Horizontal Property Law

The right of horizontal property is hereby established over buildings divided into stories or units susceptible of independent use, granting to the holder of each one of them, in addition to exclusive and singular property ownership thereof, a joint and inseparable right of co-ownership over the remaining elements, appurtenances, and common services of the property.

The provisions of this law apply only to the building or apartment house whose sole owner or all owners of the property thereof, if there is more than one, expressly declare their will to subject it to the regime established in this law, documenting such will in the Public Deed which shall be registered in the Property Registry.

The various stories and the apartments or rooms into which each story of the same building is divided, which are independent and which have an exit to the public road or to a determined common space that leads to said road, may belong to different owners, in accordance with the provisions of this law.

Under the same conditions, each story, apartment, or room of the same building may belong in condominium to two or more persons.

For the purposes of this Law, story is understood to mean the set of apartments or rooms bounded by determined horizontal planes in a building of several stories; apartment means the set of several rooms that for a determined purpose occupies all or part of a building; and room means that constituted by a single chamber. Similarly, common service goods are understood to be all those that have been established for the use of all owners.

Each owner shall exercise full ownership rights over his story, apartment, or room and shall be a co-owner of all common service goods.

Owners may, without the need for consent of other owners, transfer or convey by any legal act inter vivos or causa mortis the story, apartment, or room that belongs to them, or establish real rights or other encumbrances thereon, with the formalities and requirements demanded by law.

In every building subject to the Horizontal Property Regime, stories, apartments, or rooms may be designated for dwellings, offices, the exploitation of any industry or commerce, or any other type of independent use, in accordance with what is expressly specified in the respective deed or with the provisions of the laws and regulations applicable thereto.

The respective owner or owners shall bear the costs necessary for the maintenance and preservation of their respective story, apartment, or room, as well as the costs of repair, cleaning, security, and improvements to the works and installations existing within their locales or dependencies. They shall also be responsible, in proportion to the basic value of their stories, apartments, or rooms, for the expenses of administration, preservation, and repair of the parts or common service goods of the building, indispensable for maintaining its conditions of safety, comfort, and decorum.

Reforms intended for the improvement of the building or the rational and comfortable use of the elements of common use, as well as those that modify the general structure thereof, must be made with the express consent of the majority of the owners. When such reforms affect the private right of one or more holders in their respective rooms, apartments, or stories, the express consent of the same shall also be obtained.

When the building or the common service goods require urgent or necessary repairs for their preservation or safety, any of the owners, in the absence or lack of an Administrator, may carry them out at his cost and shall have the right to reimbursement of the expenses incurred upon prior verification. The urgency or necessity of the works and their cost shall be previously estimated by the majority of the owners and, in the absence thereof, by the respective Civil Court Judge, at the request of any of them.

The owner or owners of the top story may not carry out new constructions thereon without the consent of the owners of the other stories, apartments, or rooms and without the permission of the corresponding authority. Under the same conditions and with the concurrence of the requirements set forth, the owner or owners of the ground floor or basement may not carry out works that jeopardize the solidity, safety, and preservation of the building, such as excavations, cellars, and others of the same nature.

Owners are prohibited from making modifications in their respective rooms, apartments, or stories that may affect the safety and solidity of the building or that of common goods, and also from changing the exterior form thereof or painting the exterior walls with tonalities different from those of the whole.

Common service goods are considered to include, in addition to the soil on which the building is constructed:

• a)

  The foundations, columns, beams, slabs, ceilings, rooftops, patios, gardens, vestibules, hallways, entrance doors, garages, parking areas, stairs, and elevators;

• b)

  General service installations, such as potable water, sanitary works, drainage, electrical energy, air conditioning, heating, refrigeration, telephone, gas, and incinerators;

• c)

  Locales for the lodging of the porter or guardian;

• d)

  The partition walls of the apartments or rooms existing in each story; and,

• e)

  In general all other works and installations made for the same purpose.

Common service goods shall be maintained in forced indivisibility and the cessation of their co-ownership may not be demanded.

Notwithstanding the mandatory nature of the community, agreements may be celebrated among the owners regarding the use of basements and terraces.

Each owner may make use of the common service property and dependencies in accordance with their purpose, without prejudice to the legitimate rights of others.

The right of each owner over the common service property and dependencies shall be proportional to the basic value of each floor, apartment, or room of their exclusive ownership, which shall be fixed by mutual agreement of the parties and, in the absence thereof, by the value assigned to them for purposes of payment of tax on real property.

