How are expenses paid in a tenancy in common?
Building expenses are divided into “individual expenses” and “group expenses”. Individual expenses include maintenance and improvements to unit interiors, personal property insurance, and separately metered utilities; they are paid directly by the individual owners. Group expenses include mortgage payments (when there is a group loan), building insurance, property taxes, maintenance and improvements to common areas, and shared utilities like water and trash removal; they are paid through a group bank account using a monthly assessment system. Under this system, each owner makes a single monthly payment to the group account. The monthly payment is based upon the total of the owner’s share of each of the anticipated group expenses. To add predictability and protect against default, even semi-annual and annual expenses, like property taxes and insurance, should be included in the owners’ monthly payments.
