Condo-Smart

What’s the formula for figuring out what I need to pay each month?

In Alberta  each corporation has a total of 10,000 unit factors.  And what is a unit factor?  Well, think of them as shares in the corporation.  Because all condominium corporations operate as non-profit organizations, they really don’t have shares in the true sense of the word.  There are no dividends issued etc.  But as a unit owner, you will own a “share” of the condominium corporation. So to avoid confusion in condominiums the number of “shares” of the corporation owned by unit owner is called the unit factor. (think of factor as a fraction of 10,000)

On the registration of the corporation (or subsequent division of the units as is the case of phased development) each unit is assigned a number of unit factors as a portion of 10,000.

So let’s take a unit in a high rise apartment.  The unit has been assigned 146 unit factors.  This means the unit owns 146/10,000 of the corporation.  And because the corporation owns the common property and the unit owners own the corporation, by default, the unit  is responsible for 146/10,000 of the overall amount needed by the unit owners to maintain the common property.

So, for example,  if the annual amount needed by the unit owners to maintain the common property  is $225,000 and the unit owns 146 of the factors – then to calculate the amount owned by the unit owners one needs to know first what the cost is to each unit factor.  To arrive at that – just divide the annual budget by the total number of unit factors (10,000).  In this case, each unit factor owes $22.50 per year.  To find out what the unit owning 146 unit factors owes, multiply $22.50 by 146 or $3285 annually.  Now, divide by 12 and you get the amount owed monthly or $273.75

(budget/10,000)x total unit factors owned by the unit = annual contribution needed.  Now divide by 12 and you have the monthly amount.