upgrade Offer for purchasers of the First Edition

    If you bought a copy of the First Edition of the “Jalisco Condo Law in English” in the last year, you might be entitled to either a free copy, or a significantly reduced price on the Second Edition.

    For more info on buying this book, ordering it in Mexico, or upgrading from the First Edition, check out the “Our Books” section on our new updated website: jaliscocondos.org

    This book is also available on Amazon by clicking here.

    Further News…

    The “Jalisco Condo Manual in English – Second Edition” was rated a #1 Hot New Release on Amazon!

    amazon_hot_new_release
    Another updated book: The “Jalisco Condo Manual – Second Edition” is expected by July 2015.

    Coming Late This Year – we’re launching an exciting new development for condo owners and administrators – an online version of the “Jalisco Condo Law in English – Second Edition.”

     

  • 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.

  • How to Satisfy the Legal Requirement of a Minute Book for Board Minutes

    Why do you need to keep board minutes?

    Your condo is required by Article 1012 of the Civil Code to keep minutes of every council (board) meeting, along with their attachments. These minutes are an important part of your condo’s records that:

    • are a permanent and legal record of the proceedings of each board meeting;
    • record the decisions made by the Board, how they were made, and any resulting actions taken by them;
    • clarify what happened at a meeting for those who weren’t there;
    • document actions that are required to fulfil the board’s legal duties;
    • help orient new board members and owners to past issues facing the condo; and
    • are a useful management tool for evaluating the work of the Board.

    Legally, minutes can be inspected by owners, and used in court as evidence. As legally required official records, courts can consider the contents of board minutes when deciding a lawsuit.

    Minutes can be used to prove that board members fulfilled their legal obligations (such as meeting once a month), and have carried out their duty of care to the condo. A condo Board’s duty of care to the owners has at its core: active, informed, conscientious, inquiring, and impartial service. Therefore, board minutes can show that a board or committee took reasonable steps to be informed, and to carefully consider relevant issues before making a decision.

    What form must your board minutes be in?

    This article of the condo law also says that board minutes must be kept in a bound minute book signed on its first page by the municipal government. Such books are readily available at papelerías (stationery stores), and are designed to have hand-written entries (although this isn’t a requirement of the law).

    While this might seem odd, it’s not at all unusual. Some regional legislation north of the border calls for similar practices in association and corporate statutes.

    The intent of this requirement is simple: minute books have bound pages as a reliable way to prevent tampering (such as changing the minutes after they’ve been approved).

    In the 21st century, there are disadvantages to this requirement:

    • most people today prefer to use a notebook or tablet, and not to hand write anything;
    • it’s impossible to circulate DRAFT minutes to the meeting participants for review and comment; and
    • hand-written minutes are often not legible, and can’t be reproduced easily or well.

    Electronic devices are excellent and efficient tools for minute taking because they make editing, copying, and sharing of the minutes easy. How, then, can we reconcile modern technology with the aims of the condo law?

    While minutes could be taken electronically, edited, circulated in DRAFT, and sent to owners (or posted on a web site), and then transcribed by hand into a bound book, this is rather tedious and prone to errors.

    Adopt a sequential numbering system

    One of the main goals of this legislation is to prevent tampering by removing or adding pages. Adopting a sequential numbering system for your board minutes goes a long way towards meeting this need.

    In this system:

    1. Each board meeting is given a number, and this is included in the title at the top of the first page of the minutes. For example, “Minutes of the 29th Board Meeting of Condominio Vista del Basurero.” By doing this, no meetings can be erased from history, and no extra meetings can be added.
    2. Each page of a set of minutes is numbered sequentially in the footer. Add the meeting number to this page number as a prefix. For example, the pages of the minutes in the point above would be in the form: “29-1, 29-2, 29-3, 29-4…” As further security against tampering, add the page count to each page, such as: “29-3 (of 6).”
    3. The heading for each item of business in the body of the minutes is also sequentially numbered. These item numbers also include the meeting number as a prefix. For example, “29.3 Adoption of the Agenda;  29.4 Approval of Minutes of the Last Meeting;  29.5 Administrator’s Report…”

    With this system, each set of minutes starts with the title (containing the meeting number) and ends at the signature block. Each page and each item of business is sequentially numbered in a way that uniquely ties it to this one set of minutes. This makes it difficult for someone to tamper with the minutes. Further a collection of these sets of minutes (such as, a given year) is also sequentially numbered and difficult to tamper with.

    Have the approved minutes double signed

    When an approved set of minutes is printed to be archived in the condo records, have it signed by both the Chair and the Secretary of the meeting in the signature block on the last page. This must include the date they signed the minutes. Further, they must both sign each of the other pages in the margin.

