Unit Factor Allocation & Mixed Operating Costs

Question:

We are working with a developer to prepare preliminary budgets. One condominium plan; 94 townhouse units; 92 coach home units. The townhouse unit owners pay all utilities, except common area lighting (parking lot). The coach homes are 8 to 12 units per building with common heating. Surface parking is common to both types, as is grounds maintenance.
We have two budgets; one each for the two styles of buildings.

The question posed to us is how to weight the utilities components when the surveyor calculates the unit factors.

Have you encountered something similar? And, can you share any information?

Thanks for your help.

L. H. Property Administrator

Answer:

Here are two suggestions on how to handle this difference in the utility usage.

1. calculate the unit factors by using the total expense budget for the separate types of units instead of using the area.

i.e. determine the cost per unit per building type (total budget for townhomes / number of townhouses/12) and do the same for the coach homes. This number becomes the unit factor for the different types. Using this method the unit factors are the same for each unit in the townhouses or coach homes so this only works when the units are comparable in the amount of utilities each would use.

or

2. Use the approximate area as the basis for the unit factor allocation. To deal with the inequity in condominium fees put a formula in the bylaws stating how the operating costs will be allocated. (i.e. based on separate budgets for the different types of buildings)

The proposed bylaws will require this wording or a bylaw amendment would be required.