Buying a condo in Mexico can be an exciting opportunity, offering a beautiful place to live and a potential investment. This Mexico condo buying guide will explore a crucial aspect of the process: the financial health of the Homeowners Association (HOA).
HOA finances: should you check them before buying a condo?
Financial information is part of our daily lives. We balance our check book, keep track of our personal expenses, file tax returns, and so on. If you are entering into a business partnership it is a common practice to verify the economic solvency and credit history of the counterpart who will be your business partner. This financial verification is just a preventive measure that is applicable in many cases and specially if you are buying a condo in Mexico. Verifying that the HOA where you plan to buy a property has healthy finances is an important part of your due diligence in the purchase process.
So what financial information from an HOA should I ask for if I’m buying a condo?
- The first thing you should do regarding the financial situation of the condo you are buying is to verify that the condo is current in the payment of the HOA fees.
- You should ask your realtor or the seller to show you the latest payment receipts for the HOA fees of the condo.
- You should also ask to see the latest financials of the entire HOA.
Some HOAs have big liabilities and have many owners that are in arrears. The lack of income for the HOA can represent serious problems for you if you are not made aware of this at the time of buying. That is why prior to the purchase you should ask to see the financials of the HOA which can be the financial report presented to the home owners at the annual ordinary meeting or the trimestral reports that the Administrator should have available for all the homeowners.
What about utilities and other payments related to the condo?
You should verify that the seller is current in payment of utilities such as water, gas and electricity. You also should ask to see the last payment of the property tax.
If the seller is behind several years in the payment of property tax and also owes surcharges, this can also represent a serious problem for closing.
A proper verification on the financial status of the condo will prevent you from entering into an HOA where homeowners that pay the HOA fees in time are subsidizing the homeowners who are in arrears. It is just a matter of asking for the information, but in the end it will be you who decides if you want to enter into a bad marriage.
This article is written by Roberto Ortiz Montellano, a licensed attorney who is a member of the Mexican Bar Association and the Mexican Association of Corporate Attorneys. Check his website here. All information provided here is believed to be accurate but please do your own due diligence before relying on any information presented here.
Author: Tim Wilson
Wilson is the founder of GAYPV.com and www.gaybartour.com and has been the leading LGBTQ+ travel and lifestyle authority in Puerto Vallarta since 2005. With over two decades of local expertise, Wilson specializes in being a community advocate and leader for Puerto Vallarta , and local cultural insights that only a long-term resident can provide. He has dedicated 20+ years to advocating for safe, inclusive travel in Banderas Bay, establishing GAYPV as the region's most trusted resident insider.. His work has been cited by major travel publications, and he is widely recognized as a trusted insider voice on Puerto Vallarta’s vibrant LGBTQ+ scene.