    This is standard practice in Mexico for legal documents, and makes it difficult for anyone to put in an altered page.

    How do you meet the minute book requirement with computer-generated board minutes?

    There are two possibilities:

    1. glue the printed minutes (and all pages of the attachments) into sequential pages of a bound minute book; or
    2. keep them in a loose-leaf binder during the year, and have them bound at the end of each year (or periodically during the year).

    Gluing the pages into a minute book most closely satisfies the spirit and intent of the law.

    Keeping them in a loose-leaf binder can be a dangerous choice, because anyone can just take out a page and put another in its place. For this reason, it’s vital that you adopt the numbering and signing systems I’ve mentioned above.

    If you choose this route, I also strongly recommend that the binder be a temporary repository only for the current year (or part of it). At the end of the fiscal year, have the year’s minutes bound into a single volume. During the year, the loose-leaf minute binder must be properly secured on the condo property, and not accessible to anyone but board members. The requirements of owner access can be satisfied by making electronic copies available by email or on the condo website.

    Book binding services are usually available in most cities from business printers. Look in the Sección Amarilla (Yellow Pages) under “Imprentas y Encuadernaciones” (Printers and Book Binders). Since notarios regularly have their protocol books bound, you could ask your notario to recommend a company.

    Make sure that the binding method you choose is permanent. Spiral or cirlock bindings (where pages can be removed) are not acceptable. If your minutes have a lot of attachments, and an entire year would be too thick, bind them into six-month, four-month, or three-month groups, as needed.

    Whether you glue them into a bound minute book, or have them bound on an annual basis, don’t forget to include the attachments (financial and other reports, quotes, emails). Have the book signed by the municipal government. These two things are required by law.

    Avoid the minute book requirement by having board minutes certified by a notario

    This article of the Civil Code also says that if you cannot enter the minutes into a bound minute book for any reason (being impractical is a reason), then, for these minutes to be valid, they must be protocolised by a notario having residence in your jurisdiction.

    This means that you can take the final printout of your minutes to a notario and have him protocolise them. You’ll then have a stamped and signed official copy, and the original will be bound into the notario’s protocol book.

    If you adopt this route, then you need to budget several hundred pesos per month to protocolise your monthly board minutes.

    Also be aware that if your minutes are in English, the notario might insist on translating them before protocolising them. This should not be strictly necessary, because you won’t be publicly registering them.

    Alternatively, you could have the notario certify a printed and signed copy of the minutes. He’ll stamp and counter-sign each page, and attach a certificate. I don’t know if this satisfies the Civil Code requirement for “protocolisation.” Ask your notario.

    What happens if your condo doesn’t comply?

    Let’s say you don’t do any of these things. You just keep unbound printouts of your board meetings in your records. Are the Condo Police going to raid your office, and cart the Administrator off to jail?

    No. You can probably get away with this for years, with no apparent problems.

    However, if you get involved in a lawsuit where you need to rely on the board minutes to prove your side of the issue, you’ll find them inadmissible, and you won’t be able to use them to support your legal argument. Further, the fact that you’ve kept improper records might cause the court to find against you.

    Retention of board minutes

    These binders and minute books are part of the condo’s legally required records, along with the assembly minutes and the financial reports. They’re the historical record of the condo, and must be securely stored and not destroyed. They must also be accessible to any owner who wants to see them.

    In my opinion, minutes kept only in the form of electronic documents do not meet the requirements of the condo law. As well, electronic storage does not guarantee long-term preservation of your records because of changes in technology (a word processor ten years from now might not be able to read today’s files) and the degeneration of the computer media (hard drives fail, and CDs and DVDs can lose their data over time).

  • Is a Condo Responsible For Property Tax Bills?

    An issue has come up recently that’s produced a flurry of questions from my readers. This topic seems to have created more interest than any other. So… a blog post seems in order.

    Disclaimer

    I have no first-hand knowledge of this situation. Everything I know about what the municipalities are allegedly doing is second and third-hand.

    As always, these are my personal opinions and not legal advice. If your condo is directly affected, you need to get a Mexican legal professional involved.

    Municipal back taxes

    It appears that some municipalities in Jalisco are trying to ferret out property owners who have not paid their property taxes. Presumably, this is to create more revenue for the city coffers.

    Apparently, they’re trying to identify unregistered construction and lots. Unfortunately, it appears that condominium common property has also come under their radar.

    They appear to have hired property assessors to take measurements and photos of property they suspect, and to arrive at a tax value. From this, they seem to be assessing back taxes and penalties. They might be going back as far as ten years.

