H.S. from Cook County, Illinois writes:
Dear Mister Condo,
Could you please explain how the monthly condo association fees are calculated? The property is a mixed-use, fourteen-unit building, 12 residential, and 2 commercial. Exhibit B clearly lays out the percent due of each residential unit and totals 100%. Then, it lays out the percent for each commercial unit and totals 100%. Question: the percent due by each is based on what?
Mister Condo replies:
H.S., when it comes to how common fees are determined, there are no hard and fast rules about it. Basically, the developer of the property put pen to paper and determined the formula that became Exhibit B in your condo association. Typically, factors such as unit size, location, and desirability factor into the equation. Someone with a top floor and view might pay more than a bottom unit owner. Larger units might pay more than smaller units. And so on. That being said, there are some condo associations that simply divide by the number of units and call it a day. I have seen high-rise buildings where top floors pay almost double what a bottom floor pays. At the end of the day, Exhibit B, however it was determined, is the law of the land and must be followed by unit owners forever more UNLESS (and this is unlikely) the unit owners agree to change the formula. This is very difficult and typically requires 100% approval from all unit owners (and in some cases, their mortgagors). It is what it is. All the best!