What are Common Area Assessments?
Common area assessments are fees payable by members of Homeowners Associations and Condominium Associations for the maintenance of the common areas available for their use.
Examples of common areas include – parking lots, stairways, electricity, and recreational areas, amongst others. Essentially, the use of the common areas is such that no person or group of persons to exercise control over the areas to the exclusion of others.
Usually, Homeowners Associations and Condominium Associations prepare estimated budget expenses for the maintenance of the common areas. The expenses will thereafter, be spread amongst the members. So, imagine a homeowner association with ten homeowners that must maintain its recreational areas frequently. Assuming that the cost of annual maintenance is set at $10,000, each of the homeowners might be obliged to pay $1000.
It is not unusual for the associations to establish a reserve fund to save unspent expenses and offset future obligations from the said fund.
By contributing the individual or allotted common area assessments, members ensure that recreational parks and other common areas within the community or neighborhood are well preserved.