    At least one condominium that I have heard about has been presented with a large bill.

    Issue #1: a condominium is not a property owner

    In my opinion, the municipality should not invoice a condominium for property taxes – current taxes or back taxes. This is because a condo does not own any property, including the common property.

    The common property is co-owned by all owners. Each owner’s title to their private unit also includes a percentage ownership of all common property. This is clearly set out in each owner’s title document. Article 1001 of the Jalisco Civil Code defines this proportional ownership of common areas and property, and says that such ownership cannot be separated from the individual property.

    From this I believe that if any property taxes are owed, then they’re owed by the owners of the property, and not by the condo. It appears that they might be going after the wrong party to collect these. In my opinion, the tax department is taking this approach because it’s easier to try to collect from a single source than from multiple property owners.

    Issue #2: are back taxes owed?

    The municipal tax department must assess property taxes on any property that’s correctly registered with a public title. All private units in a condo presumably fit this bill. The registered titles for each condo unit specifically include a percentage ownership of the common property.

    When a valuation is placed on a condo unit for tax purposes, one would expect that it would take into account the co-owned portion of the common property that’s clearly defined in the Civil Code and in the title document of the unit.

    If a tax department is now claiming that they failed to do this, then I’d expect that they must prove that their valuation did not include the common property.

    If they can prove that their tax valuations did not include the percentage ownership of the common property, then they can likely recover the lost taxes. However, I fail to see how they can attach penalties to an error that they made.

    My condo has always paid the property tax

    A few condos have an arrangement in their by-laws by which they pay property taxes.

    This might or might not mean that the condo has a tax obligation to the municipality.

    I think it would depend entirely on the wording of the by-laws. Remember not to get bogged down in the semantics of any English translation of your by-laws. This is easy to do. All that matters is what it says in the Spanish version that has been publicly registered.

    Hopefully, such a by-law clause would only appoint the condo administration as an agent to pay owners’ property taxes from the budget and fees as a convenience to the owners. In my opinion, this is a dangerous thing for a condo to do. However, if that’s what your by-laws say, then you likely have this obligation.

    If this applies to your condo, then you need to have a Mexican legal professional examine the wording of your by-laws to determine how liable your condo might be.

    What should we do?

    If your condo has not been presented with a bill for back taxes, then I don’t believe there’s anything for the administration to do other than take part in public discussions, and keep informed on the issue.

    If your condo has been presented with a tax bill, then I think your administration first needs to talk to a Mexican legal professional. I believe that ultimately the goal of the condo should be to shift this tax burden to the individual property owners where it belongs.

    I wouldn’t suggest that the Administrator or the Board pay any such tax bill without the specific agreement of the owners meeting in an extraordinary assembly convened for that purpose.

    If the individual owners receive tax bills, then they can try to dispute this on the basis that the taxes they have been paying included or should have included the common property. They should certainly dispute any penalties. Again, they should get legal help for their particular case.

    If your condo has a by-law section that seems to make the condo responsible for paying property taxes, again I wouldn’t recommend that the administration pay this without legal advice and the specific agreement of the owners.

    If it seems you must pay, hold an extraordinary assembly

    The owners are the title holders of the property in question, and it’s their money the condo would use to pay any such tax bill.

    If the legal professional you meet with believes that money is owed by the condo, then I strongly recommend that you call an extraordinary assembly to ask for the owners’ permission to pay (remember you need 20 days notice).

    The wording of the resolution needs to be carefully considered. I can see two possible approaches:

    The resolution might be to authorise the administration to pay this specific tax bill for the owners, and how it will be funded (such as by a special assessment). If this resolution passes, then the administration should be protected from owners who object to the condo paying this bill.

    Or the resolution could do the opposite, and forbid the administration from paying this specific tax bill, making each owner directly responsible for paying their portion. In a condo with a by-law provision to pay property taxes on the owners’ behalf, this might modify the by-law section with a specific exception.

    Both the choice of approach and the wording needs a legal opinion.

    If the result of the assembly is that the administration should not pay, then I think the condo should have their legal representative present a copy of the registered minutes of the extraordinary assembly to the tax department. After this, they should hopefully turn their collection efforts to the individual owners.

    Community Input

    If you have direct experience with this issue that you feel would add to this post, or if you’ve been advised by a Mexican legal professional, please share your knowledge with the community by posting a comment.

  • Dealing With Employees & Independent Contractors

    A condo often needs to hire people such as an Administrator, accountant, people to look after the common property (like gardeners or a pool maintenance contractor), and even security guards.

    There are two different ways a condo can hire someone to do work, and it’s important to clearly understand the differences:

    1. employee; or
    2. independent contractor

    Let’s deal with each separately.

