Unanimous Consent of all Unit Owners is now Required for the Approval of Special Assessments for Improvements

Ley de CondominiosOn January 10, 2017, the Supreme Court of Puerto Rico (hereinafter, the “Supreme Court”) issued an opinion in the case of Marimar Pérez Riera v. Consejo de Titulares del Condominio Marymar Condado, Momentum Management, Inc., 2017 TSPR 3. The controversy revolved around the horizontal property regime and the amount of votes required by Law 103-2003, known as the “Law of Condominiums”, 31 L.P.R.A. secs 1291 et seq. (hereinafter, the “Law of Condominiums”), to approve improvements when a special assessment (“derrama”) is to be imposed amongst unit owners. The Supreme Court concluded that a Council of Owners (hereinafter, the “Council”) requires unanimity of all unit owners in order to approve a special assessment for improvements.

In the referenced case, the Marymar Condado Condominium (hereinafter, the “Condominium”) has twenty-three (23) units and is subject to the horizontal property regime. The Council of the Condominium celebrated an ordinary assembly in which it would consider two special assessments for improvements to the Condominium, which were approved by unanimity of the unit owners present at the assembly meeting. Mrs. Marimar Pérez Riera (hereinafter, “Pérez-Riera”), unit owner not present at the aforementioned meeting, submitted several complaints, amongst them one in the Department of Consumers Affairs (hereinafter, “DACO”), arguing that the Council of the Condominium should have unanimous consent from all the unit owners in order to approve the proposed special assessments.

DACO issued a summary judgement which was later revised and confirmed by the Court of Appeals of Puerto Rico (hereinafter, the “Court of Appeals”). Both forums agreed that in order to approve special assessments for (A) improvements, (B) urgent matters and (C) extraordinary matters only the vote of the majority of the unit owners present in the ordinary meeting is required. DACO and the Court of Appeals also argued that Article 38(d)(3) of the Law of Condominiums, which requires two thirds (2/3) of the total votes of unit owners, is only applicable when approving works that require the withdrawal of funds from the reserve account of a Condominium. Pérez-Riera later requested and was granted a writ of certiorari by the Supreme Court.

The Supreme Court, in turn, gave weight to the fact that the law originally required the unanimous vote of all unit owners when approving special assessments for improvements, which requirement was later amended to reduce the number of votes required to two-thirds (2/3), but solely in those occasions where a condominium has sufficient funds to cover the improvements without the need to impose a special assessment. The Supreme Court further dictates that even though the Law of Condominiums does not expressly address the unanimity requirement, it clearly maintains the requirement of unanimity for the approval of improvements when a special assessment is to be imposed on all unit owners. Likewise, the Supreme Court concludes that when approving works for improvements if the condominium does not possess sufficient funds to cover the same, the Council must make the necessary budget adjustments to cover the proposed improvements without imposing an additional, abrupt and not consented economic burden to unit owners.

by José Fernando Rovira-Rullán, Esq. and Camille Rodríguez-Franceschini, Esq., Ferraiuoli LLC

 

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