Q. I am the newly-elected treasurer of a very small condo complex consisting of 16 free-standing homes. Four of the homes are low-income dwellings (40B) of which the owner has a 7.5 percent beneficial interest. Our expense budget proposed for next year will require an increase of approximately $4,000 to $5,000, to meet our expected actual expenses. What is the formula used to calculate the homeowners’ monthly share based on the ‘percentage interests?’ Can you give an example?
— Getting it Right in Massachusetts
A. “Massachusetts General Laws Chapter 183A, the ‘Condominium Statute,’ is quite specific as to how beneficial interests are calculated,” says Ellen Shapiro, Principal in Goodman, Shapiro & Lombardi, LLC, a law firm that has offices in Massachusetts and Rhode Island.
“First and foremost, they are calculated by the Developer/Declarant at the time the condominium is established. The date the condominium is established is the day the master deed is recorded with the Registry of Deeds. Without that recording, there can be no condominium.
“The statute provides at Section 5(a) that the percentage is determined by ‘the approximate relation that the fair value of the unit on the date of the master deed bears to the then aggregate fair value of all the units …’ In other words, the developer’s best estimate of that unit or those units to the entire condominium complex when completed.
“Identical units may be assigned different percentages because the developer can include in that unit’s value to the entire project items such as the view, type of flooring, etc. The Statute also provides that the developer, in determining the fair value of units, can factor in restrictions relating to value that have been imposed on less than all the units by a covenant, agreement or otherwise. The last sentence is to allow developers to calculate so-called 40B units which are below market rates being sold to individuals with limited income as a condition of granting the Special Permit by the municipality to build the condominium.”