Cutting-Off Water to a Delinquent Owner
Any condo that has delinquent owners is frustrated by this state of affairs, and is always looking for any pressure they can apply to get these people to pay.
Rather than a municipal water supply, some condos have their own water supply (often in the form of a well).
They don’t actually own this water supply (it isn’t common property), since water is a national resource that always belongs to the Republic. What they should have is a concession from the Comisión Nacional del Agua – CONAGUA (National Water Commission). This is a federal body, set up to administer the nation’s water, along with a decentralised management system for it. This concession gives them a temporary right to use and distribute this water to users in their condo.
Other condos might have a common property aljibe (water tank) that’s filled by the municipal water utility, and then water is pumped from this aljibe through the condo by a common property water pumping and distribution system.
In either case, it’s tempting to want to shut off water to a delinquent owner to give them an incentive to pay.
Water is highly regulated in Mexico
The laws governing water use in the state of Jalisco are as follows (from highest authority to lowest):
- the Mexican Constitution and International Treaties on Human Rights (NEW – more on this later)
- the Ley de Aguas Nacional (National Water Law)
- the State of Jalisco Constitution
- the Ley Del Agua Para el Estado de Jalisco y Sus Municipios (Water Law for the State of Jalisco and its Municipalities)
- the Reglamento (rules of procedure) for the above law
- the Reglas de Operación de la Comisión Estatal del Agua de Jalisco – CEA (Rules of Operation of the State Water Commission of Jalisco – CEA)
There are also several Normas Oficiales (official standards) for such things as the quality of water delivered for human use and consumption.
The CEA is an organization made up of the representatives of local water boards or local organizations of water users (such as fraccs and condos), CONAGUA, and other competent authorities, and acts as the coordinating body in the respective watersheds in terms of the law.
You cannot cut-off water
Deriving from the National Water Law, and being amplified in the lower laws, is the right to water for drinking and sanitation. This is considered a basic need for life, and cannot be cut off.
That said, you do have the right to enforce sanctions if you have a contract for water delivery with your owners, and this contract spells out the violations and the corresponding penalties. This contract could include a clause to limit water use in the case of non-payment. NOTE: the terms of your contract with your users cannot violate or contradict the terms of your water concession.
Turning it down to a trickle
A common practice has been to decrease the water flow to the unit to a minimal amount. Then you could argue that you hadn’t cut-off the water, but the owner might be inconvenienced enough to pay up.
If your condo has its own water supply, and you have a water concession from CONAGUA, you need to carefully read the Terms and Conditions of your concession. It might have limitations on what penalties you can impose on your water users, including reducing or limiting their water. If you decrease water flow to a user, and your concession doesn’t let you do this, you could lose your concession.
If your condo collects and redistributes municipal water, you might be in a better position. The aljibe, the pumps, and the distribution piping are common property and are jointly owned by all owners (including the delinquent owner). As such, you can’t deny an owner access to property (in this case equipment) that they own (jointly or fully). However, you can argue that in this situation the water itself (not the distribution system) is a service for which the condo pays from revenue received in the form of fees. Non-payment of these fees might be cause to reduce the non-paying owner’s water supply.
Two important and recent changes to the Constitution
Two recent changes to the Mexican Constitution might make the practice of reducing water risky.
1. In June of 2011 Articles 1 and 103 of the Constitution were changed to give equal weight to human rights contained in international human rights treaties to which Mexico is a party, and to make these enforceable by the Federal courts.
The General Assembly of the United Nations at its 108th plenary meeting on June 28, 2010, adopted resolution A/RES/64/292 which says, in part:
“1. Recognizes the right to safe and clean drinking water and sanitation as a human right that is essential for the full enjoyment of life and all human rights;“
As of June 2011, this is now part of the Mexican Constitution and Federal Law.
2. To further shore this up, in February 2012 a new paragraph was added to Article 4 of the Constitution, as follows:
“Every person has the right to the access, distribution, and sanitation of water for personal and domestic consumption in a form that is sufficient, healthy, acceptable, and accessible. The State will guarantee this right and the law will define the basis, the assistance, and the means for access and fair and sustainable use of the water resources, establishing the participation of the Federation, federated entities, and municipalities, as well as the participation of the citizens for the attainment of these goals.“
It’ll take a few more years before this filters down into procedures in the other Federal and State laws, but it signals a significant change. Mexico is clearly getting in sync with a global movement towards making access to water a basic and fundamental human right. And, even though there might not be systems in place for fully carrying this out, it’s now a Constitutional right in Mexico.
One of the more important words in this new article (that may have been intended to plug the trickle loop-hole) is “sufficient.” What exactly does this mean? In the context of the right to water, the internationally accepted meaning is this:
“The water supply for each person must be sufficient and continuous for personal and domestic uses. These uses ordinarily include drinking, personal sanitation, washing of clothes, food preparation, personal and household hygiene. According to the World Health Organization (WHO), between 50 and 100 litres of water per person per day are needed to ensure that most basic needs are met and few health concerns arise.“
Not exactly a trickle!
