If the Bank is the Legal Owner....?

by Lic. Romina Ruiz cardenas, esq.,  Corredor Publico No. 9

If the Bank is the Legal Owner, Can I Vote in HOA meetings?
The question often comes to mind of the foreigners, who by law, acquire  property  in  the restricted zone1 of Mexico v i a a F i d e i c o m i s o . The legal owner of the “real rights” on the property is not the actual person who paid for the property, but rather the bank institution holding the trust (Fideicomiso). The foreigner, in a Fideicomiso, is the rightful owner of the beneficial trust rights for the use and enjoyment of the property.

With this in mind, the question of who has the right to vote in the HOA meetings is an important issue.

The general answer to this questions would be: The right to vote pertains to that person or entity that according to the Condominium Regime Bylaws or to the Condominium Law governing said regime is considered as HOMEOWNER.

Please note that I have said “the condominium law governing said regime” instead of saying “the State Condominium law”. This was intentionally written this way. NOT all Condominium Regimes are governed by the State Condominium Law (which became effective as of November 2007, and was amended this past October 2016), but there still some that were incorporated prior to the new State Law, and thus are governed by the prior law applicable at the time when the Regime was registered. This is true, unless they in a general assembly meeting adopted a resolution to be governed by the November State Law specifically. I will not go into explaining the different condominium laws, as that is not the topic of this article.

So, how would you know who the “Homeowner” is.  This question CANNOT be answered generally. In order to answer this question on a specific Home Owner’s Association basis, you will have to refer to the incorporating documents or bylaws for the Condominium Regime for that specific condominium or unit. I can say that pretty much all of the Condominium Regimes would have a chapter for “definitions”.  In this chapter you can verify what the definition of who a homeowner is. So if your condominium regime bylaws do not define or state who the Homeowner is, then you would have to abide by the current condominium law.

The definition of homeowner in the Condominium Law2 that was effective prior to our own State law states:
“Article 11.- It will be understood as homeowner the individual or corporation, who in his capacity as an owner is in possession of one or more apartments, dwellings, houses or premises referred to in article 1 herein, and for the effects of this Law, also would be considered as homeowner the individual or corporation who executed a contract through which, if complied in full, will become an owner.”

1  The Restricted Zone in Mexico (known in the past as the "Prohibited Zone") is (1) the land area within 100 kilometers of Mexico's international land borders; and (2) the land area within 50 kilometers of Mexico's ocean front areas (the coast line of Mexico).

2 Condominium Regime law of the Immovable good applicable for the Federal Districts and Federal Territories, published on December
28th  1972. This law was abolished in December 1998 when the Law on Condominium Regime for immovable goods applicable to the
Federal District was published. However the definition of “Homeowner” did not vary from the one on the prior law.

Based in this definition, then the person who has the right to vote is the Bank or trust institution, as a foreigner will never have a “capacity of owner”, nor will he, by any contract will become an owner unless he/she becomes a Mexican Citizen.

 Exception to this is the fact that the condominium regimen for that specific condo has another definition, and/or that in the Trust agreement executed between the bank and the foreigner, there is an specific clause, whereby the Trust institution enables the trustee (beneficial trust owner) to attend and vote in HOA meetings.

Our Condominium law has a different more inclusive definition. Fraction VII of Article 2 of our Condominium Law current in the State of Baja California Sur, reads as follows:
“Article 2.- for the effects of this Law, it is understood by.
VII.- Homeowner.- The individual or entity, who has the ownership or the beneficial trust rights on one or more areas of private use in a property subject to the condominium regimen, even if said rights or benefits were acquired through a private contract or preliminary contact, and for the effects of this law, the person who has executed a contract by virtue of which, once the terms are duly complied, this person becomes an owner or the holder of the beneficial trust rights of a  unit of exclusive property.”

As you can see, this definition does include the persons who have a trust, and goes further to include those who have executed a promise to trust agreement or a private contract to acquire the beneficial trust rights. So for those condominiums, they are governed by our State Law published in November 2007, and the right to vote is for  the Homeowner not the bank.

 If you would like further information or review of your specific case, you can contact us. Please note that each consultation has a fee, and there is no free e-mail consultation. Romina Ruiz Cardenas, Esq. Attorney-at-Law, Federal Public Notary for Commercial Matters (Corredor Público), www.rominaruiz.com, Office:624-143-5343 or Email: romina@rominaruiz.com