Common Charges

Hi Lajeep,

I am not sure if my 2 cents are worth even that, but I am the treasurer for my 2 year old building. I don't know precisely how the ownership shares were allocated per apartment, but what is clear where the factors that were taken into consideration. We have a total of 12 apartments in our building- 2 per floor, and noticed that the southern exposures were given a higher percentage of ownership shares (and higher sales price)than the northern exposure apartments. Also taken into consideration was the square footage for each apartment as a total of the building and the floor/view. Perhaps a real estate attorney that drafts these agreements can elaborate further.

Once you have the % of ownership shares into the equation, then you can start figuring out the actual money side of the equation. The common charges will be split by each apartment as determined by the ownership shares. The overall common charges will be determined by the expenses and reserves set aside by the building. My building has a goal of setting aside at least 12% of our annual income toward the reserve. The developer had no reserve set aside to lure people in with artifically low carrying costs- but the entire building agreed that this was artificially low when we took over the management and the sponser moved aside and we increased the common charges to accommodate for increased costs (mostly energy related) and a reserve fund.

Take a look at the financials and the features in your building to see if it all makes sense. You don't need to be a financial genuis, but just take a common sense approach. Things to take into consideration include (not an all inclusive list): Monthly elevator maintence, Doorman, Employee taxes, Con Ed/Utility costs, Pest control, etc.

Once you have enough information on all these costs and the % ownership shares of the apartment in question, you can then determine whether the common charges make sense.