Re: Common vs Limited Common Elements [was Exterior modifications
From: Diana Carroll (dianaecarrollgmail.com)
Date: Wed, 19 Feb 2014 08:25:36 -0800 (PST)
Our schedule of beneficial interest is made more complicated by the fact
that a quarter of our units are designated "affordable" home (per the
Massachusetts affordable housing law called 40B.)  These were/will be sold
at a much lower price than the market rate units, and also have a lower
beneficial interest, and therefore lower condo fees.

Our initial schedule of beneficial interest is more or less based on the
relative initial asking price of the various units, which is only loosely
connected to square footage.   In the 5 years since we moved in, there have
been lots of shifts, including some folks (like me) buying basements, or
buying or selling carports, or finishing living space, or what have you.

Any new formula we might come up with would need to take into account the
affordable units, which (both legally and ethically) must continue to have
lower fees than their same-sized market-rate units.

There hasn't been any grumbling (yet) but I do wonder if a fairer
distribution of assessments would be beneficial to the community.
 But...more daunting than the negotiation with the bank is the idea of
trying to reach consensus on this *within* the community!  *shudder*  So,
for now, sleeping dogs are left lying.

One mitigating factor for us is that in addition to our HOA with its
legally specified apportionment of expenses, we also have an "cohousing
group" which works entirely differently, with a voluntary sliding scale in
which people pledge a certain amount.  I always take into account in my
mind the fact that I'm "skating" on condo fees due to the technical
beneficial interest loophole, and pledge more than I might otherwise to
make up for it.  I don't know if any of the other "skaters" do so though.
 (Many are latecomers to the community who may not even be aware they *are*
skating!)

Diana


On Wed, Feb 19, 2014 at 10:54 AM, Sharon Villines <sharon [at] 
sharonvillines.com
> wrote:

>
>
> On Feb 18, 2014, at 4:32 PM, Diana Carroll <dianaecarroll [at] gmail.com>
> wrote:
>
> > Can you say more about this?  Why would building a deck (or in our
> current
> > example, an access ramp) in common space automatically change the
> > classification of the space?  In this case, I was assuming the space
> > continues to be common unless we take some legal action to change it
> (such
> > as the easement I was wondering about.)
>
> As a previous poster noted, the legal opinion in their case was that it de
> facto becomes limited because it is not available to other residents. I
> noted this in a previous message but wanted to emphasize it.
>
> Common means common to all owners. Limited means limited to one or more
> owners.
>
> The Limited Common Elements should be factored in to the Condo fees so
> those who have more Limited Common Elements pay more to cover the added
> maintenance costs, taxes on exclusive use SF, etc.
>
> As Ann said, sometimes condo fees are based on Percentage Interest and
> sometimes on SF. Ours are split between the two 50-50. Percentage interest
> can be based on many things including one or more of the following:
> Interior SF, Limited Common Elements, basements, storage space, decks,
> desirability, nicer views, initial selling price, etc.
>
> SF is usually Interior SF, basement space, etc. In DC the interior SF is
> valued at 100%, the basement SF at 20%, etc. Each Limited Common Element
> can be valued differently. One way is to treat them like basements -- 20%
> of square footage.
>
> This needs to be done upfront. Unfortunately we had to publish projected
> condo fees before construction was completed and some Limited Common
> Elements never got built or were built in such a way that the owners no
> longer wanted them. So the condo fees do not reflect the SF numbers but the
> original plans. Changing it has been a nightmare of spreadsheets and
> statistics. This was exacerbated by having a developer who had his own
> lawyer and architectural firm none of whom had never done a condo before.
>
> Talk to other condos about these issues, not just a lawyer. You need to
> understand the problems of each choice, not just the law or the lawyer's
> view point. They may never have lived in a condo, which are uncommon in
> many areas. You need to hear from people with living experience. How much
> individuation in design is worth the hassle? What are the maintenance
> issues? How have residents interpreted various restrictions? How do you
> design the community so it is clear what is Common and what is Limited?
>
> Sharon
> ----
> Sharon Villines
> Takoma Village Cohousing, Washington DC
> http://www.takomavillage.org
>
>
>
>
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