    Employees

    All employee/employer relationships are governed by the Mexican constitution (Article 123) and the Ley Federal de Trabajo (Federal Labour Law). The labour law was last updated on November 30, 2012. Mexican labour laws are much more stringent than north of the border, and are strictly enforced. All Articles quoted in this post are from this law.

    Employees can be hired for either an indeterminate or a fixed period of time. Different benefits apply to these two groups.

    Most employees fall into the first category: when hired, it’s not known if they’ll be doing the job for a month or 15 years. Employment ends when the employee quits or is terminated. Or else, it continues indefinitely.

    Under special circumstances outlined in the law (Article 37), your condo can hire an employee for a fixed time period (6 months, for example), or for a specific project (sort and file boxes of documents into a filing cabinet). In both of these cases, if the employee doesn’t quit or is terminated, employment automatically stops at the end of the set time period or the end of the project.

    Cost of terminating an employee

    When employment is terminated, the employee is entitled to any wages owed up to the date of termination, vacation pay (Article 76) plus a vacation bonus (Article 80), a pro-rated portion of their aguinaldo (Christmas bonus – Article 87), and a seniority bonus (Article 162).

    Most employees are also entitled to severance costs. The exceptions are covered in Article 53: employment ended by mutual consent (get this in writing!), the employee died, an employment for a set time period or specific project has ended as agreed, or the employee has been terminated for cause (Article 46).

    The reasons for termination for cause are limited (Article 47), are serious wrongdoings (such as dishonesty, drug or alcohol abuse, insubordination, and unjustified absenteeism), do not include poor work, and require concrete proof on the part of the employer. In general, this is very hard to do.

    The condo must notify any employee in writing of offences listed under Article 47, and have the employee sign the copy kept in the condo files. If the condo wants to terminate this employee for cause, you must have these documents.

    The condo must give the employee advance notice of termination in writing, or the termination will be automatically considered as unjustified. If the condo fails to prove that it had a right to terminate the employee for cause, it’ll have to pay severance costs, and can be liable for wages from the date of the termination until the final payment is made to the ex-employee.

    A termination “without cause” (most terminations) for an employee working for an indeterminate time always results in severance costs. These typically consist of (Article 50): 20 days salary for each year worked, plus three months salary, plus wages from the date of termination until the date the employee has been paid severance and other costs.

    If an employee hired for a specific time period or project is terminated without cause before the agreed end of the time or project, then they’re owed severance of 50% of the wages already paid to them, plus 20 days salary for each year worked over one year.

    The finiquito

    If a condo terminates an employee, it must have them sign a dated and witnessed document (the finiquito) containing a brief statement of their employment and salary, and detailing the amounts and calculations of the various wages, benefits, and severance amounts being paid.

    It must also say that the employee agrees, and that this is the total compensation. However, it’s important to note that any waiver by the employee to wages earned, or to benefits or severance to which they are legally entitled is null and void (Article 33).

    Ideally, have this document prepared beforehand, then have it signed and pay out the worker on the day of termination. Any delay in finalising the employee’s compensation payment past the date of termination results in more costs to the condo. The condo will owe wages for each day between the date of termination and the payment of compensation to the employee (Article 50 III).

    Ongoing costs of employees

    While an employee is working for a condo, certain items must be deducted at source from the employee’s wages and remitted to the government:

    • income tax
    • IMSS (social security)
    • INFONAVIT
    • SAR pension fund

    The condo must keep accurate records of these deductions and their filing with the government. If a condo fails to make these deductions and remit them, a disgruntled employee can cause serious problems by reporting this omission to the government.

    It’s also a good idea to get a signed receipt for all wages paid to an employee. The more employment records the condo has for the employee, the better.

    Your condo must also give all employees a paid vacation, and pay an annual Christmas bonus (aguinaldo). Be aware of overtime regulations and statutory holidays. The condo is also required to have adequate work space for the employee to carry out their work, the tools needed to do the job, and deliver all training needed to do the job.

    Employment contract

    Workers hired for a specific time period or project must have a contract, or there’s no way of proving when the employment ended, and the employee will become a regular employee entitled to severance.

    All other employees should also have an employment contract to protect the condo. Without a formal contract (Articles 20, 21, & 26), Mexican labour laws favour the employee over the employer, and the burden of proof about the details of the employment relationship is always on the employer.

    For example, if your condo terminates an employee and pays him three years severance, but he then claims he worked for the condo for five years, the condo must be able to prove a three year employment with documentary evidence.

