I Survived a Condo Home Owner Association Meeting in Costa Rica
I was asked by a friend to accompany him to the annual meeting of the Home Owner Association (HOA) in the condominium building where he resides. After more than eight hours of debates and compromise and witnessing the full range of human emotions the annual meeting was over and the Condo administration had their marching orders for one more year.
Since many of you may purchase property in developments which are governed by a Home Owner Association I thought I would share those experiences with you.
In this particular building the by-laws stipulate that the General Assembly of Home Owners can be convened with at least eight days of prior notice by publishing the notice in any local newspaper. In addition to the notice the building administration had posted signs throughout the building to get the word out so that owners could attend. Since Costa Rican legal requirements are quite formal, sometimes ridiculously so, the notice that was published specified in detail each and every single point that would be discussed at the meeting. The notice also indicated that any proxy vote holder had to provide the documents accrediting them to vote. Any Power of Attorney documents must be “duly legalized” which means that they must comply with Costa Rican law.
I showed up at nine in the morning which was the hour indicated in the notice as the first quorum. The meeting finally got under way when the second quorum was called at ten in the morning.
The first order of business was to verify the percentage of the condominium which was represented at the meeting. The tally was 50.2% of the Condominium unit owners were represented. After more than an hour of debating legal technicalities related to notice and the proxies it was ruled that 15% of the unit owners being represented by proxies would not be allowed to vote because the proxies did not comply with the “duly legalized” dispositions of Costa Rican law. The new tally 35.2% of the owners would have the right to vote at the Assembly. The tension was already mounting and we had not even begun the debate on the crucial issues related to the Condominium itself.
The first order of business was to approve the report prepared by the building administrator which summarized what had occurred the previous year. Keep in mind that this is simply the report of what had already happened in the past. Most of those present had indicated that they had never received a copy of the report and with the touch of hostility in the air the representatives rejected the report. At this point in the meeting I realized that the lack of communication and the proper dissemination of documents created a lot of contention. In our age of technology one would think this could easily be avoided by posting all the information online and letting all the owners have access to it. This would have eliminated at least two hours worth of bickering about the lack of information.
After voting on several resolutions regarding new regulations and the use of common areas that were approved by the Owners we were gearing up to address financial matters of the Condominium. Ah yes, this was going to get interesting as the focus turned to the pocketbook. Since the Condominium Administrator expected a shortfall for the coming year it was necessary to approve three extraordinary assessments to cover those un-expected expenses and to extend insurance coverage and maintenance of the common areas of the building. This point on the agenda took hours and hours as they poured over accounting statements to understand the accurate financial picture which was being presented by the Administrator to the unit owners.
At this point the Chairperson for the Assembly was wise enough to allow for a break before discussing the next point on the agenda, a 40% increase in the monthly condominium fee over the one set the previous year. With everybody rested and ready to go the meeting was resumed and the sparks started flying again. Once again this was an issue that hit the pocket and everybody wanted to know the specifics in detail.
With large slides projected on a screen every detail of the income and expenses of the condominium were meticulously analyzed. The end result was that there was no option, the fee had to be raised.By this time at least two persons had already stormed out of the meeting angrily voicing their discontent for what was transpiring.
The balance of the meeting now moved on to less dramatic issues namely related to the maintenance and upkeep of the property and certain cosmetic changes in the common areas. After eight hours – everybody was ready to go. The Condominium Administrator would have the fortunate task of informing all those unit owners that did not attend the meeting of the end results of which they would all have to adhere to.After my experience with this particular meeting I would like to share with you some points that any person contemplating living in a condominium property should take into account.
1. Carefully read and understand the Condominium bylaws and regulations before you purchase. If you purchase in a pre-construction project this may be difficult since in many cases the by-laws would not be recorded. Despite this ask if they have a draft of what the by-laws will state.
In newly built condominium projects it is customary for the Developer/Builder to draft and record the by-laws as part of the property titling process. Since Costa Rican law requires a full majority to modify the existing by-laws of a condominium don’t purchase assuming that you will be able to modify something you don’t like later.
2. Understand the finances of your Condominium. When you purchase into a condominium you are buying into the entire Condominium not just your individual unit. If the condominium finances are in the “red” it will affect you in the near future. When purchasing ask for the financial records of the Condominium so you can see how it is being managed.
- Also ask for a signed letter from the Condominium Administrator certifying that the unit you will purchase is up to date with any monthly fees or assessments.
- 3. If you plan to confer a Power of Attorney to somebody else to attend a Condominium Assembly meeting be sure that the Power of Attorney (proxy) complies with Costa Rican legal requirements.
- Living in a Condominium has its advantages and the more informed you are about your rights and obligations the easier it will be for you to live among your neighbors.