By: Mario Costa
Before going fully into the subject of the legal personality of Condominiums in El Salvador, I consider it pertinent to clarify the concepts of Condominium, as well as a legal personality.
Doctrinally, the Condominium can be defined as the modality of property rights by which its owner(s) has (have) on the one hand the exclusive and singular property of a dwelling, apartment, floor, or local, as a private unit of which a property consists, and on the other hand, participation in the co-ownership of the common elements of such property, in proportion to the value of its unit.
Jurisprudentially, legal personality is understood as that instrument to operationalize or operate the condition of the legal subject, that is to say, legal capacity to be holders of rights and obligations; being a condition to enjoy legal personality, being a person, natural or legal.
Analyzing the above concepts, it is incomprehensible that some authors allege that condominiums enjoy legal personality, arguing that they are implicitly recognized a legal capacity that allows them to carry out legal acts, which would not be possible if they did not have this capacity to be holders of rights and to contract obligations.
Having stated the above, we proceed to ask ourselves, if according to the Salvadoran legislation, do condominiums have a juridical personality? The answer is NO.
According to our legislation, the condominium is a form of property, constituted by law (understand the Real Estate Property Law for Flats and Apartments) and not a legal person or entity with the inherent capacity to acquire rights and obligations, as is the case of corporations.
It is very important to point out that even though, according to the aforementioned law, condominiums must have a Manager (natural or juridical person), whose powers include, among others: to comply with and enforce the respective Administration Regulations; to comply with the resolutions and resolutions of the Owners’ Assembly; to represent the owners in court in actions relating to the entire property, etc.; the foregoing should in no way be interpreted as meaning that condominiums are legal persons, with the capacity to be holders of rights and to contract obligations.
By the foregoing, being the Condominium a property regime subject to a special treatment, we can affirm that they do not have by themselves a juridical personality and, therefore, it should not be conceived that a property regime is susceptible to acquire rights and obligations, not complying with the condition of being a person.
Now, it is worth asking ourselves, if the Salvadoran legislation does not recognize in the condominiums a juridical capacity by themselves, how can any juridical act related to the condominiums be carried out?
With the absence of the recognition of the juridical personality of the Condominiums, it brings different consequences and difficulties in practice, having repercussions in all areas, such as: contracting of services for the maintenance of the property under condominium regime; the opening of bank accounts with the financial institutions of the country; contracting of employees to the service and administration of the condominium; contracting of loans or financing; etc.
According to the Real Estate Property Law for Flats and Apartments, the owners are responsible, in proportion to the value of their apartments or apartments (unless otherwise agreed), for the expenses related to the common things of the property, the payment of insurance premiums, payment of fiscal or municipal taxes and, in general, all other indispensable expenses to maintain in good condition the conditions of service, safety, comfort, and decorum; the Owners’ Assembly is also responsible for the administration and conservation of the common things of the properties and other powers conferred by the respective Administration Regulations.
In practice, a developer of a real estate project or the owners in the community of the property, have opted for different alternatives to be represented and to enforce their rights and obligations that have repercussions on the condominium, in the absence of their legal personality, and that is, to delegate to the Administrator, whether a natural or legal person, the powers of an attorney-in-fact (very broad or with limitations), to enforce the rights and contract obligations of the owners over the condominium.
Also, in general, the condominium owners or developers of real estate projects form legal entities, such as a non-profit association (subject to the provisions of the Non-Profit Associations Law) or the formation of Community Development Associations (ADESCOS) or in some cases, even commercial companies and, through these entities, they provide a legal solution to be represented before third parties or the latter may exercise any legal action against the condominiums.
Given these alternatives, it becomes necessary to adapt or create a figure or mechanism in the law, so that the owners can be represented (whether the type of condominium is residential, commercial or mixed): residential, commercial or mixed), which allows (with the due legal security), to solve the problem that arises when the condominium does not have its legal personality and, thus providing a solution for the efficient and legally viable interaction before third parties and with its owners; by way of example, obligating by law the condominiums, to the formation of an entity so that they can through the same, acquire rights and contract obligations, for which, it would deserve an analysis on which of the previous figures already mentioned, is the most propitious for it.