    The dated employment contract must include (Article 25):

    • personal details of the employee and the employer;
    • type of employment (indefinite time or specific time or project, or seasonal work), and any initial training or trial periods;
    • the work to be done by the employee, described as precisely as possible;
    • the place(s) where the work must be carried out;
    • the length of the workday (be aware of overtime rules);
    • the form and amount of wages (must be paid weekly);
    • the day and place for payment of wages;
    • a statement that the employee will be trained as needed; and
    • any other employment terms such as days off, vacations, or other items agreed to by the worker and the employer.

    The agreements in an employment contracts are binding on both parties, as long as they’re consistent with the labour law, good faith, and equity. Despite what an employment contract says, it’s always governed by the Federal Labour Law. Any terms in an employment contract that contradict the labour law will be considered null and void. In particular, any waiver of an employees rights to overtime, benefits, or severance is invalid.

    Independent contractors

    Independent contractors have many advantages over employees.

    Unlike an employee, there are no deductions at source that have to be remitted, there are no benefits to be paid, and a condo can terminate them without severance.

    Must be contracted

    For a service provider to be considered as an independent contractor, rather than an employee, a properly executed and dated contract for services must exist. This must include:

    • personal details of the employee and the employer;
    • fact that this is a contract for services, that the worker isn’t an employee, and isn’t entitled to benefits or severance;
    • the work to be done, described as precisely as possible;
    • the form and amount of fees for services (usually monthly);
    • the day and place for payment of fees; and
    • any other contract items agreed to by the service provider and the employer.

    Note that if your condo is contracting a condo Administrator, the contract can only be for one year (Civil Code Article 1011).

    Who can be an independent contractor?

    Be careful! Your condo can’t just have all its employees sign service contracts, and get out of paying them overtime, benefits, or severance.

    If a subordinate relationship exists between the service provider and the condo, Mexican law will decide that an employee/employer relationship exists. In this case, all employee benefits and compensation will apply!

    An independent contractor is a service provider hired to carry out a specific task, with the ability to choose their own method of doing the work. They’re under the control and direction of the condo administration only insofar as the end result of their work is concerned, and not as to the way in which the work is carried out.

    An independent contractor can be either a person or a company.

    There are certain criteria that a service provider must meet to be considered an independent contractor, rather than an employee (the existence of a contract for services doesn’t guarantee this):

    1. has “authoritative control” to do their work the way they want, in their professional or expert capacity (not constantly supervised and instructed except as far as the end result is concerned);
    2. is free to set their own schedule and hours (not required to be at the condo three days a week from 9:00 to 5:00, for example)
    3. provides their own office (or work base) and office supplies, provides their own tools, pays their own business expenses, and hires their own assistants or employees;
    4. are paid only for work done (such as by a monthly fixed fee), and has no paid vacations or holidays, and doesn’t receive the annual aguinaldo (Christmas bonus); and
    5. has other paying clients (performs similar services for other people besides the condo), and markets their services to the public.

  • The Jalisco Condo Law Before 1995 – REVISED

    In the “Jalisco Condo Manual,” I say that that the book is based on the condo legislation passed in 1995, and that different rules applied before then.

    So what’s the situation for condos that were set up before 1995?

    This is a re-write of a recent article

    This is a re-write of the article I posted yesterday (June 3, 2013).

    I was misinformed about some facts, and the original  article contained errors. Thanks to Jim Rizzo for pointing me in the right direction to research the correct information.

    It’s important to me to always give you accurate information and advice, and I appreciate it when readers point out errors and give me the necessary legal citations to find the facts.

    I apologise for any inconvenience this might have caused my readers, and encourage you to re-read this article, since there are significant changes.

    A bit of history…

    So far, Jalisco has had three different condo laws:

    Before April 11, 1985: the first condo law was introduced on March 17, 1956, and was separate from the Civil Code. This law was referenced by the Civil Code in Article 986 (under Chapter VI – Co-Ownership). This separate law was called the “Ley del Régimen de Propiedad y Condominio” (Law of the Regime of Ownership and Condominium).

    From April 11, 1985 until March 6, 1995: the condo law was changed, and was still a separate law referenced by Article 986 of the code. This new law was called the “Ley Sobre el Régimen de Propiedad y Condominio de Inmuebles” (Law on the Regime of Ownership and Condominium Real Estate), and came into effect on April 11, 1985.

    From March 6, 1995: the separate condo law was replaced by a new section of the Civil Code. This new section of the code was created to deal specifically with condominiums. The code also added a condominium to its list of legal entities, eliminating the need for an association.

    In the earlier versions of the Civil Code (before March 6, 1995), a condominium was not a legal entity, and so a civil association was needed to legally represent the condo. The code section on associations was similar to today’s.

