Considering Allocation of Common Costs
From: Jim Bronson (jimbronsonashlandgmail.com)
Date: Tue, 9 Mar 2021 15:37:16 -0800 (PST)
*Considering Allocation of Common Costs*

The HOA allocates *common costs* monthly or quarterly;

each unit pays their* proportion* of the total



For Example

*Common Costs* =

 electricity +

 water +

 sewer +

 internet +

 garbage/recycling +

 insurance for common areas +



  professional cleaning of common house +

  funding for other maintenance +

   reserves +

   added features (like a hot tub) +

   *committee activities*

   *Total Common Costs*



*EXAMPLE:   An Accounting Algorithm for Allocating Common Costs*

*                     Based on # of adults and unit square footage:*



*Each Unit is given an algorithm called Common Cost Proportion: CCP *



*CCP* = (Proportion of Adults + Proportion of Sq. Ft.)/2



Unit                              M               N                O
            P                Total

# Adults in
Unit             1                2                2                4
                 9

Unit Sq.
Ft.               1000          1500          1500          2000
      6000



*CCP* for M = (1/9 + 1000/6000)  /2 = .1388

*CCP* for N = (2/9 + 1500/6000)  /2 = .2362

*CCP* for O = (2/9 + 1500/6000)  /2 = .2362

*CCP* for P = (4/9 + 2000/6000)  /2 = .*3888*

                                                       1.0000
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