Homeownership Share: how to Calculate it?

29 de January de 2022

Gone are the days when decisions in the community of neighbors were made by a show of hands by simple majority. Now, the participation coefficient of each home must be taken into account. Also when calculating the distribution of expenses of any type of reform, assessment or repair in the building or common areas.

We tell you why the participation fee must be taken into account in the community of owners and how to calculate said participation fee.

Contenido

1 What is the homeownership share of a home?
2 What does the participation fee consist of?
3 How to calculate the participation fee
4 What is the participation fee for?
5 The participation fee also for income
6 Where to consult the participation fee
7 The participation fee also in the votes

What is the homeownership share of a home?

The first thing is to be clear about what the participation fee is. This is regulated in the Horizontal Property Law, which in its article 3 establishes that each flat or premises will be “assigned a participation fee in relation to the total value of the property.” That is to say, that the fee is calculated by the value of the home itself, not by its surface area, as many think.

While it is true that the value of a property is usually related to its surface area, this is not always the case. In apartment blocks, the value of each house varies depending on the floor on which it is located.

And it is said participation fee that must be taken into account when calculating what each home has to pay in community charges. That is, in works, installation of elevators, assessments, etc.

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What does the participation fee consist of?

Understanding the concept is easy, the fee is “a part of the whole”, that is, the participation fee of all the homes and premises that are part of the community of neighbors must add up to 100 (100% of the total).

So that you understand it well, if in a community there are 8 neighbors and two premises, the participation fee of each of the neighbors would be around 10%. Although this will vary depending on the value of each of the homes or premises.

It could be, for example, that one of the premises was twice as large as the other and its value was also twice as high. In this case, the premises with the highest value could have a participation fee of 13% and the small one of 7%.

In some communities in which all the homes are the same, many neighbors do not explain the fees or coefficients for each home. Above all, because they tend to have a fairly similar coefficient.

But in the example that I have given you, it is clear that the participation fee serves to make the distribution of expenses and income more fair and equitable.

Imagine that there was a home, for example, that had twice as many square meters as any other, would it be fair for it to pay the same when it comes to covering expenses?

How to calculate the participation fee

The participation fee is calculated taking into account the value of the property with everything that each home includes. That is, it is necessary to add the value of the home itself and also of storage rooms, parking spaces, etc. In the case of a commercial premises, exactly the same thing happens.

And that must be done right at the time of the constitution of the community of neighbors itself. It should be included in the founding document.

What is the participation fee for?

As I have already mentioned, this participation fee is what should be used to distribute the expenses of the community. Both in what refers to the maintenance expenses as what has to do with breakdowns, extra expenses, reforms, etc.

Also what refers to other maintenance expenses such as the cleaning expenses of the building, technical maintenance of electricity or antennas, civil liability insurance, etc.

The participation fee also for income

In the event that the community of neighbors has income and when distributing the benefits, this participation fee of each home must also be taken into account.

If you are wondering how a community of neighbors can have extra income or benefits if it is not a company or sells anything, I will tell you that a community can have extraordinary income.

In the case of renting some common element. Although it is not usual, many communities can have income from renting to a third party some area or common element such as commercial premises, surplus garages or similar. In many cases it happens with the old doorman's house that is currently tending to be rented and hire an external doorman service without assigning the house to said worker.
When subsidies are received. For certain works of remodeling or repair of the building, many communities request some type of public subsidy. The distribution of these when they are received must also be done taking into account the participation fee of the home. It is logical and fair if we take into account that when paying said expenses each home paid according to its fee, so if any money has to be received in return it must also be received according to the participation of each one.
Other income such as rentals of telephone antennas or recurring income for the installation of some type of advertising fence or similar in the building.
There is also usually income in some communities when common elements such as facades or portals are used for the recording of films, television series or any other similar audiovisual content.

Where to consult the participation fee

The participation fee or coefficient appears in the Horizontal Property title. With said coefficient the participation fee will be established.

The participation fee also in the votes

Although I have already mentioned it to you above, it must be clear that the participation fee of each home also applies to the time of voting and decisions to be made.

That is to say, it is necessary to overcome the classic “one neighbor, one vote”, and when deciding the simple majority in a decision, the difference in coefficients and participation fee between one home and another can determine one decision or another.

To give an example, imagine a community with 10 homes in which all have a fee of 10%. But one of them has 10.5% for a higher value and another (with somewhat less value) 9.5%.

Now imagine a vote in which half of them voted Option A and the other half Option B. By unit votes that would mean a tie, but with the participation fee method (which is the one that must be applied) one of the options would have 50.5% and would be the decision that would be taken compared to 49.5%.

I hope it has been clear to you that in your community of neighbors this means of distributing representativeness and expenses in neighborhood meetings should also be applied.