    The law in effect when your condo was set up is the one that applies

    The decree that changed the Civil Code to incorporate the condo law (among many other changes), says, “The rights and obligations resulting from actions and legal acts carried out under the authority of the previous code will be governed by the [previous code].”

    Since the public registration of a condo regime is just such a legal act, the laws that apply to a given condo will be those that were in effect when the condo was set up (when the escritura constitutiva was registered).

    The next two sections of this article outline the major similarities and differences between the old and new laws, but aren’t exhaustive.

    Similarities…

    Both the separate laws and the new code section bundle the entire condominium property under a Régimen de Condominio (condo regime). The second condo law introduced the types of condos: vertical, horizontal, and mixed, with similar definitions and characteristics. Both divide a condo into private units and common property.

    The rules for setting up the condo regime were similar, and had to be registered in a public document (the escritura constitutiva), that also contained the percentage rights of each unit.

    The second condo law introduced the concept of a condómino (registered titleholder).

    All three laws require owners to pay fees for administration, and repairs and maintenance. The second condo law introduced the requirement for a a reserve fund.

    All three laws have a provision to sell a delinquent owner’s condo rights at public auction.

    In all three laws, both condo fees and voting at assemblies are proportional to the percentage property rights.

    The administrative structure is similar: each version of the condo law has an Administrator. The second condo law introduced a comité de vigilancia (oversight committee). The main purpose of the oversight committee (like today’s consejo de administración) is to inspect the work of the Administrator, verify the financial accounts and the reserve funds, report to the owners about the work of the Administrator, and assist the Administrator with their work under observance by the owners.

    Differences…

    The first condo law doesn’t define types of condos, this was introduced in the second condo law.

    The concept of a condómino (registered titleholder) does not exist in the first condo law. This law referred to dueños (owners) and propietarios (property owners).

    The first condo law doesn’t require reserves, this was introduced in the second condo law.

    Both of the old laws differ from each other, and from today’s law when it comes to assemblies:

    • the first condo law was very basic, and had no requirement for regular assemblies;
    • the second condo law introduced a general assembly that had to be held at least once a year; and
    • the new condo law introduced the concept of ordinary and extraordinary assemblies, with an ordinary assembly being mandatory once a year in the first quarter of the year.

    There are also significant differences amongst these three laws about quorum for assemblies, and voting rules to pass resolutions at assemblies.

    The first and second condo laws had a rule that when one owner has more than 50% of the voting rights, a resolution also needs 50% of the remaining votes to pass. This was eliminated in the new condo law.

    The second condo law required the Administrator to give a detailed monthly accounting to each owner on the financial state of the condo. This requirement no longer exists in the new law ( although it’s good practice for transparency). Now the Administrator is required to produce a detailed quarterly report to any owner who asks (although, again in the interests of transparency, a good condo administration will automatically send this to all owners).

    The first condo law had no “Board.” The second condo law introduced the comité de vigilancia (oversight committee). The oversight committee had to have at least three members (there is no longer this requirement unless it’s in the condo’s by-laws). One of these would be the committee chair. Now there’s only a chair (presidente) by implication. The new law changed this to a consejo de administración (administrative council).

    The old condo laws are more basic than the new one, and are lacking several rules that have now become law.

    The bottom line…

    The particular condo law that applies to a given condo is the one that was in effect when the condo was set up. Some condos might have re-established their condo regime when the major change took place in 1995, many did not.

    To find out which of the three condo laws applies to your condo, you must check the date of your escritura constitutiva:

    If your condo was set up before April 11, 1985, then you’re governed by the first condo law (separate from the Civil Code), and you will have an association.

    If your condo was set up on or after April 11, 1985, but before March 6, 1995, then you’re governed by the second condo law (separate from the Civil Code), and you will have an association.

    If your condo was set up on or after March 6, 1995, then you’re governed by the new condo law (embedded in the Civil Code), and you should not have an association. This is the version of the condo law that is covered in my books, the “Jalisco Condo Manual” and the “Jalisco Condo Law in English.”

  • What Can Jalisco Learn From Quintana Roo?

    A unique section of the condo law

    This is a short post about a unique piece of condo legislation from another state in Mexico that I think can serve as a model for Jalisco and all other states.

    Quintana Roo, like many states, has a separate condo law outside of its Civil Code (Jalisco’s is embedded in the Code). There, the state Civil Code references this law: the “Ley De Propiedad En Condominio De Inmuebles Del Estado De Quintana Roo” (Law of Property in Condominium Real Estate of Quintana Roo). The latest version of this is March 22, 2011.

