Pro Rata Share

[Sidney Hoyle]

Could someone give me the pro rata share calculation for co-op's? I haven't done one in so long I forgot the formula. I know that you have to divide the amount of the underlying mortgage by the number of shares in the building but I don't remember the rest.

Thanks

 

[Mike Boyd]

I've never done a co-op but pro rata means the number of owners. In other words, if there are 20 units, a single owner would own 1/20th of the project and would have to pay 1/20th of the expenses. Maybe there is something in the contract relative to size. One would still own 1/20th of the project but if his apartment was 500 sf and others were 1000 sf, there MAY (but not necessarily) be something to the effect that the contribution to expenses might be less.

 

[VolcanoLvr]

We don't have co-ops out here, but I do know that there is a special report form just for co-ops. That might have info on it that you need.

Otherwise, Mike is correct. The pro-rata share is based on the legal contract for the particular unit's shared ownership in the building.

 

[Lost Cause]

By "pro-rata share", do you mean each coop unit's pro-rata share of the underlying mortgage? That would be the individual coop's percentage of total shares times the underlying mortgage principal.

Pro-rata share in a coop is typically based on the relative number of shares, not the percentage of units or of space in the total project.

 

[VolcanoLvr]

Recently I found a 'white paper' about the differences between Cooperative Apartments & Condominiums co-written by Jonathan Miller of the Miller Samuel Appraisal firm in New York.

This paper discusses financing aspects of co-ops, which may answer your question.

It also discusses value issues relating to the two types of units.

Link: www.millersamuel.com/pdf-tank/1051930559WFulr.pdf

 

[Mike Boyd]

By "pro-rata share", do you mean each coop unit's pro-rata share of the underlying mortgage? That would be the individual coop's percentage of total shares times the underlying mortgage principal.

Pro-rata share in a coop is typically based on the relative number of shares, not the percentage of units or of space in the total project.

You are right, JH. I was equating "ownership" of a unit with the ownership of a share. Shows my like of Co-op experience.

 

[Brian Weaver]

The allocation is something that's provided by management or the developer. You can't arrive at it through a simple formula. You'd need to know each unit's size, relative location in the building, views, floor levels, and all that. A prospectus will show the allocations. I don't know how else to do it.

Each building has its own allocation method and shares vary from building to building.

 

[esturni]

this is how i do it
(mortgage balance / total project shares ) X subject unit shares

 

[esturni]

the mortgage balance of the project financing, not the subject unit