These new changes could make it easy for a delinquent owner to get an injunction against the condo for seriously reducing their water. The injunction process is different from a lawsuit, and is much faster.
Anyway… something to think about.
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I have a related question(s) Our Administration has, in fact, turned off the water to a delinquent owner. They have also turned off the electricity and possibly the phone services and television cable that is provided by the Association to all owners. The electricity is not metered or billed to individual units but provided through the complex and those expenses are included in our maintenance fees as are the other services listed above. There are numerous other delinquent owners and units in foreclosure that have NOT had their services cut off. Gossip states the owner has fallen on hard times financially due to medical expenses.
Reading our by laws it appears to require a majority vote by the Advisory Counsel to take action against an owner. This did not occur.
Question? Can the Administration cut off Electricity?
Question? Can the Administration cut off those other services?
Question? What would you recommend to the Administration and Advisory Council how to manage the situation?
Question? What recourse might that delinquent owner have other than litigation that he likely might not have the financial resources to do or live long enough to see it resolved in the courts?
I’ve been told that it is illegal to rent if the owner holds the property in trust.
So, if your delinquent owner is renting, this could be a possible ploy….to turn him in for breaking the law.
Luis Melgoza, attorney, who writes for the PV Mirror and on the Yahoo blog “Life in Puerto Vallarta” wrote about this problem:
“Technically, unless the permit issued by Foreign Relations spells out that commercial use of the fideicomiso asset is authorized, beneficiaries of residential fideicomisos may not lawfully rent or otherwise generate income from the property. Permits to establish a fideicomiso in the restricted zone are granted exclusively for residential purposes; renting is an act of commerce per Mexican Law.
In practice, there are so many violators that it is impossible for Foreign Relations to enforce the law consistently; however, if caught (i.e if someone blows the whistle), renting fideicomiso assets without express approval spelled out in the permit, as well as encroachment on federal lands, waters and rights of way are causes for revocation.
Yes, fideicomisos are commonly called bank trusts.
The restricted zone covers 100 kilometers from Mexico’s international borders inland and 50 kilometers from the country’s coasts. Foreigners may have outright ownership in the rest of the country and may rent at will.”
This threat might make him pay his dues..?
And, if the HOA wins the case and they collect millions of pesos, what happens to the money? Does it stay in the HOA account? Seems like a lot of money to put in trust. And what if someone sells their unit, as they’ve been paying dues to cover the delinquent owners, do they get their proportional share when they sell, or do they just lose?
If a condo collected a large windfall from suing a delinquent owner, then, yes, this money would go back into general revenue.
There is no legal requirement that I know of to compel the administration to pay back the owners who covered the debt over time. The mechanics of doing this could prove unwieldy. For example, how do you track down owners who were paying fees during the delinquency, but have since moved away?
What would more likely be done would be to use this to top up the Reserves (if needed), and then to offset income needed in the next fiscal year (or more). Both of these actions might significantly reduce or zero out the fees to be collected in the next fiscal year. If it was, indeed, millions of pesos, then this may have an effect over the next multiple fiscal years.
An owner selling their unit immediately after the collection would not benefit. If they sold their unit, say, a year later, then they might have benefited from a period of reduced fees. Otherwise, no… they’re not compensated. This is a good reason to stay on top of delinquents!
I have a friend who rented an apartment from an owner who is past due in his dues, she offered to pay the three months dues – while she is there – to the HOA when she was informed of this, they wrote her and threatened to sue her for ALL of what he owes in past dues, plus the unbelievable interest they have charged monthly and fines, which make a past due of 64,000. pesos turn into 245,000. They said they have a lawyer writing up the bill, so she better vacate now. Is this legal?
A couple of comments:
Article 1029 of the Civil Code does say that tenants are jointly responsible for unpaid fees, along with the owner. What isn’t clear, and would likely need a Judge to interpret it, is: does this apply to all delinquent fees owed by the owner, or only those during the time the tenant actually occupied the property? My gut feeling is that the latter is correct – but I don’t know this for a fact.
The law (Article 1028) says that the interest on overdue fees must be charged at the average interest rate for unsecured 30-day loans from the two largest banks in Mexico (currently, I believe these are Banamex and Bancomer). This is probably somewhere around 38% annually, or about 3% a month. I do not believe that interest above and beyond this is legal.
However, there is nothing in the condo law about fines (not the same thing as interest). For these to be legally imposed, they would have to be specifically spelled out in the condo’s by-laws. BTW, fines in Mexico are normally spelled out as a multiple of the daily wage as published by the federal government. For example, failure to pay fees might result in a fine of 100 times the established minimum wage. Currently, this minimum wage is about $80 pesos.
Note that such fines, assuming they are in the by-laws, normally would have to be imposed by a vote of the Board and recorded in the board minutes placed into the condo record (unless the by-laws specifically state an alternate method, and assuming it is legal). Also, these are normally one-time fines, unless something else is established in the by-laws. Monthly, accumulating fines might not be legal. This is an area where an abogado would need to be consulted.