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In a condo, all assessments are not equal, p. 2

11/4/2015 | Real Estate Blog

We are talking about condominium association special assessments, the assessments that pay for unusual common area expenses. These are different from the regular payments (also called assessments in Pennsylvania statute) condo owners make to cover common area maintenance and shared expenses, like insurance or utilities.

The general rule is that the owners, the members of the association, pay for these added expenses according to their proportional ownership shares. In our example, units 1 and 2 were each allotted 30 shares, with 20 shares going to each of the other two units. A big ticket item would be split 30-30-20-20 among the association members.

The general rule, however, applies only if the affected common area is common to all units. Only the units that benefit from a common element have to pay for a repair or upgrade to that element. The other units may be entirely off the hook.

Say units 1 and 2 share an entryway with one another but not with units 3 and 4. When the tile wears out and the floor must be replaced in the entryway, the association levies the special assessment against units 1 and 2, the beneficiaries of the new floor. And, because they have an equal number of shares, the expense is split 50/50.

(The entryway, by the way, is technically a limited common area. Again, the key is that it benefits some but not all condo association members.)

There is an exception to the shared expenses rule. If the expense is the result of a unit owner’s negligence or misconduct, that unit owner may be solely responsible for the full expense. So, if your neighbor is having a party and accidentally sets fire to the carpet in the shared hallway, the neighbor must bear the cost of the repairs.

These are the general rules, according to statute. The important thing to remember, though, is that the controlling documents — the declaration and bylaws — may put their own spin on the rules. The law gives us the basics, the default rules for operating a condominium. If the founders see fit to fine tune the individual provisions without violating the law, they may do so.

Source: Summary of Pennsylvania Jurisprudence 2d, Eric C. Surette, October 2015, via WestlawNext