Dues based on occupants per unit

We have a small HOA with 4 units in the building, all of differing sizes. The dues for the HOA include insurance, maintenance, electricity, water and garbage. The water and garbage are calculated per occupant in the unit recognizing that 3 people use more water and create more garbage than 1 person. We just had a change in ownership and so 3 people moved out of 1 unit and 1 person moved in, so all of our expenses went up. However, there are now a total of 6 people in the building with 3 living in the smallest unit (the only rental unit). Thus, there HOA has gone up significantly and the owner is upset. She is arguing that other people have visitors, significant others, family members who come and stay for long periods of time. For those who calculate your HOA dues this way, how have you addressed this issue? We have been working well with the current CC&R for the past 13 years without this issue coming up. I would appreciate any advise and/or suggestions.

Well, first any changes have to be amended into the recorded CCRs. Have a lawyer do it and it is a substantial cost given the number of units. My suggestion is make the assessments equal for all units. It will never be equal, but must easier to manage long term.

Hi Tamar.
We deal with water differently than other costs. Would help if you could provide the following info:
How much do you pay for insurance? maintenance? electricity? water? garbage?
What's your lowest and highest bill for electricity? for water?

I've never heard of dues being calculated this way, and I agree with the others that you should check the CC&Rs carefully to make sure they really do say this.

The CCR section you posted below is pretty clear, the dues are based on a "census" twice a year. If an owner is unhappy with that process, they should work to get the CCRs changed using the appropriate procedure.

I think it's a silly idea - if you're going to set the assessment based on the number of people in the units, you'll have to keep track of who moved in or out, how long did they stay (you really can't mandate the maximum amount of time someone can stay in one's home). Will you adjust the rate after someone moves out, and by how much. Too much of a headache.

Your assessments will increase anyway because insurance, maintenance, electricity, water, and garbage are bound to go up anyway. A better approach would be to look at people's actions and see what behavior changes can be made there. For example, you could reduce garbage by getting some recycling bins so some of the stuff could go in there, thus reducing what goes to the landfill. Check around the buildings to see if there are issues with water leaks and fix them. Encourage everyone to use compact bulbs.

As for insurance, try shopping around for that. Unfortunately, you may find HOA insurance can be hard to get and it's not at all cheap. You might want to talk to your agent to look through the policy to see where you can add or subtract coverage. Of course, that may also mean homeowners will have to take on more maintenance so the association won't have to. Which will also mean an adjustment to your governing documents.

I assume everyone's on one water and electrical line - is there a way you can put everyone on separate meters so each household can pay their own bill? In my last apartment complex, the management was on a budget plan with the electric company, and at the end of the winter, they'd get a bill for the difference, then that would be divided among the tenants. They'd send a separate bill for that and you knew to expect it because it was written into your lease.

Just saying: The unit that just had a change of ownership should see its expenses go down, from 3/8 to 1/6 of the total bill for {water and garbage}.

I imagine water is pretty expensive in California.



TamarB, thank you for later quoting the covenant verbatim. Some approaches I would consider:

-- Write the upset landlady a polite letter saying: (1) you understand she feels the covenant is unfair. but respectfully, and pursuant to California condominium disclosure requirements, she knew about the covenant at the time she made the decision to buy a unit; (2) If she wishes to change the covenant, then pursuant to CC&R ___ (the covenant on amendments), she needs to lobby the other owners (all three of them). Else the board is required to comply and enforce the covenants as written.

-- Write the upset landlady that there is no perfectly fair way to allocate water given the infrastructure of the building. She might bear in mind that one person could easily use more water than say two people who are careful about their water use, showering at the gym and being out of town a lot, say.

-- Propose to the upset landlady that she pass the cost of water and garbage along to her tenants. One of the bonuses of this is that it is more likely to compel the tenants to be careful about water use.

-- Is it possible to "sub-meter" each unit so that each unit receives its own water bill? Many condos in California have done this. Companies exist that specialize in sub-meter installation. They advertise the savings in water bills that results, on account of residents being more mindful about their water use.

Googling on {sub-metering California} yields a number of sites that have testimonials from satisfied customers. This came to my attention several years ago when my former condominium was considering sub-metering.

CathyA3 is correct to point this out. It appears she too is familiar with companies that specialize in this.

My former condo's cost-benefit analysis likewise indicated the cost of retro-fitting would not pay for itself for many years. Still, as the cost of water goes up, and depending on how the present piping is laid out, it may make sense. Also the OP's four-unit condo may have a shutoff valve for each unit. This makes sub-metering much easier.

Then again, thee solution for the OP's situation seems to me to be for the landlord to put in the lease that the occupants pay for water and garbage.

Not sure what your meaning is. Just sayin': I do not believe in letting the (tax) tail wag the dog.

