Percentage Interest
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PERCENTAGE INTEREST

When a condominium development is built, each unit is assigned an undivided percentage interest in the common area. Developers can use a variety of formulas for assigning that ownership interest, but the most common is to (i) give all units the same percentage or (ii) assign ownership based on the square footage of the unit.

Condominium Defined. By itself, the assignment of a unit's percentage ownership interest in the common areas is irrelevant. It simply satisfies the requirements for creating a condominium development--a separate interest in a unit coupled with an undivided interest in the common areas. (Civil Code § 4125)

No Partition. The assignment to a unit of a percentage interest in the common areas cannot be separated or partitioned from a unit except as provided for in Civil Code § 4610. They are permanently bundled together. The owner of a unit cannot separately sell his percentage interest in the common areas.  

Assessment Allocation. However, developers can, and often do, link the percentage interest in the common areas to a unit's assessments — the higher their percentage interest, the higher their assessment obligation. Most often, a unit's percentage interest in the common areas has no impact on the homeowner's voting rights; all units, regardless of size, have the same vote of one per issue. On rare occasions, the governing documents will assign voting rights based on the unit owner's percentage interest in the common areas. This can make for complicated elections since all voting is by secret ballot.

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Adams Stirling PLC