The rights of each owner over common service property are inseparable from the ownership, possession, use, and enjoyment of their respective floor, apartment, or room and, consequently, in the transfers or encumbrances made or constituted thereon, such rights shall be understood to be included and in no case may such acts be performed independently.

The profits and common expenses of the building shall be distributed among the owners of rooms, apartments, and floors in accordance with the percentage that each represents in the basic value of the building.

Each owner or occupant of rooms, apartments, or floors is prohibited from:

• a)

  Dedicating them to illicit purposes or ends different from those given to the building;

• b)

  Disturbing in any manner the tranquility of other occupants of the building; and,

• c)

  Committing acts that offend against morality and good customs. In floors intended for dwellings, the performance of work or commerce that does not cause inconvenience to the co-owners or inhabitants is not considered contrary to their purpose.

The violation of any of the prohibitions contained in the preceding article may be reported by the injured party before the competent Judge; and if the violations are proven, the Judge shall order the cessation of the acts and shall impose a fine of one hundred to one thousand lempiras on the guilty party, who shall also be liable for damages and losses that may be applicable. When the offender is an owner, inhabitant, or occupant, and repeats the prohibited act or commits any other, the fine may be doubled and may be increased up to ten times its value, according to the number of recidivisms committed. If the offender is not an owner, inhabitant, or occupant, the Judge, at the request of the injured party or their representative, shall evict him based on the judgment rendered.

The transmission or encumbrance of a floor, apartment, or room that is only in the project stage and construction has not yet begun may not be transmitted; but if construction has already been initiated, it may be transmitted or encumbered, with the understanding that for this purpose the participation that corresponds to the transferor, or to the debtor as the case may be, in the common service property and in particular what has already been constructed of the floor, apartment, or room shall be understood as acquired or encumbered by the new owner, with the acquirer being subrogated in the rights of the transferor.

In contracts for the sale of floors, apartments, or rooms whose price is to be paid by means of the installment system, it cannot be stipulated that the failure to pay one or more installments shall give rise to the rescission of the contract, deem the term vencido, and reserves to the seller, as damages and losses, the installments already paid. It shall be the responsibility of the competent Civil Court of First Instance to fix, in accordance with the circumstances, the compensation that shall correspond to the seller for the use of the property that the buyer in arrears has made. Any provision or agreement that contradicts the content of this article is considered null.

The Regime of "Horizontal Property" and the right of ownership over the room, apartment, or floor of a building formed by several floors are constituted and acquired by means of a public deed duly registered in the Registry of Real Property.

For the purposes of the preceding article, the deed of constitution of the Regime of "Horizontal Property" must contain the following requirements:

• a)

  Clear and precise expression of the will of the owner or owners to subject their property to the regime of this Law;

• b)

  Situation, area, dimensions, and boundaries of the land and detailed description of the building;

• c)

  Description of each floor, apartment, or room, its location, the number by which it is identified, its measurements, and the number of rooms it contains;

• d)

  The total value assigned to the property and the particular value of each floor, apartment, or room;

• e)

  Description of the common service property of the building and the identification of the percentage to which each of the owners is entitled over the same;

• f)

  Clear indication of the purpose given to the building; and,

• g)

  Any other data or provision that the grantor or grantors consider appropriate.

The public deed shall also contain transcriptions of the Co-owner Regime and Administration Regime.

No Notary shall authorize a public deed transferring ownership or other real acts and constituting encumbrances affecting property subject to the Horizontal Property Regime unless the deed constituting the Real Property Horizontal Regime has been previously registered.

For property to be constituted and maintained within the Horizontal Property Regime, it must be free of encumbrances or claims of any nature; and, in such case, with the express consent of the persons in whose favor the encumbrances appear registered or who have the right to make claims.

Once the Regime is constituted, by unanimous resolution of the owners all or part of the property may be encumbered, but in this case, each individual owner must be assigned the amount or portion of the encumbrance that they must guarantee.

In cases of mortgage of the entirety of the building or of one or several individual units thereof, the provisions of Chapter II, Title XIII, Book IV of the Civil Code shall apply, insofar as they do not alter the nature of the System of "Horizontal Property".

In the public deed by which the ownership of an individual property of the building is transferred, the Notary shall certify having reviewed the evidence provided by the Administrator that the owner is current with common expenses, or in the event applicable, the amounts pending payment for such matters, in accordance with what appears recorded in the respective books.

The holders of rooms, apartments or units shall have preferential rights among themselves, under equal prices and conditions, in sales that any of them may enter into with third parties. For this purpose, the seller is obligated to notify the other holders so that, within a term of fifteen (15) days, they may exercise such right; after said term expires without their doing so, the alienation may be freely executed.

