Condo common-expense allocations
Who pays what share of the condo's common expenses, and who decides.
A condo's declaration, not custom or convenience, fixes each unit's common-expense share. State law requires the declaration to state the formula, and requires all shares to add up to 100 percent. Equal per-unit shares and value-proportional shares are both legally valid, and a single condo can even use different formulas for different purposes.
The declaration fixes the formula
A board cannot decide, in a given year, that expenses should split "however seems fair." The recorded declaration, the document that creates the condominium in the first place, has to spell out the formula in writing, and every unit's share has to be traceable back to it.
"[The declaration] shall allocate a fraction or percentage of undivided interests in the common elements and in the common expenses" to each unit, and shall state "the formulas used to establish those allocations."
Source: North Carolina General Statutes §47C-2-107, North Carolina General Assembly
Multiple states confirm the same idea: the percentages assigned across every unit in the condo have to add up to 100 percent, rounding aside. Exactly how a shortfall or drafting error in those percentages gets corrected differs by state. Check your own declaration and your state's condominium statute.
Equal shares and value-based shares are both legal
"Equal shares" is not a fallback for associations that could not agree on something fancier. It is one of two common, equally valid models. A declaration can split expenses by unit value, square footage, or another formula that tracks the relative benefit each unit gets from the common elements, or it can simply split expenses evenly across every unit.
"The allocation may be by percentage, fraction, formula, or any other method which indicates the relative liabilities for common expenses," and "if an equal liability for common expenses is allocated to each unit, the declaration may merely so state."
Source: O.C.G.A. §44-3-80, Georgia General Assembly
Neither model is a workaround. Which one governs a given condo is simply whatever the declaration says.
One condo can run more than one formula
A unit's common-expense share does not have to match its voting weight, and it does not have to match its share of the common elements either. A declaration can, for example, split expenses by unit value while giving every unit exactly one vote.
"The items need not be allocated the same for all purposes."
Source: Minn. Stat. §515A.2-108, Office of the Revisor of Statutes, Minnesota
If your expense bill and your ballot both feel like they carry different weight, that is not necessarily an error. Read the declaration's allocation section on its own terms, separate from its voting section.
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
Your declaration says every unit pays an equal one-twentieth share of common expenses, though unit sizes vary widely. A new owner insists this is illegal. What's true?
The board discovers the recorded declaration lists common-expense percentages that add up to 97 percent, not 100. What does that signal?
A condo's declaration assigns expense shares by unit value but assigns one vote per unit regardless of value. An owner claims this must be a drafting error. What's true?
Sources
- North Carolina General Statutes §47C-2-107, North Carolina General Assembly
- 68 Pa.C.S. §3208, Pennsylvania General Assembly
- O.C.G.A. §44-3-80, Georgia General Assembly
- Minn. Stat. §515A.2-108, Office of the Revisor of Statutes, Minnesota
Assessments
Next, see how these allocation shares actually turn into the number on your assessment notice: How assessments are calculated.
Whether percentages must total exactly 100 percent, how a drafting shortfall gets corrected, and whether your state's default allocation method is equal or value-based all vary by state and by your own declaration.