B.V. from Travis County, Texas writes:
Dear Mister Condo,
I just found out that the county tax records were wrong and had the 2616 square foot units listed as 2122 square feet from the beginning. Owners all pay the same amount of assessments based on wrong information for the last 12 years. The County corrected this last tax season. Our condo association has 14 unit with 1719 sq. ft. and 4 two story units that are 2616 sq. ft., all with the same foot print. Our Declaration, Plat and Plans do not have any dimensions or square feet shown or listed anywhere. The original plat is blurred and a replat filed after the community sued the developer. No building wall dimensions, common areas, or limited common areas are indicated on the Plat or Plans. The declaration does not have the units sq. ft. listed or any formula that explains the allocation or change in allocation from the original. Texas TUCA says a formula must be shown. Can Owners demand the Declaration be corrected? Does the Board have the ability to correct this without owner approval be vote since it is an error? What is a fair formula?
Mister Condo replies:
B.V., since I am not an attorney, I cannot offer you any legal advice in my column. You should most definitely seek the advice and counsel of a locally qualified community association attorney for a legal opinion on this matter. I cannot understand how the common fee formula is not included in your association’s governance documents. From what I understand there are 18 units in your association and they all pay the same amount in common fees. Are you sure there isn’t a formula in there that just says all units share equally in the common expense? If so, that is your formula. If there is truly no formula, then there needs to be an addition to the governance documents that outlines one. I would think that unit owner approval will be needed. It is also possible that anyone with a claim to the unit ownership (mortgage holders, for instance) will also have a say or vote on the matter. After all, they issued mortgages based on a certain dollar amount of common fees. The four larger units are theoretically going to pay a larger common fee based on their additional square footage. Let me be very clear here. If there is a common fee formula, that is the law of the land and it will be a major production trying to get it changes. It could also be argued that the formula followed for the past 12 years is the formula. Finally, I am guessing that the folks with the larger units aren’t going to go along with any plan that increases their burden of common fees. Common fees are often, but not always, determined by the percentage of unit ownership formula, which typically takes the total number of inhabitable square feet and divides by the individual unit square feet. In your case, the 14 units with 1719 square feet = 24,066 square feet plus the 4 units with 2616 square feet = 10,464 square feet for a total of 34,530 inhabitable square feet. That would mean units with 1719 square feet would be assessed at a rate of %4.978 annually and the larger units at 2616 square feet would be assessed at a rate of %7.576 annually. To put that in further motion, let’s assume an annual operating budget of $100,000. The 1716 square foot units would pay $4,978 annually or $414.83 per month in common fees while the larger units would pay $7,576 annually or $631.33 per month in common fees. This is as opposed to your “everybody pays the same amount” formula where all would pay $5,556 annually or $462.96 monthly. The smaller units would pay less and the larger units would pay more under a “percentage of unit ownership” formula. In my opinion, that would be a fairer distribution. However, I am not familiar with your property and there could be other factors such as water views, assigned parking, or other factors that could also be considered when determining the common fees. Whatever your association decides to do, I do hope you’ll consult with an attorney. This is a legal process and it may not be accomplished correctly or legally if the Board simply votes to change it. Good luck!