P.R. Laws tit. 31, § 1293-1
The owner or owners that submit the building to the horizontal property regime shall assume the initial administration of same, with all the powers and duties conferred by this chapter, and those conferred and imposed by the Regulations upon the Director or the Board of Directors, the President, and the Secretary.
(a) The temporary administration shall begin as soon as the first apartment is sold. From that moment onwards, the master title and the blueprints of the condominium cannot be amended without the consent of all the unit owners, except when adjusting the master title to the inscribed blueprints.
(1) After the first sale, the developer shall have the following temporary administration options:
(A) To assume all the expenses for the maintenance of the common areas and facilities until fifty-one percent (51%), or seventy-five percent (75%), of the units are sold at the discretion of the developer of the units. Thereafter, the acquirers of the units shall contribute proportionally for the payment of the projected maintenance expenses for such areas and facilities, according to the participation percentage set forth in § 1292 of this title, and thus, the developer shall contribute the amount corresponding to the remaining percentage, regardless of the number of apartments that are yet to be built or sold, or
(B) collect the proportional part of the maintenance fees for such common areas and facilities from the owners of the apartments that have been sold, according to the percentage set forth in § 1292 of this title, upon an annual budget to be prepared by the developer, pursuant to that which is set forth below in clause (6) of subsection (b) of this section. The developer shall pay the amount corresponding to the remaining percentage, regardless of the number of apartments yet to be built or sold.
Any disposition stating something other than what is set forth in paragraphs (A) and (B) of this clause above in the master title or the Regulations shall be null and void.
(2) When the developer defrays all the expenses, according to the option set forth in clause (1)(A) of this subsection, he shall not have to render audited reports of his activities, and may continue in temporary administration until fifty-one percent (51%), or seventy-five percent (75%), of the units are sold at the discretion of the developer of the units. At such a time, the unit owners shall be legally bound to assume the administration of the condominium as soon as the temporary administrator convenes the assembly for the election of the first Board of Directors, as set forth in subsection (c) of this section, once there has been compliance with all the provisions set forth in subsection (f) of this section. Assumption of the administration by the unit owners shall not imply refusal of any claims that may proceed against the developer due to the temporary administration.
(b) The temporary administrator shall have the following duties:
(1) To address all matters concerning good government, administration, surveillance, preservation, care, repair, and operations of common effects and elements, and the general and necessary services for compliance with the foregoing in this subsection.
(2) To maintain a book of unit owners with the name, signature, telephone number, mailing address, and physical address of the unit owners, keeping a record of successive transfers and leases in identical manner, and maintaining a copy of the titles that prove the ownership of each unit.
When the developer collects from the unit owners pursuant to subsection (a)(1)(B) of this section, the temporary administrator shall have the following responsibilities, as well as those stated in the foregoing paragraph:
(3) To manage the financial matters of the condominium and maintain a detailed book of all receipts and disbursements affecting the building and its administration, recording the same by date, and specifying expenses for preservation and repairs of common elements. Each disbursement shall be evidenced by a voucher, invoice, or receipt. The book of vouchers, invoices, and receipts shall be made available for the examination of the owners on working days and hours. The Temporary Administrator shall notify the owners of the location at which the same shall be available.
(4) To collect from the unit owners the amounts that each shall contribute toward the common expenses, and perform any other collections to which the community is entitled, particularly overseeing that the owner of the unsold units continues to make the deposits of the proportional amounts corresponding to such units, in the account of the community property, included in the reserve fund. The temporary administrator shall collect from the unit owners for advance maintenance fees, at the closing, one (1) monthly budgetary payment referenced in clause (6) of this subsection, and two (2) monthly payments as a special payment to the reserve fund. The temporary administrator cannot collect any other amount in advance.
(5) To notify all unit owners, after the first sale, the annual budget based upon actual and reasonable maintenance expenses projected for the following year after the first sale.
(6) To prepare the budget, overseeing that it reasonably responds to the economic needs of the condominium, without including the property preservation and maintenance expenses prior to the sale of the apartments, nor any expense related to the termination of the construction works of the building or the apartments, or to the sales process of same. The projected budget can only be modified with prior notification to all unit owners thirty (30) days in advance of the closing of the year’s budgetary operations, to take effect in the next operations year.
(7) To notify the unit owners monthly of the receipts and disbursements of the condominium and the bank balance of the account for the month preceding the notification.
(8) To maintain a book of unit owners with the name, signature, telephone number, mailing address, and physical address of the unit owners, keeping a record of successive transfers and leases in identical manner, and maintaining a copy of the titles that prove the ownership of each unit.
(9) To make available to the unit owners for their examination, all agreements made pertaining to his/her duties as Temporary Administrator.
(c) The transfer of the administration shall take place:
(1) In those cases in which the developer collects maintenance fees from the unit owners starting from the first sale, as soon as the owners choose the persons to be in charge of the administration in an extraordinary meeting that may be convened at any time by any of the individual unit owners, or
(2) as soon as the unit owners choose the persons to be in charge of the administration in an extraordinary meeting to be convened by the unit owner that submitted the building to the horizontal property regime, once more than half of the units has been individualized and transferred, or a sufficient number of units for their combined participation percentages to be more than fifty-one percent (51%).
