What Does Undivided Ownership Interest Mean?

joyfuldesigns_300pxProbably one of the most distinct features of condominium ownership lies in the concept of “undivided ownership interest” of the common elements.  All unit owners as members of the condominium’s association share ownership of the common elements.

First, we would need to understand what the common elements are.  Each condominium unit has a set of boundaries.  The boundaries can vary from condominium to condominium.  The unit owners individually own what is within the unit boundaries.  In simplest terms, it may be anything within the condominium unit from the walls in, from the basement floor to the highest ceiling.

Everything else that comprises the condominium is either a common element or a limited common element and is owned by the association.  This includes everything within the property boundaries of the condominium project itself and can include the grounds, trees, ponds, roads, sidewalks, flowers, exterior lights, parking spaces and the exterior of the buildings.

Limited common elements are common elements that designated for use by one or fewer than all of the unit owners.  Examples of limited common elements include front steps to a unit, the deck of a unit and the mechanical features that service a unit, such as water pipes and electrical wiring.  Even though limited common elements are for the sole use of the unit owner, they are actually owned by the association.

The distinction between the two is important because it determines who is responsible for the maintenance and insurance of the elements or components.  If a component falls within the unit boundaries and is not a limited common element, the unit owner is responsible for insuring and/or fixing the component if it breaks.

Everything outside of the boundaries of the units is owned by the association and the insurance and expenses of these elements are borne by the association, not the unit owners individually.

Every unit owner has an “undivided ownership interest” in the common elements and limited common elements.  The percentage of ownership is detailed in the declaration and is typically determined by the square footage of the unit as a proportion of the total square footage of all the units.  Normally, the larger the unit, the higher the percentage of ownership interest will be.

The unit owners share the expenses of the association at a rate that is proportionate to their percentage of ownership interest.  This typically determines how much each unit owner will pay in monthly common charges or their portion of any special assessments.

“Undivided” means that the ownership interest in the common elements cannot be subdivided to each unit owner.  A unit owner, for example, cannot claim that a certain tree is his because he owns 1.2% of the common elements so he wants the tree.  This also means that if a deck is a limited common element of Unit 5B, other unit owners are not allowed use of the deck because they technically own a portion of it.

It does mean, however, that if Unit 5B’s deck is destroyed by a fallen branch, the association (and therefore all unit owners collectively) are responsible to pay for repairing the deck.  All unit owners as members of the association are financially responsible for the maintenance and insurance of all common elements and limited common elements.

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