Ecuador enacts new rules for condo fees, restricts access for debtors

Ecuador has enacted significant reforms to its General Regulations of the Horizontal Property Law through Executive Decree No. 462, introducing new measures that impact the collection of fees and the administration of co-owned properties. These changes specifically target residents who are delinquent in their payments, imposing new restrictions and collection procedures.

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The reform will come into effect from its publication in the Official Registry as indicated by the decree. This act will mark the beginning of the mandatory application of the new provisions.

A key modification involves restricting access for indebted residents to communal areas and services deemed non-essential, such as swimming pools, gyms, common rooms, and visitor parking. However, the law clarifies that basic access, including pedestrian entry to the property and personal parking, along with the supply of cold potable water and basic security, cannot be restricted. These restrictions are contingent on a five-day grace period after notification, during which the resident must pay the debt or provide justification.

Before implementing any restrictions, condominium administrations must notify the delinquent co-owner and allow five days for payment or justification. Once payment is made or the debt is regularized, restrictions must be lifted within 24 hours. The reform also mandates that administrators publish monthly payment status reports for each unit and details of overdue accounts. Failure to comply with these obligations could lead to the administrator's removal and liability for economic losses incurred by the co-ownership.

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The restrictions must be lifted within twenty-four hours following full payment or regularization of the delinquency.

Furthermore, delinquent co-owners will lose their right to vote in assemblies and cannot hold administrative positions within the condominium while their obligations remain pending. Legal experts note that while the reform aims to encourage timely payments and improve financial management, challenges remain in its implementation. The ability to restrict communal areas is expected to incentivize payment, but the effectiveness will depend on consistent enforcement and clear communication.

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Co-owners who are delinquent will lose the right to vote in assemblies while they have pending obligations. Likewise, they cannot run for or hold administrative positions within the condominium.