Allocation of Common Expenses – What is fair?

April 2018

There is more than one way to allocate common expenses among condo owners.

One misconception is that common expenses are only for necessary expenses.  Another is that common expenses must be allocated in proportion to suite size.

Common expenses relate to the performance and duties of the condo corporation as specified in the Condo Act or declaration.  These expenses cannot generally be defined within condo rules or bylaws of the corporation.  They are described as “common” because they are part of a shared responsibility among suite owners.

Allocations of these common expenses, according to the Condo Act, are “in the proportions specified in the declaration.”  The Condo Act has additional stipulations that prevent condo owners from avoiding to pay their share of these expenses.

While it may be a requirement that condo owners as a group pay 100% of common expenses and that every owner be allocated a share of these expenses, there do not appear to be additional constraints on the allocation.

Perhaps out of convenience, common expenses are generally allocated according to suite size.  Superficially, this makes some sense in that larger suites generally consume more utilities, have more pipes and vents, and can require greater maintenance.  This, along with challenges in modifying a declaration, may explain why suite size is often used to determine common expense allocations.

This approach eliminates other considerations relevant to a fair allocation of common expenses which should factor in the following considerations:

  • Parking spaces when not accounted for in common expense allocations
  • Lockers when not accounted for in common expense allocations
  • Number of residents in a suite which impact on utility use and overall use of common areas and amenities
  • Pets which impact on utility use, maintenance and overall use of common areas
  • Rental properties which can utilize a greater proportion of shared utility expenses and be a potential cause of damage for which they may not be responsible for repair

The simpler approach of only considering suite size in common expense allocations fails to allocate common expenses in as fair a manner as possible based on consumption or use.  It results in owners of larger suites paying for higher expenses resulting from larger families, pets and renters who may be less concerned with longer term sustainability of the condo corporation.