Assessments Common Fees Condominium Financial Governance

Validity of Condo Percentage of Unit Ownership Questioned

C.B. from Illinois writes:

Dear Mister Condo,

Hi, I live in a 48-unit building consisting of 24 2-bedrooms and 24 1-bedroom units. I understand that the 2-bedroom units owns a larger percentage than the one bedroom units and, of course, the assessment fees are more. We just had a new elevator upgrade which cost the 2-bedroom unit owners a percentage more, now we are able to have another special assessment to re-pave our parking lot, then next year will be our balconies. While I understand somewhat WHY a 2-bedroom unit owner would have to be pay more in assessments, I’m still baffled as to why they would be required to pay more toward some common areas that is equally used by everyone in the building. In this case, the elevator upgrade, the parking lot repavement. Building has 47 parking spaces that, in my opinion, are equally being used by each unit owner. Can you give me a simple straightforward answer as to WHY this is the case and, if this could be changed? Thank you!

Mister Condo replies:

C.B., the percentage of unit ownership formula is commonly used by HOAs and is the de facto standard for determining who owes what when it comes to common fees and special assessments. It is tried and proven and almost impossible to change. It certainly makes sense when thinking about the ownership ratio of the association. These owners physically own more space of their own and, in theory, use more of the common elements. A second bedroom is indicative of either more permanent residents or overnight guests. More occupants means more wear and tear on the common elements. What other formula is simple enough to take that into account when deciding when dealing with the financial responsibilities of the association. These units simply consume more of the association’s resources. While your analogy of the parking space is spot on, it is one of the few times that argument would hold water. Also, since the percentage of unit ownership was in place at the time the unit owners purchased their units, it is not a surprise or unfair to the unit owner when these assessments come due. It is quite simply the law of the land in the HOA world, has been since the beginning of common interest communities, and is likely to outlive us all. All the best!

1 thought on “Validity of Condo Percentage of Unit Ownership Questioned”

  1. In my condominium townhouse association they also use size of unit to determine % of fees paid. In reality, many of the 1st townhouse units were smaller and not as custom as the last units. However, the increase in square footage is mostly because of a screen porch being converted to an all year around room. Bedrooms and Bathrooms are the same. So in our case, the above scenario does not work. When you think of it, so many of the costs are based on the number of units, not the size….landscaping, pool, cost of roof, etc. I would think a better way would include a charge for those who rent their unit. One last problem in convincing owners who bought early that their dues need to increase.

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