Increase dues in high rise based on floor? I.e., 4th? 25th?

We don't seem to have many high rise HOAs on this site, but maybe that doesn't matter.

We're two urban 25 story towers. An Owner has written a request to our Board for dues to be based on the floor the condo are on with the 14th floor as the "median." Dues would go up for every unit above 14 by 1%, and would go down 1% for every unit below 14.

He claims that such a plan would enhance marketability with a pretty complicated argument. In a nutshell, the lower units would sell more easily because their dues would be lower. this in turn would push prices up for the lower units therefore pushing prices up for the higher units.

Now, mind you, the upper units already get higher prices than the lower ones because of far better views

"Jim" writes that this is common in places like Chicago and NYC and would be "fairer," but he doesn't say why it would be fairer. Each tower has two elevators one stationed at the lobby level and the other at 13.

Every heard of it? Comments?

Yes, of course, Tim. Thanks. I'm mainly wondering if anyone's heard of such a plan.

Carol

What floor does Jim live on......LOL

Another creative way to create endless rounds of argument.

In my rural recreational/retirement association, the primary purpose of our HOA is to maintain the roads. Those whose properties are closer to the main highways and those who seldom visit their properties argue that they should pay less because they do not use the roads as much as those who live there full time and and those who live farther from the county roads.

There is no such thing as a totally fair assessment because not all members need to use, or make use of, all the facilities equally. Under most assessments schemes we all pay equally even though we do not benefit equally. It's kind of like a group that goes to Denny's for coffee and one guy orders a Diet Coke but you still split the tab evenly.

In the case of our roads, I suggested that we install a toll booth at each turnoff from a county road. We have dozens of such turnoffs and each toll booth would require 24-hour staffing to make sure that all owners are charged appropriately for their use of the roads. It did not take much math to realize that the cost of constructing and staffing all those toll booths would require about a fifty-fold increase in assessments to cover the additional costs. The cost of assessing a "fair" amount would skyrocket due to the costs in determining what fair really is.

Carol, my advice would be to thank Jim for his input and tell him that the board will give his proposal all the attention it deserves. Then go to Denny's for coffee.

I found these comments in the latest UCIOA

4. If size is chosen as a basis of allocation, the declarant must choose between reliance on area or volume, and the choice must be indicated in the declaration. The declarant might further refine the formula by, for example, excluding unheated areas from the calculation or by partially discounting such areas by means of a ratio. Again, the declarant must indicate the choices he has made and explain the formula he has chosen.

5. Most existing condominium statutes require that “value” be used as the basis of all allocations. Under this Act a declarant is free to select such a basis if he wishes to do so.

For example, he might designate the “par value” of each unit as a stated number of dollars or points. However, the formula used to develop the par values of the various units would have to be explained in the declaration.

For example, the declaration for a high rise project might disclose that the par value of each unit is based on the relative area of each unit on the lower floors, but increases by specified percentages at designated higher levels.

The formula for determining area in this example could be further refined in the manner suggested in Comment 4, above, and any other factors (such as the direction in which a unit faces) could also be given weight so long as the weight given to each factor is explained in the declaration.
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Since dues are determined by % allocation, I agree that unanimous agreement might be required to change, since all values must add up to “1” or 100%, and any change in % allocation of a particular Unit would probably cause a change in % allocation of another unit.

Completely changing CCR dues/ownership percentages is a HUGE deal and would likely require 100% of all owners to agree. I don't see how you are going to get 50% of the owners to agree to higher dues for no reason. Doesn't make sense. I don't even think the idea is worth discussing.

Early one in my tenure on an HOA BOD we went exploring dues increases based on the size of ones property. Our Covenant/Bylaw expert drew our attention to the docs say sayin that all dues would be equal per home regardless of size. He also dreww our attention to one vote per home regardless of size. In this HOA, size did not matter....LOL

Thanks to you all for your replies. I neither have nor had any intention to suggest to my fellow directors that we approve "Jim's" plan--when we meet on Monday about our 2013 budget--for many of the reasons you all noted.

Based on Ellie's response, I was going to Google UCIOA, but JohnC46 saved me the time. Oh, and no surprise, Jim's unit is on the 9th floor.

We are seven directors; three live on the 4th floor, one on the 5th, one on the 6th and one on the 17th. (We have 2 large commercials lots on the ground floor that are owned by the developer, which are divvied up among his firm and are occupied by him and 3 lessees; the commercial owner's rep on the Board doesn't live in our city.) Though the directors who live on the lower floors could benefit from Jim's plan, I think they'll all see beyond their personal interests.

Our original DRE report and thus our CC&Rs, specify that dues take into account unit size--a square footage variable. Larger units are assessed more than smaller ones presumably because they consume more of our HOA's water/sewer, gas (which includes hot water) and building insurance expenses. The differences are quite small, e.g., a 1300 s.f. unit is assessed $2.50 more a month that a 1250 s.f. unit. When I was a new owner, I mistakenly assumed that the larger units were assessed more because they have more windows--our 2X a year window washing annual contract is $38k.

But I still don't grasp why a unit's market value should affect assessments. Those owners, after all, paid more to buy them and pay more property taxes. I also don't get Jim's "fairness" argument because he didn't write why the existing assessments are unfair.

Carol

I would treat Jim's request with benign neglect.

If one had to rebut the arguement, one could say that larger units do consume more association provided things (water, heat, cooling ,et.) but you seem to have that covered already in a dues difference. Good for you there, many do not.

The market does dictate that views, location, units updates, etc. do play a role in unit pricing but this is a function of the free market, not an association issue.

Look at two identical size, style units. One on the 3rd floor overlooking a parking lot and one on the 25th floor overlooking the ocean. Real estate market value aside, what is the cost difference between these two units to the association? I say none?

Hope this helps.

Good one, Larry--know you're joking given the cost, even if we had space, of the construction & installation of two new elevators!

I think that the costs to operate them and for the elevator contract plus related expenses are spread out pretty fairly. With one "living" on the lobby or ground floor of each tower and the other on the 13th floor of each, I believe it works out OK.

No need for new elevators. Just add coin boxes to control how far it will go up.

Being in California, you could have the elevator accept debit, credit, or welfare cards. Maybe even tie in to EZ-Pass.

I lived in Sacramento in 2006-2007 and noticed that the light rail ticket dispensers did not accept credit cards. I just assumed that this was Sacramento's feel-good effort to eliminate discrimination against the homeless by making everyone pay cash. The irony was that the homeless just got on the trains without paying.

It is a Joke Carol...It's quite funny...The guy is basically saying the higher the floor the more you should pay in dues...Which doesn't make alot of sense. So instead telling him the higher the floor the more you have to put into the elevator makes just as much sense...It would be essentially what this guy is asking the HOA to do...If you break it down that way then he may get the hint his idea is kind of full of holes...

There are meters on pool tables...1.00 a game or the balls don't come out...Meters on parking and your car just sits there...Meters on highways for turnpikes and your just passing through...Meters are governments way of taxing those who can afford the luxury items of travel...