Shared Common Element Expenses

I live in a condo development that consist of 2 seperate associations. Currently there are a total of 3 buildings with a fourth building under construction. HOA 1 is made of 2 buildings with 52 units. HOA 2 will have 2 buildings (70 units) (the other building is being constructed soon) The one that is built has 40 units.

What is the best way to split the shared common elements? Should it be based on the number of units per association, or should the par value of each unit someone how be a factor? To make matters worse, both HOAs have 2 seperate mgt companies and are not agreeing on how the shared exenses are to be split. What is your take on this?

well currently both associations split the following; electric, water and trash pick-up. We have seperate landscaping and cleaning contracts (with the same company of course)

I guess my question is, when splitting the water and electric bill, should it be done based on the number of units per association or should it be done based on the percentage interest of each unit?

Well if there is one master meter for the whole community for each item, then you would need to divide the total amount by the number of units to find out the amount each building must contribute. If each building has its own individual meters then each HOA would determine the assessment for these items. How is it being handled now? This sounds like a real Charlie Foxtrot situation.

Here is the break down. HOA 1 is resident controlled. HOA 2 (which is here I am and serve as the building captain) is still under developer control until the last building has been completed. Up until October of last year both HOAs had the same mgt. company. HOA 1 decided to get a new mgt company and then that is where things started to go down hill. When our mgt company managed both buildings, they used a simple formula to split the shared common element bills as follows:

HOA 1 has a total of 52 units
HOA 2 has a total of 40 units

That equals 92 units in total

HOA 1 pays 57% of shared common element bills (52/92= 57%)
HOA 2 pays 43% of shared common element bills (40/92= 43%)

HOA 1 new mgt company is using the percentage of interest to calculate the shred common element bills. The developer and the Mgt company for HOA 2 does not agree with this.

For example: There are 2 sets of dumpsters (a total of 4 dumpsters) in our development. HOA 1 was getting the bill and HOA 2 would cut a check for our portion of usage. We only use 1 set of the dumpsters (1 regular dumpster and 1 recycle dumpster) so we were paying 43 percent of the cost of using 1 set of dumpsters. HOA 1's mgt company is trying to make us pay half of the bill as if we were using all 4 dumpsters. (I hope this making sense)

There is only 1 master meter and it is on the side of HOA 1. They would get the bill every quarter and then it would be split using the same formula plus the number units etc. The electric was done the same way.

AS you can read this is a complete mess. The developer is working with our Mgt company to deal with HOA 1's mgt company. I am not sure if it says in our CC&Rs how the shared common element expenses should be divided. I will look through them and also ask the developer. but it appears that there may be nothing in our documents covering this because I assume that the Developer would have brought that up by now.

I think the only person benefiting from the situation should be sued to rectify the problem. The builder shouldn't have been allowed to start this situation. Then again, I think shared metering only benefits the builder as it saves him/her cost of putting in more meters and the space it takes to house them.

On the flip side of the coin when you have that many units sharing a bill there is little incentive to conserve resources. Because one person can not significantly affect their bill, conservation does not take place as much as it otherwise would. For these reasons I think shared metering of a condo should be baned outright for new buildings. I would never buy into that kind of situation myself.

I would point out that your HOA may not have much power over the situation. In fact, as I see it, there would be little to prevent HOA 1 from charging a service fee for having to take care of your water bill. Your builder should be held responsible for the situation and forced to put in additional meters before you end up in a worse situation. I will say that I think that if the issue came up where HOA 1 turned off your water altogether I would only be inclined to stop them long enough for a meter to be installed to HOA 2 (at HOA 2's expense).