    In quickly looking over this condo law in response to a question from a condo owner there, I noticed a unique section toward the end called “Condominium Culture” (Articles 56 through 59).

    The rules of this section

    In my opinion, this is a rather interesting and unique concept. This section says, in essence:

    “Condominium culture” is everything that contributes to create actions and attitudes that allow peaceful coexistence in meeting the goals of the condo regime. It has these essential elements: respect and tolerance; responsibility and compliance; joint responsibility and participation; solidarity, and mutual acceptance.

    The city officials and the executive branch of the state must promote condominium culture in the state of Quintana Roo. They must, along with educational institutions, create the necessary means by which condominium education can be taught at various educational levels.

    If the residents or building manager of a condo asks for it, city officials and the executive branch of the state, in coordination with housing agencies, must give guidance and training through various courses and workshops.

    Anyone who’s part of the condo administration must have the knowledge necessary to carry out their duties.

    Could solve many problems

    I’ve never seen this before, and I think this is a fabulous idea. In my view, every state should do this. In fact, this is a model for condo legislation everywhere, not just in Mexico.

    In particular, I’m impressed with the article requiring members of the condo administration to have the necessary knowledge and training to carry out their duties. And… they back it up with available training! What a great concept!

  • How to Handle a Blind-Side at an Assembly

    There are some issues that are complex enough that you want to make sure they pass an assembly vote without needing changes at the assembly. These issues are just too complex to deal with at an assembly.

    Complex wording shouldn’t be thrashed out at an assembly

    For example, let’s say you need to change your condo by-laws.

    By-law changes are a complex issue. They’re a legal document that will govern your condo for years to come. You need to get them right.

    You definitely do not want to make quick changes under the pressure of an assembly. Changes that have not had the benefit of thorough thought and analysis. A hasty rewrite at an assembly can turn out later to have imprecise wording, conflict with another part of the by-laws, or be contrary to the condo law or another law.

    It’s important that these changes be properly thought-out and vetted before the assembly, and that they’re approved without unexpected quick changes that you could regret later.

    You’ve done everything right

    You’ve struck a committee to examine your by-laws, and propose changes. You’ve invited all owners to come to these committee meetings. You’ve send out several stages of draft versions of the proposed by-law changes to the community for the owners’ inspection and feedback. You’ve responded to each owner who took the time to comment. You’ve incorporated some of these owner suggestions. For those you didn’t incorporate, you contacted the owner, talked it over with them, and explained your reasons for not using their suggestion.

    You might have run them past a lawyer to make sure they didn’t contradict the condo law, any other laws, or other parts of the by-laws.

    The result of your lengthy and public process is a set of proposed by-laws that has been thoroughly studied and vetted by the community. Approving them at your upcoming extraordinary assembly should be a smooth and easy process. After all, everyone’s had input, the community has “bought into” the changes, so how could anyone object?

    Reality strikes

    An owner who, for some inexplicable reason known only to themselves, didn’t take part in any of the committee meetings or the public feedback process, but stands up at the assembly and rattles off a list of six or seven changes they demand you make to the proposed by-laws!

    The unfortunate truth about human nature

    In any community, there can be people who’ll be opposed to some of your by-law changes (or any changes), but who won’t take part in your review and feedback process, and who’ll voice their objections for the first time at the assembly.

    I won’t tell you what I think of these people, but the fact is they’re out there. I sincerely hope you don’t have any in your condo!

    Be proactive and have a plan

    If you’ve carried out a thorough and public review, in all likelihood, your vote to adopt the new by-laws as presented will pass with no problems.

    That said, you do need to be prepared for the eventuality of someone trying to thwart the process solely to bolster their own ego. This is a slap in the face to everyone who worked so hard on this project, and to those owners who did give comments and suggestions, but these individuals don’t care about others.

    To help pave the way for dealing with this problem in case it comes up, I recommend that you announce at the beginning of the assembly that:

    • because of the complex nature of the vote, you’ll be following Robert’s Rules of Order Newly Revised;
    • there’s a time-limit for speakers of five minutes;
    • during discussion, each person can only speak twice to a motion;
    • they cannot speak a second time until everyone else who wishes to speak has had their first opportunity, and their second speech must have new information (cannot be what they already said);
    • rules of decorum will be enforced: if a speaker strays from the topic, makes comments that are a personal attack on another person, questions someone’s motives, refers to someone else by name, is rude, or uses profane language, then the Chair of the Assembly will either sanction them or rescind their speaking privilege.

    If you say this at the beginning, and if no one objects, then these rules are in force for the assembly. If someone does object, have a quick vote – one vote per attendee, majority rules.

