By Benny L. Kass
Saturday, June 2, 2007
Q: We are under contract to purchase a downtown condominium unit. The seller's real estate agent has said the unit contains 860 square feet. However, when my wife and I measured the apartment, we came up with only 830 square feet.
Is there a formal method of making these measurements? Obviously, we do not want to pay for more than we are actually getting.
A: There is an old saying that when there are two lawyers, there will be three opinions. When you are trying to analyze square footage, you may actually get four or five opinions.
How to measure multifamily condo square footage has become a hotly debated question to which there is no real answer. There are industry standards when measuring single-family houses, offices buildings and rental apartment buildings, even though they are often ignored. However, to the best of my knowledge, there are no such standards for measuring condominium and cooperative apartments.
The American National Standards Institute (ANSI) has published a document titled "Square Footage -- Method for Calculating." It applies to single-family attached and detached houses. For attached properties such as townhouses, ANSI states, "The finished square footage of each level is the sum of the finished areas on that level measured at floor level to the exterior finished surfaces of the outside wall or from the centerlines between houses, where appropriate."
Note the words "exterior" and "centerlines."
In a condominium unit, however, lawyers who prepare documents for developers tell me that they try to get the engineer who is preparing the measurements to follow the unit boundaries as they are spelled out in those documents.
There are two important legal records in a condominium: the declaration and the bylaws. The former creates the condominium and contains basic concepts, including a definition of units, common elements and limited common elements.
Here's an example of a definition of a unit in one D.C. condo's declaration: "Each Condominium Unit includes the horizontal space between the Unit side of the exterior walls of the building and the finished walls separating the Unit from corridors, stairs, and, where applicable, to the surface of the finished walls of those interior walls which separate one Unit from another Unit. Each Condominium Unit also includes the vertical space measured from the (topside) surface of the subflooring to the finished (exposed) surface of the ceiling of such Unit."
Note that this refers only to the inside of the unit, not the exterior or centerline. In my opinion, that is how condominium square footage should be measured.
However, many developers have opted to go the ANSI route -- that is, measuring from the centerline of the walls between the units. If, for example, the outside wall is 12 inches thick, that would add half a foot in one dimension used in calculating the area.
The basic formula for square footage is to multiply a room's length by its width. Thus, a room that is 12 feet by 18 feet contains 216 square feet. However, if you add the six inches to our example for each dimension, you get 231 square feet but no more usable space in your unit.
Why do developers want to increase the square footage? There are two reasons:
First, because too many potential home buyers are hung up on the amount of space they will get, using the centerline approach makes the unit more attractive.
Second, adding space will decrease the stated cost per square foot, which is yet another issue of major concern to many buyers.
One condominium developer's lawyer from the West Coast recently told me that he worries about liability for misrepresenting the unit area and thus violating his state's condominium act. That act -- which is similar to laws in many other states and the District -- requires that the declaration state the approximate area of the unit.
According to this lawyer, "This implies to me that the surveyor should measure according to the boundaries. In a 'walls, floors and ceiling' condo, this rule should mean excluding the thickness of the walls, and excluding limited common elements such as patios, storage areas and garages."
Does this mean the developers are engaged in misrepresentation?
In most cases, I don't think so. There is no standard for measuring condominium units. If the developer -- and the engineer who does the measuring -- decides to use the standard for houses, that is perfectly legal, as long as this method is fully disclosed to potential buyers.
One appraiser told me that in the 1970s, when the condominium market started to heat up here in Washington, most developers used the centerline approach. The appraiser calls this "mid-wall to mid-wall." However, in recent years, this has shifted to what he calls the "paint-to-paint" approach, which more accurately reflects the true usable space in the apartment.
Older condo units will continue to pose the problem you are facing. Sellers obviously want to get the best price for their unit and are reluctant to lower the square footage that has been associated with their unit for years. Real estate agents rely on the printed material and information in the historical legal documents, of which the square footage is often a part. And lenders and their appraisals still favor the earlier, middle-wall-to-middle-wall approach.
However, that appraiser told me that though he will use the stated information when he prepares his report, he will also do his own measurements. If he finds that the estimates submitted by the seller or the real estate agent are different from his measurements, he will note this as a footnote to his appraisal report.
As you can see, this is complex. However, does it really make a difference what the square footage is? Are you happy with the unit? Are you comfortable with the price? Have you made sure that your furniture will fit in the new apartment?
I believe that too much emphasis is being placed on square footage because it is a small aspect of purchasing a condominium unit, either new or resale.
However, I strongly urge the real estate community to press for a uniform standard. There is such a standard for single-family houses and commercial properties. Why are condominiums being ignored?
Benny L. Kass is a Washington lawyer. For a free copy of the booklet "A Guide to Settlement on Your New Home," send a self-addressed, stamped envelope to Benny L. Kass, 1050 17th St. NW, Suite 1100, Washington, D.C. 20036. Readers may also send questions to him at that address or contact him through his Web site, http://www.kmklawyers.com.