(d) In the meeting in which all unit owners are to elect the persons to fill the directing positions, the owner or owners who up to that time had been in charge of the administration shall hand over all the information and documents set forth below to the Unit Owner’s Association.
(e) The Transition Committee.— Prior to the election of the first Board of Directors and the transfer of the administration to same, any unit owner may convene an assembly for purposes of electing a Transition Committee whose duty shall be to obtain all the pertinent information and documentation regarding the operations of the temporary administration. The assembly for the election of said Committee shall be held on the date and at the location indicated by the summons, which shall be signed by the owner or owners who are issuing the convocation, and for which quorum shall be constituted by the owners who attend, who shall designate the members of the Committee by majority.
If the developer collects maintenance fees, if the time arrives in which fifty percent (50%) of the units would have been sold without the owners having constituted the Transition Committee, the Temporary Administrator shall convene the owners no later than forty-five (45) days prior to the meeting in which the first Board of Directors shall be elected, pursuant to subsection (c) of this section.
The Transition Committee may require a detailed report of the status of the condominium, and may review all the related public documents, such as titles, use permits, agency authorizations, etc., from the temporary administrator, and from the developer when same is acting as temporary administrator. It may also review and inspect the documents pertaining to the finances of the regime, including the fidelity bond set forth below. The Committee shall have the right to make a copy any of these documents.
(f) Before the assembly set forth in subsection (c) of this section is held, the Temporary Administrator shall provide the following to the Transition Committee:
(1) The community’s accounting books, duly audited and certified by an independent certified public accountant, if the owners were charged fees for the maintenance of common areas and facilities during the temporary administration. In such a case, the auditor shall also issue an opinion regarding the reasonability of the expenses incurred for the maintenance of the common property during said temporary administration. If there were a difference between the receipts and the expenses on the date of the administration transfer, the temporary administrator shall not have the right to claim said difference from the owners, nor to compensate it with the debt that is certified.
(2) Copies certified by the authorizing notary and the authorities with jurisdiction of all the documents and public instruments that constitute the building, setting forth that the certified copy shall be issued in behalf of the Condominium Association free of charge, pursuant to §§ 4001 et seq. of Title 4.
(3) Updated Book of Unit Owners.
(4) A certification issued by the Secretary of the Department of Consumer Affairs stating that the bond required in clause (12) of this subsection has been paid.
(5) All funds belonging to the unit owners in its keeping, including any amount designated as a reserve, or which may have been otherwise withheld by the mortgager at the time of the closing of each unit.
(6) Bank accounts, deposits, securities, etc., belonging to the unit owners with their corresponding deposit and withdrawal slips, statements, bank reconciliations, and all other related documents.
(7) Certifications of the status of any legal, extra judicial, or administrative action related to the common areas, or any other aspect that affects the operations of the condominium.
(8) A certified sworn statement which states that the developer or the temporary administrator has provided the following documents to each unit owner:
(A) Copy of the Budget of the Condominium.
(B) Copy of the Master Title and a copy of the Regulations of the condominium.
(C) Copy of the use permit of the apartment.
(D) Copy of this Act and the Regulations for Condominiums of the Department of Consumer Affairs.
(9) A list of all the maintenance fees payments paid by the unit owners during the term of the temporary administration, including those paid by the developer for the yet unsold or unbuilt units.
(10) The originals of all agreements granted by the developer or the temporary administrator during their administration term.
(11) A copy of the complete set of the certified blueprints filed in the Registry of the Property showing the changes made, if any, to the original blueprints submitted pursuant to § 1292 of this title.
(12) Certified copy of the fidelity bonds that shall take effect at the time of the transfer of the administration to the Condominium Association. The bonds shall be issued by an entity authorized by the Insurance Commissioner, covering:
(A) All the maintenance fees in default which the same was legally bound to pay, as determined by the authorized public accountant who certifies the financial statements at the time of the transfer of the temporary administration to the unit owners, as set forth in this section.
(B) The negligent performance of his/her temporary administration duties. In any case, this fidelity bond shall be for an amount of not less than twenty-five thousand dollars ($25,000).
Said fidelity bonds shall be issued in behalf of the Condominium Association, and shall remain in effect for two (2) years, starting from the transfer of the administration to the unit owners.
The cost of the bonds set forth herein, which remains in effect for two years, as well as that of the related expenses for the rendering of the foregoing information and documentation shall be at the expense of the developer.
The Transition Committee shall inform the steps taken and its findings to the Condominium Association at the meeting held for the election of the Board of Directors, as set forth in subsection (c) of this section.
No agreement granted during the term in which the administration of the building was under the responsibility of the unit owner that submitted the same to the horizontal property regime shall bind the Condominium Association, unless the unit owners, by majority vote, ratify said agreement.
The developer or temporary administrator who does not comply with the duties set forth in this section shall be compelled to reimburse to the Condominium Association all the expenses incurred by the condominium to claim compliance with the referenced duties, including legal fees paid to attorneys and experts, as well as all the items owed and the damages caused by said noncompliance, all without prejudice of imposition of administrative penalties, pursuant to the provisions set forth in § 1294c of this title.
This section shall be of limited interpretation for the protection of the rights of the unit owners.
History —June 25, 1958, No. 104, p. 243, added as § 36-A on June 4, 1976, No. 157, p. 461, § 6; Apr. 5, 2003, No. 103, § 22, eff. 90 days after Apr. 5, 2003.