Friday, January 9, 2009

Sage Advice?

Normally I wouldn't post someone's comments, but in this case I will make an exception.

The person making the comments, Hazen S. Colbert, lives in Mexico and Canada. He is Managing Director of HSC Financial (Canada) Inc., and its Mexican subsidiary, HSC & Associates. Mr. Hazen holds an MBA in Finance. His articles, opinions and commentary have appeared in The Globe & Mail, The Puerta Vallarta Tribune, NOW Magazine and others. He has been a contributor to The Canadian Press.

Although Mr. Hazen says Playa del Sol Costa Sur in his comments, he was actually talking about Playa del Sol Condominiums, the original Playa del Sol located on Los Muertos, also known as Playa del Sol Centro, and which is now Blue Seas. Mr. Hazen has verified to me that this is what he meant so I have changed the wording of his comments here to reflect that.

Playa del Sol Costa Sur, formerly Costa Vida, was a later addition to the Playa del Sol holdings which now include Playa del Sol Grande and Playa del Sol Los Cabos. As followers of this blog know, Mr. Molinaro just recently split Playa del Sol Condominiums from the larger group and renamed it Blue Seas. Whether this was done legally or not is still an open issue.

The Playa del Sol Condominiums is one of most bizzare legal arrangements I have ever seen in my business life. What people refer to as "fractionals" are not legal fractionals as we refer to them in Canada and the US. They are actually more like timeshares even though they are refered to as 'fractionals'. The original developer does have the legal right to make changes to "his" fractional and timeshare based real estate by changing the by-laws LEGALLY (if he can create quorum he can do it with limited support by the owners, but quorum requires rules and he didn't follow the rules), but I am mystified as to how he can rebrand the condo owners real estate, including the exclusive use common elements, under a new name. That requires more than just a change to the by-laws, it requires a change in the escritorio, and no change has occured. In addition, the developer appears to have transfered some condo common elements out of the Playa de Sol Condominiums legal structure to a new legal structure, something that is simply impossible to do because the developer does not have title to the original common elements, only the condo owners have such title.

As for the beach club, legally there is no private beach club. There may be a federal concession but that only refers to the actual business of operating the club, not allowing use of the beach. Anyone can occupy the beach using their own chairs, umbrellas etc. As for a federal concession, who owns it? First right of refusal has to go to the "owner" of the abutting property, whoever that might be.

This is going to be a long, drawn out battle. I think I would just sell out.

Well, selling out is not really an option I would like to pursue, but Mr. Hazen certainly does raise some interesting points and I appreciate him taking the time to make a comment on my blog.


  1. I agree. I attended the pre-opening party of the Blue Seas and it was grand and enabled me to see many firends and associates in one fell swoop last Nov. The fine print of the original contracts may lead to a solution but many original owners of timeshares at the former Los Muertos location appear to be standing with no valid investment anymore. The courts will probably have to decide and who knows how long that would take? This 'new' resort is mixed and very comfortable for people of all walks. The lounges on the beach are top notch as is the attentive service!

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