The lack of notification shall give the holder who considers themselves injured the right of retraction to acquire the room, apartment or unit at the price of the alienation.

When a room, apartment or unit belongs pro indiviso to several persons and one of them transfers their share, the other co-owners shall have the right of first refusal and right of retraction with preference over other holders of the building or to a third party. CHAPTER III OF REGISTRATION

In the Registry of Real Property, a special book shall be designated for the registration of land and buildings subject to the System of Horizontal Property and separately, of the different units, apartments and rooms of the same building, when they belong to different owners and meet the requirements set forth in this Law.

Every registration made in the Registry shall contain the following circumstances:

• a)

  Description of the land, location, superficial extent and boundaries. If it appears in the corresponding deed, its name, number and acquisition value shall also be stated;

• b)

  Description of the constructions existing on the land, indicating the area they occupy, the materials used in their construction and the number of units, apartments and independent rooms of which it consists, and the estimated value thereof;

• c)

  Description of each unit, apartment or room individualizing its location, rooms that comprise it, number and any other identifying data, and the estimated value of each one;

• d)

  The nature, extent, conditions and encumbrances of any kind of right that is registered;

• e)

  The nature, extent, conditions and encumbrances of the right upon which the one that is the subject of the registration is constituted;

• f)

  Name, surname, profession and domicile of the person transferring or constituting the right to be registered and the same information regarding the person in whose favor the registration is made. If they are not natural persons, the name, trade name or designation of the respective association or company shall be stated;

• g)

  The class of title being registered and its date;

• h)

  The name and surname of the Notary or Cartulary Judge who authorized the deed to be registered; and,

• i)

  The date of presentation of the deed to the Registry, stating the time.

In the margin of the registration of the land and building, a note shall be taken of the transfers that may be made in any capacity by the holders of each room, apartment or unit.

From every registration made in the other Registries concerning the land and the entirety of the building, as well as of the rooms, apartments or units, a marginal note shall be extended in the respective registration in the Registry containing the "Horizontal Property".

In the respective entry, reference shall be made to the commonly used assets existing in general in favor of the holder or holders of the entire building, and, where applicable, those that correspond in a limited manner to each unit, apartment or room.

The addition of new units or the acquisition of new portions of adjoining land made by the entirety of the holders shall be registered, the land by forming a single body with the land on which the building is constituted; and the new unit, as an improvement or expansion of the building and also in an independent manner, as it constitutes individual property.

The total or partial cancellation of encumbrances affecting the building in general and its commonly used assets shall be noted in marginal form in the respective entry of registration of the land and building. When such cancellation refers exclusively and separately to a unit, apartment or room, the annotation referred to in this provision shall be made in the margin of the entry that independently corresponds to each one of them.

Every entry made in the Registry, as well as the reference notes recorded in the deeds, shall be preceded by the words "Horizontal Property".

The general provisions contained in Title XVII, Book IV of the Civil Code and the corresponding provisions of the Real Property Registry Regulation shall apply to the Registry of "Horizontal Property". CHAPTER IV OF ADMINISTRATION AND INSURANCE

The administration of buildings subject to the System of "Horizontal Property" shall be governed by the provisions contained in the deed of constitution and in the Regulation that shall be attached thereto, which shall be obligatory for both the owners and their successors.

The Horizontal Property Regulations and Administration shall contain:

• a)

  Form of administration, indicating whether it shall be in charge of an Administrator or of a Council or Administrative Board; the rules relating to the designation of the Administrator, Council or Administrative Board; as well as matters relating to the exercise of their rights and attributions that correspond to the Assembly of Owners;

• b)

  Requirements that shall be demanded to be elected Administrator or member of the Council or Administrative Board;

• c)

  Powers with which the Administrator or the Council or Administrative Board shall be invested;

• d)

  Form in which the Administrator or the members of the Council or Administrative Board shall be appointed;

• e)

  Term that shall be assigned to the Administrator, Council or Administrative Board for the performance of their office;

• f)

  Date on which accounts of the Administration shall be rendered;

• g)

  Proportion and form of payment of the contribution of the owners to cover the common expenses of the building in general and of their respective floors, apartments or dwelling units in particular; and,

• h)

  Form of convening and frequency of the Assemblies of Owners and majority necessary for the holding of ordinary and extraordinary sessions, as well as for issuing resolutions.

The Administrator or the President of the Council or Administrative Board shall have the legal representation of all the owners in all judicial and extrajudicial matters that are brought in relation to the common interests of all of them, both in their capacity as plaintiffs or as defendants and to perform all kinds of acts and enter into all kinds of contracts, except those that by their nature require express authorization, in accordance with the Law.

