Curbed University delivers insider tips and non-boring advice on how to buy, sell, or rent a home or apartment. Additional questions welcomed to email@example.com. Today's topic: monthly fees!
Today's Curbed U lesson is short and sweet. Those pesky monthly fees that you're always having to pay. How are they calculated? This is how:
Condos: Common charges in a condo are calculated by taking each unit owner's percentage of common interests and multiplying it by the total operating costs of the building. Percentage of common interests is figured based mostly on the total amount of space that an apartment occupies, but also on other factors, such as its location within the building. A penthouse, therefore, would generally have higher common charges per square foot than a second-floor pad. The total operating costs of the building include things like heat, hot water, electricity in common areas such hallways and the lobby, building staff, and amenities such as pools, gyms, concierge, etc. Subtracted from that total is any income received by the building from things like laundry rooms. So, for example, if your building costs $10,100/month to keep running, makes $100/month from the vending machine in the lobby, and your apartment represents 10 percent of the common elements of the building, you will owe $1,000/month in common charges (($10,100 - $100) x .10). Also, you should move into a real building.
Co-ops: Maintenance charges in a co-op are calculated the same way, but instead of the percentage of common interests, co-ops have shares. Each co-op building functions as a corporation with a total number of shares and each unit within the building is allocated a certain number of them. That allocation is based, again, primarily on the relative size of each apartment, but also takes into account other factors such as location and desirability of views. So co-op maintenance charges are calculated by taking the total operating costs of the building, dividing them by the total number of shares in the building, and multiplying that by the number of shares allocated to any one apartment. In addition, the operating costs of the co-op include property taxes, whereas in condos, taxes are paid separately from common charges. It should also be noted that common charges and maintenance charges are non-negotiable.
· Those Monthly Charges in Co-ops and Condos [NYT]
· Curbed University archives [Curbed]