It was about six years ago that my former condo was looking at sub-metering. The three or so companies who provided promotional material all offered remote reading sub-metering systems. The plan was for the condo management to remote read (via computer) the water usage, and bill accordingly. One of my concerns is that I felt the high-school diploma'd management had many a time shown they could not handle arithmetic very well. Plus I had seen the manager urge fining one owner x for a certain violation and ignore other owners committing the same violation. A sub-metering system where the management figured the billing would have been just one more tool for the manager to use to harass residents. Plus, OMG, the sub-metering could only be done on the hot water supply line, so the total water usage would be an estimate(!) based on the hot water usage. Tack on the cost of condo labor, and it was hard to make sub-metering attractive. The manager was strangely eager to sub-meter the units, arguing inter alia that her health insurance costs (paid for by the condo) were going up, and the condo would have to find the money somewhere. I privately rolled my eyes. The board never bought the manager's arguments for sub-metering.

I'm in the bay area and want to propose that we change our water expenses (and maybe some other variable expenses) to equal distribution based on occupancy. (We have the same issue that people in the largest units are single occupants and there are smaller rental units that have multiple occupants). That requires a change to our CCRs. I was wondering if you could share any more of the language that you have in your document so that I have a starting point to provide to the board.

How come you do not envision that a family of two could use more water than a family of four?

I have never seen a covenant that allowed billing of utilities based on occupancy.

Amendments have to pass a reasonableness test. I doubt a court would rule an amendment like you propose to be lawful.

Is sub-metering a possibility?

Oops-- you'l Get" more replies.

OLD THREAD -

It's best to start new threads for the following reasons:

1) your issue may be lost as others try to respond to the original issue of the thread.

2) Laws change. What may have been good advice 5 years ago can be bad advice today.

On what planet do you live on where garbage collection is a utility?

It is on Planet Ohio. Ditto water.

Our bylaws (yes, bylaws) specifically address including utilities in the items covered by assessments. The section of the bylaws includes a statement noting that doing so may provide an unfair advantage for some members and an unfair advantage for others. This is true.

It is one of the disadvantages of owning a condo, since condo buildings may have a single plumbing system while townhouses often have individual systems. My community has a mix of condos (single system) and townhouses (individual systems). But we have to treat all of them the same - hence water is included in the assessments. We looked into what it would take to separately meter the condo buildings. The cost was prohibitive and we had higher priority spending needs - and if a vote were necessary, it would fail since we've fairly evenly split between condos and townhouses.

That said, it makes no difference as far as garbage collection goes since we're charged a flat rate per unit. Paying for it via assessments actually saves people money since they're paying a group rate rather than an individual rate which is significantly higher. It also saves wear and tear on our streets since it limits collection to one day per week (we have multiple trash collectors serving my area). Win-win.

I answered that in my previous comment, but in case it wasn't obvious: in two different communities where I lived/am living.

The "per pound", though, I'm calling BS on. Do the trash collectors actually weigh the stuff? Unlikely. They may have some proxy for this, though, such as billing by the number of containers - which is exactly how they tried it in my previous home town. Even that was a nightmare to implement - do the trash collectors actually know exactly how many cans should be picked up at each of the homes on their route? Do they skip any extras? Again, it's unlikely. These guys often roll through at 4:30 A-freakin-M when it's pitch black outside - we're lucky they're awake and don't miss us altogether.

And there is another good reason this can't happen: we're billed in advance. We're given one rolling bin for trash and one rolling bin for recyclables, and it's our job to make things fit. What's in the cans is what's picked up. And more to the point, we're billed the same if our bins are crammed full or they contain one small plastic bag and one soup can, or if we put our bins out every week or once a month.

Obviously things can be done differently in different locations, and the Ohio communities I've lived in may have their own unique quirks. But there are physical and monetary constraints on how creative the trash collectors can get, so I doubt that we're all that unusual.

To repeat: yes, trash collection can be a utility, and we pay for it in our assessments. It's cheaper for us that way.

HOA dues being based on #of occupants per unit sounds like a recipe for disaster. Which unit has the most visitors? Which people take the longest showers? Which people boil the most water for their tea bags? Who orders the most junk from Amazon and has the most carboard to recycle? It's impossible to measure all of those things. Our HOAs are based on square footage of the unit. Look to your governing documents to help guide you.

Sort of agree with Aidyl, especially the part how the SF variance can be flawed. In my condo building HOA, larger units pay more than smaller ones based on 3 variables: Building insurance, water and gas (fireplaces; range/oven); water/hot water. The developer's assumptions were that larger units consume more of these than smaller units. We have 30+ different sf sizes. But even the largest units are just 2 bd. + den. And there are no more than 2 underground garage parking spaces per unit. So it's very rare for a Unit to have more than 2 occupants to use that water & gas.

Building insurance might make sense-- I'd say 80% of our units average 1,150 sf. But we do have a dozen 2-story "penthouses" that average 2,500 sf. And several of around 1700-200 sf. So common area exterior bld. surface is pretty huge. In addition, those larger units have a lot more windows than the smaller Units. Window washing contract & equip maintenance, etc. would make more sense as a variable than water or gas.. The difference between my 1,150 sf unit and a 1,250 sf unit is about $5/mo.