Matters of common interest that are not included within the powers conferred upon the persons exercising the Administration must be resolved by the owners in assembly.

The Assembly of Owners shall meet ordinarily at least once a year, and extraordinarily when convened to know and resolve those matters that by their importance require the participation of all the owners.

The Assembly shall annually hear the Report of the work performed in the previous year, which shall be presented by the Administrator, the Council or Administrative Board; approve the Budget of Expenses for the following period and determine the form in which the funds to cover it shall be obtained. The resolutions adopted by the Assembly shall be of general observance and shall bind the owners, including the dissenting or absent ones.

The convening for an Ordinary Assembly shall be made by means of notices addressed to each of the owners with fifteen (15) days in advance. For extraordinary sessions, the convening shall be made in the indicated form, with three (3) days in advance, stating the reason thereof. The convening shall be made by the Administrator, the Council or the Administrative Board. The owners may also convene the Assembly, in the form established by the Regulations.

The Administrator, the Council of Administration or the Administrative Board, in addition to the powers granted to it by the Regulations and those that the Assembly may have assigned to it, shall have the following:

• a)

  To appoint and remove the employees of the building and set them a salary;

• b)

  To care for and supervise the common service property;

• c)

  To order urgent repairs of things or common service property of the building;

• d)

  To ensure that order is maintained in the building, that the intended use of the different floors, apartments or dwelling units is complied with and that sanitary measures are observed;

• e)

  To collect from each owner what corresponds to him in the common expenses and to make payments; and,

• f)

  To execute the resolutions of the Assemblies of Owners.

The Administrator, Council or Administrative Board shall serve for one year in the exercise of their functions, which shall be considered extended until substitutes are elected or they take possession of their office. Those appointed may, in any case, be removed in an extraordinary meeting of owners convened for that purpose. The Administrator and the members of the Council of Administration may be reelected.

The titleholders, by agreement of those representing the majority, may insure the building, the individual units and the common service property against risks, without prejudice to the right that corresponds to each one to insure at their own expense their dwelling unit, apartment or floor.

In case a loss covered by insurance occurs, the proceeds of the indemnity shall be allocated, in the first place, to cancel the liens that affect the building, and in the second place, to the repair or reconstruction thereof. The reconstruction of the building shall be carried out, prior to a resolution that the Assembly of Owners shall issue for this purpose, which in turn shall determine the form and proportion in which the titleholders shall participate in the cost of the reconstruction work, if the amount of the insurance is not sufficient to cover it.

The controversies of all kinds that arise between the owners of dwelling units, apartments or floors of a building subject to the "Horizontal Property" Regime, tenants, usufructuaries and occupants in general, among themselves, between one another or with the Administrator of the building, shall be processed before the Court of First Instance in Civil Matters of the Department in which the property is located, which shall issue resolutions in accordance with the Procedure that according to the nature of the action corresponds in accordance with the Code of Procedures.

The Horizontal Property Regime shall be terminated by express disposition of the owner or owners of the individual units of the building, by means of the favorable vote of two-thirds of the owners, in Assembly of the same. However, the minority that is dissatisfied with the termination of the Regime may acquire the individual units of those who vote for the termination of the Regime, in accordance with the judicial valuation thereof. This resolution may only be adopted when the individual units of the building are free of liens, restrictions or claims of any kind or in the case that the persons in whose favor said liens, restrictions or claims are registered manifest their agreement with the termination.

In case of total or partial destruction of more than two-thirds of the building, any of the owners may request the sale of the land and materials. If the majority does not resolve it in that manner, recourse may be had to the judicial authority. If the destruction is less, the majority may compel the minority to contribute to the reconstruction, and in case the minority refuses to do so, it shall be authorized to acquire the part thereof, prior to judicial valuation.

In case of ruin or deterioration of the building, the majority representing more than half of its value may resolve its demolition and the sale of the land and materials. If reconstruction is resolved, the minority may be compelled to contribute to it, but the majority may acquire the part of the dissenting owners, prior to judicial valuation.

For the termination of the "Horizontal Property" Regime to take effect, the resolution and the form in which it is carried out shall be recorded in the public deed and registered in the respective Property Registry.

This Decree shall enter into force twenty days after its publication in the Official Gazette "La Gaceta". Given in Tegucigalpa, D. C., on the twenty-third day of the month of October of one thousand nine hundred sixty-five. Issued: October 23, 1965

Published: January 25, 1966