Trouble starts when a development goes under, other developer simply walks away after getting, or not getting his investment back. The 64-thousand-dollar question is who then becomes the person in charge of maintaining the common areas and collecting the fees for the water and electric to the homes and especially shared spaces.
Honduran patronatos are community organizations regulated by law that serve the people of a community and coordinate with them to build amenities such as water wells, community centers or sports arenas. The municipality is involved in the funding and decision making to determine if the petitions by the patronato are feasible and necessary. If, however, a community is private, locked behind gates with guards, it is under the rule of a single “Declarant.”
In this case, a different law applies the condominium law. Previously it was called the horizontal property law. That law sets the ground rules for ownership of condominiums and shared spaces. It stipulates the payment of fees and the manner the building, or buildings will be managed. It stipulates if and when the home owners will take over management of these common areas.
Be wary of new and flashy developers who have no real skin in the game.
There are so many grey areas in this law that one become confused trying to decipher it all. There aren’t any clear guidelines in the event of a dispute with the developer and the law does not set out a process how to handle such disagreements. Many projects on Roatan went bankrupt after the US market crashed and the Honduran “coup” of 2009 took place leaving people who bought land or condos in these developments holding the bag. The banks took over these properties and have done little or nothing to maintain, or secure the properties from looters.
There are developments that existed on the island long before the laws caught up to the reality. There are internal covenants and restrictions filed with titles to developments that directly contradict the current laws. These conundrums often end up in court and you all know my opinion of the court system so let’s not go there.
I’m writing this as a warning and as a person who lives under a HOA and not under the rule of a single “declarant.” In other words: “be careful where you purchase.” Make sure the project has a long history of great relationships with the owners and the developer and make sure the history of the upkeep of the common areas is decent.
Be wary of new and flashy developers who have no real skin in the game. Some developers have noprior real background in real estate development and are out for the quick buck. Read the fine print on those covenants and restrictions and make sure there is a property management office you can walk into to get answers. In my case it made a world of difference between my previous living conditions and my current one.