Common Areas
Description
Common areas refer to sections of a property that are shared and utilized by all owners or tenants residing or operating within that property. These spaces are maintained collectively by property management and typically financed through homeowner associations (HOAs), condominium fees, or other forms of communal funding. Common areas ensure accessibility, convenience, and safety for all occupants and play an essential role in enhancing the property’s overall appeal.
Examples
-
Condominium Development:
- Clubhouse
- Swimming pool
- Fitness center
- Shared parking lot
-
Apartment Building:
- Hallways
- Staircases
- Laundry facilities
- Shared courtyards
-
Office Building:
- Elevators
- Lobbies
- Restrooms
- Conference rooms
-
Shopping Center/Mall:
- Walkways and atriums
- Food courts
- Public restrooms
- Parking areas
Frequently Asked Questions (FAQs)
What are common areas?
Common areas are parts of a property that are available for use by all tenants or owners, such as hallways, elevators, lobbies, and recreational facilities.
Who is responsible for maintaining common areas?
The responsibility for maintaining common areas typically falls under the property management company, homeowners association (HOA), or condominium board. They ensure these areas are clean, safe, and functional.
Can I reserve a common area for personal use?
Depends on the property’s rules and regulations. Some properties may allow the reservation of certain common areas (like clubhouses or conference rooms) for private events, often requiring prior booking and sometimes a fee.
Are common areas included in the property tax calculation?
Common areas themselves are usually not taxed separately from the individual units or spaces within the property. Instead, the cost of maintaining these areas is included in HOA or condominium fees paid by the individual property owners or tenants.
What happens if common areas are neglected?
Neglecting common areas can lead to safety hazards, decreased property values, and potentially higher long-term maintenance costs. It can also create dissatisfaction and disputes among property occupants.
- HOA (Homeowners Association): An organization within a subdivision or condominium complex that makes and enforces rules for the property and its residents.
- Property Management: A third-party service that oversees the maintenance and operation of a real estate property.
- Maintenance Fees: Regular charges paid by property owners towards the upkeep and repair of common areas in a community.
- Easement: A right to cross or otherwise use someone else’s land for a specified purpose.
- Amenities: Features that provide comfort, convenience, or pleasure in a property, such as swimming pools, gyms, or parks.
Online Resources
- National Association of Home Builders (NAHB): Website
- Community Associations Institute (CAI): Website
- International Council of Shopping Centers (ICSC): Website
References
- “Property Management Kit For Dummies” by Robert S. Griswold
- “The Book on Managing Rental Properties” by Brandon Turner and Heather Turner
- “Real Estate License Exams For Dummies” by John A. Yoegel
Suggested Books for Further Studies
- “The Property Management Tool Kit” by Mike Butler
- “The Real Estate Investor’s Handbook: The Complete Guide for the Individual Investor” by Steven D. Fisher
- “Landlording on Autopilot” by Mike Butler
Real Estate Basics: Common Areas Fundamentals Quiz
### What is the primary purpose of common areas in real estate?
- [x] To provide shared spaces for all occupants
- [ ] To increase individual property sizes
- [ ] To offer private spaces for select occupants
- [ ] To minimize the number of units
> **Explanation:** Common areas provide shared spaces for all occupants to use, increasing usability, accessibility, and the overall community feel of the property.
### Who usually maintains common areas in a condominium?
- [ ] Individual condominium owners
- [x] Homeowners Association (HOA) or condominium board
- [ ] Local government
- [ ] Independent contractors hired by each resident
> **Explanation:** Homeowners Association (HOA) or condominium board is responsible for maintaining common areas in a condominium, ensuring they are properly managed.
### Can common areas include amenities like gyms and pools?
- [x] Yes
- [ ] No
- [ ] Only under certain conditions
- [ ] It varies from state to state
> **Explanation:** Yes, common areas can include amenities like gyms, pools, and other facilities for the collective use of the property's residents or tenants.
### Are common areas included in personal property tax assessments?
- [ ] Yes, always
- [ ] Only in rental properties
- [x] No, they generally are included in the communal fees and not separately taxed
- [ ] Occasionally, depending on the size of the common area
> **Explanation:** Common areas are generally included in communal fees like HOA dues and are not separately taxed in individual property tax assessments.
### Who has access to common areas in an apartment building?
- [ ] Only residents who pay extra fees
- [ ] Visitors but not residents
- [x] All residents and tenants
- [ ] Only the building manager
> **Explanation:** All residents and tenants typically have access to common areas in an apartment building, promoting community use.
### What can happen if common areas are poorly maintained?
- [ ] Nothing significant
- [x] Decreased property values
- [ ] Reduced tenant/owner satisfaction
- [x] Potential safety hazards
> **Explanation:** Poorly maintained common areas can lead to decreased property values, dissatisfied residents, and potential safety hazards.
### Which organization might you consult for laws on common area maintenance?
- [ ] Internal Revenue Service (IRS)
- [ ] Securities and Exchange Commission (SEC)
- [x] Community Associations Institute (CAI)
- [ ] National Highway Traffic Safety Administration (NHTSA)
> **Explanation:** The Community Associations Institute (CAI) provides valuable information and resources on laws and best practices regarding common area maintenance.
### What type of insurance might cover common areas?
- [x] General liability insurance for the property
- [ ] Health insurance for tenants
- [ ] Vehicle insurance
- [ ] Travel insurance
> **Explanation:** General liability insurance for the property typically covers common areas, protecting against potential liability claims from accidents or injuries occurring in those spaces.
### What term describes fees collected for the upkeep of common areas?
- [x] Maintenance fees
- [ ] Cap rates
- [ ] Closing costs
- [ ] Mortgage insurance premiums
> **Explanation:** Maintenance fees are regularly collected to cover the costs associated with the upkeep and repair of common areas in housing developments.
### Can a tenant or owner determine the rules for using common areas on their own?
- [ ] Yes, absolutely
- [x] No, usage rules are generally established by property management or HOA
- [ ] Only if agreed with neighbors
- [ ] Only after a year of residence
> **Explanation:** No, the usage rules for common areas are typically established by property management companies or the homeowner association (HOA) governing the property, and individual tenants or owners must comply with these rules.