    Before the motion to approve the proposed by-laws is made, give a brief introduction. Summarise the process you went through, stressing the amount of time and effort that went into it, the number of people who worked so hard, and the many opportunities every owner had to give their feedback and to voice their concerns or objections. If you used a lawyer, explain that the scrutiny of a lawyer was needed because of the complex nature of the by-laws, and to make sure that they were legal, and that parts didn’t contradict other parts.

    Dealing with changes presented during the motion

    When the motion to adopt the new by-laws comes up, you should then open the motion for discussion before it’s put to a vote as a resolution of the assembly.

    It’s possible that you could have someone there who wants to blind-side the process. They will now bring up one or more changes.

    If someone does stand up with a list of changes, then I suggest you tell them that the time for changes has passed. Explain that there were many opportunities during the lengthy public feedback process to give their concerns and changes, and say that the by-laws are too complex to make changes on-the-fly at an assembly without studying their legality or their impact on the rest of the by-laws.

    Hopefully, they’ll then see reason and sit down. Remember that discussion doesn’t mean that the assembly has to entertain their changes unless they make some sort of formal motion.

    Dealing with an amendment

    If they do propose an amending motion (following the proper procedure as outlined in Robert’s Rules Newly Revised §12. AMEND), then their amendment must be voted on.

    To make this potentially complex process much simpler, insist that each of their proposed changes be stated as a separate amendment, and deal with each one in turn.

    They’ll then make their first motion to amend, citing the first change they want to make.

    For example, assume that the original motion was, “To approve and adopt the proposed by-laws as presented.”

    The amending motion could be, “To approve and adopt the proposed by-laws as presented with a change to the second paragraph of Article 12 as follows, ‘blah blah blah’.”

    A seconder is necessary for the assembly to consider the amendment. If there’s no seconder, the amendment disappears, and you can move on.

    If the amendment is seconded, then the attendees have a right to speak to the amendment before it’s voted on. One or more of the by-law’s supporters (the more the better) should be prepared to make a clear case about why unreviewed changes must not be made. If a committee member is there who knows that the proposed change is illegal, badly worded, or in conflict they should rise and say so.

    When everyone has spoken (no more than twice!), then the amendment is voted on. Just before this vote is taken, the Chair has the right to explain the impact of this change to the assembly, and can restate any concerns about the proposed amendment.

    Remember that proportional voting by condo rights only applies to any final resolution that will be adopted by the assembly.

    Incidental votes of a procedural nature (such as on an amendment) can be a simple one vote per attendee, and the majority carries.

    These motions to amend (and the voting on them) won’t appear in the registered assembly minutes (if you include them, your notario will most likely remove them during the protocolisation process). All the notario wants to see is the wording of the final resolution as it was voted on. He doesn’t care about the process that led up to its final wording.

    Once an amendment has been moved and defeated, it cannot be discussed or brought up again.

    There could be enough people to defeat one or more of these amendments if they already agree with the new by-laws, and understand that off-the-cuff changes to the governing legal document are ill-advised.

    If any amendment passes, you have no choice but to accept it, and the wording of the motion to approve the by-laws will then have the added change for the vote.

    Each new amendment that passes will add some new text onto the end of the original motion.

    Passing an amendment does not make it a resolution of the assembly. The amendment just amends the original motion (to approve the by-laws), and, once all amendments are finished, the amended motion must still be voted on by the assembly before it becomes a resolution of the assembly.

    I realise that this is complicated, but this is such a critical issue that you need to do everything you can to make sure your by-laws are correct. While a deliberative assembly lets someone blind-side you, it also gives you the tools to do everything possible to try to undo any damage they might be causing to the condo through these actions.

    The end result of this series of amendments could be a highly changed motion, a slightly changed motion, or the original motion to approve the by-laws (unchanged).

    Before the final vote takes place on the amended motion, discussion can continue on the motion as amended. This is because the discussion on this motion was put on hold by the amendment process. If the amended resolution contains changes that are harmful, possibly illegal, or damaging to the condo, then you should be prepared to have people stand and say this. If these changes have a significant negative impact on the by-laws, you might now want to lobby to have the amended by-laws defeated for the sake of the condo. Remember that the mover of the original motion can have the last word before the vote.

    This final vote does use condo rights, because this is a resolution of the assembly that’ll be in the minutes and will be binding on all.

    If an amendment passes, and then the amended resolution also passes, this could be unfortunate (depending on the nature of the changes), but you have no choice but to accept the outcome.

    Hopefully, this worst-case scenario is extremely unlikely, and you won’t experience this behaviour in your condo. It is, however, best to be prepared.