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Linda Palfi
CNC Properties
47033 Creekside, Calgary, Alberta
P: 403-998-7732
F: 403-592-8002
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What the heck is condominium "unit factor"?

 

The expenses to provide common services in every condominium development must be allocated among the owners. To accomplish this the law creates "unit factor", which is simply the basis for allocation, by percentage, taken to two decimal places; in other words a whole number over 10,000. It's likely that those who wrote the Alberta Condominium Property Act felt that decimal points could be misplaced or otherwise cause confusion. But there's nothing more to condo unit factor than percentage with two zeros added and the decimal removed.

 

In most residential condominium projects the unit factors have been allocated in the Condo Plan on a suite-size basis. Here's a simple example: let's say your condo building has 20 suites of equal size. Each owner must thus carry 5% of the collective costs for maintenance, heating and common-area janitorial services (20 X 5% = 100%). Add two zeros to the percent numbers and you have 500/10,000, which is how expenses will be apportioned among all the owners. This system creates fairness in cost distribution, of course, when condo projects have varying sizes of suites, townhouses or villa homes.

 

As you might expect, though, there are exceptions to the above. First, the Condominium Property Act does not require that suite floor areas be the basis for allocating condominium plan unit factors. And while the Act requires condominium plans to state, "…the basis for determining the unit factor," that rule only came into effect in 2001, so earlier condo plans don't carry such a statement. Sometimes the condo plan statement is simply that, "Unit factors are allocated according to market value at the time of initial sale", which isn't very helpful. Yet a bit of analysis usually shows that unit factors are, in fact, in rough proportion to suite sizes.

 

In many cases condo plans also show titled units of property other than suites, like parking stalls and storage lockers, that are all assigned smaller unit factors. In my home building, for example, titled parking stalls have a UF of 3 each, titled storage lockers have a UF of one each, and the balance of the 10,000 unit factors are divided among the suites in proportion to their sizes. That sounds fair.

 

There are also many condo plans for townhouse and bare-land condo subdivisions in which every property is assigned the same unit factor, regardless of its size. That makes sense when the larger properties do not cost the condo corporation more to maintain than the others.

 

Lastly, there are rare instances in which the condo plan unit factors were not fair, and the current Alberta Condo Property Act allows condo corporations with this situation to adopt a schedule apart from the unit factor table to allocate expenses among owners. That's so uncommon, though, that only a few condo-specialist Realtors and condominium consultants will care and know to watch for it.

 

In every case, however, the condominium unit factors represent each owner's share of ownership of the condo common property. So if a condo development were to be badly damaged by fire or, say, an earthquake, and owners chose to take the insurance cash and go their separate ways rather than rebuild, the money would be distributed in accordance with the unit factors, which is the percentage of ownership of the common property.

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