2010 Feb 23rd

Things Don’t Always Measure Up

When is a Square Foot Not a Square Foot?

I’ve had several situations arise lately involving discrepancies in square footage. Typically, when an agent lists a property for sale, the square footage number is taken directly from the tax records. The number in the tax records comes from the master deed for the condominium.  tape-measure

The master deed, which is the document that must be recorded in the state of NJ,  establishes the condominium and is the equivalent of its constitution. Its primary purpose is to divide the land into units and common elements and set out the most important aspects of the condominium, such as voting rights, liability for common expenses, and so forth.  The master deed should include floor plans of each unit and also the square footage of each unit.  The relative size of the units often determines the voting rights and maintenance fee of the unit.  These floor plans typically include the name of the architect who prepared them.

What if the square footage on the floor plans is wrong?

It is possible that mistakes are made.  I’ve seen units where the measurements on the floor plan do not add up to the square footage.  Or where the floor plans do not coincide with each other.  The unit upstairs is, let’s say 1000 square feet.  The unit below it has the exact same footprint except for one room that is shown as 10 feet x 10 feet (100 sq. ft.) on the floor plans.   The downstairs unit is listed in the master deed as only 750 sq. ft.  So where did the missing 150 square feet go?

The discrepancy becomes a problem when the owner of the “too small” unit wants to sell.  “My unit’s not only 750 square feet, it’s really 900,” says the seller.  Of course, having the property listed as smaller than it really is makes the price per square foot seem too high. Like it or not, buyers do evaluate and compare properties based on price per square foot.  So why didn’t the seller fix the mistake sooner?  Well, for one thing, if your unit is mistakenly listed as smaller than it really is, the seller may have been paying less maintenance than he really should have for all those years.

I often have sellers tell me “I measured my property and it comes to 1500 square feet” even though it’s in the tax records at 1300 and the condo docs say it’s 1300 and the prior MLS listings had it as 1300.  In this case, the owner has to realize that measuring is a bit of an art.  Whether you count utility closets (which are not living space), the thickness of interior walls, even exterior features like balconies are often points of disagreement among owners, realtors, and appraisers.  I asked the NJ Real Estate Commission if they have any guidelines about how to measure square footage but they do not.  They told me to call the NJ Board of Appraisers, who referred me to the USPAP which are the uniform standards of professional appraisal practice.  Even USPAP does not specify the method by which measurement must be done.

The Bottom Line

If a home owner thinks his condo docs are wrong, he would probably have to hire an attorney and seek to have the documents corrected.  Changes to the master deed might require action by the condo board and possibly a majority vote of the unit owners.  The amended deed would have to be re-filed with the state.  Overall, it’s likely to be a costly process.  So what should you, the potential buyer do?  First of all, know the source of the square footage numbers. Did the listing agent get it from the tax records?  The condo docs?  Do they agree?  Or was it just made up or ‘measured’ by the sellers.  If there is a discrepancy, don’t just take the agent or seller’s explanation at face value.  Have your attorney look into the issue during attorney review.  If there is a mistake, you probably want to have it corrected.  If there isn’t, you don’t want to overpay for a seller’s overestimation of the size of the property.

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  1. Craig

    If people are wondering why condos and specific rooms within them seem smaller than their stated square footage, keep in mind that hallways and closets are included in the calculations – and doing so is proper practice. Also, if your furnace, washer/dryer, and hot water heater are in closets within the living area (typical in condos), those spaces are properly included as well. What should not be included are balconies, parking spots, and outdoor spaces. Their square footage should be listed separately as they are not finished living areas. Some people will improperly include a balcony in the unit’s total area, so be especially wary of that. If you want the most bang for your square footage buck, avoid units with hallways, as they cause you to pay for non-usable square footage.

    Lastly, don’t assume a difference of a hundred sq. ft. here or there is a marginal difference. It isn’t. Compare a range of units of differing sizes to get perspective of what you’ll be happy with, even if the bigger units are outside your price range. When I first started my condo search I thought I could comfortably live in 1000 to 1100 sq. ft. – until I saw what 1300 sq. ft. was like in comparison. There was no going back, so I held out until I could afford the space I wanted.

  2. Sally

    Very timely topic indeed. The tax records and master deed for my condo are in agreement with each other. However, when the buyers’ appraiser measured, he came up with a 10% smaller sq footage for the unit in question. This could potentially affect buyers’ ability to qualify for their mortgage. This same issue did not arise when I purchased the unit years ago. I was told not to be concerned about it…wonder what other people’s experience is with this.

  3. rich

    If I recall when I had condo docs drawn up for a building that I was planning to convert I think the architect calculations measured from the mid-line of the apartments exterior walls.

    Assuming for a minute the walls are 6″ thick an ‘extra’ 3″ are being counted for the unit. On a 20’x60′ unit you have a approx 160 linear feet of exterior walls. 3″/12″x160 feet is 40 Square feet..

    Square footage is certainly and art as much as a science. A 40 square feet difference depending on measurement method is interesting but nothing compared to units I have seen where it looks like the pulled the number out of their a**.

    In the end, I had three units with the same footprint so for maintenance fees it didn’t really matter how the architect measured but I think for newer construction when the condo docs are done from the plans the mid-line method is popular.

  4. Andy

    I’ve seen condos listed w/ the incorrect Sq Ft by realtors as compared to the tax records. Ie one listed at 1000sq ft is really 850 when you look at the tax records. My own unit is lited on the low end on our tax record but when my uncle who is an architect measured our unit before we purchased it was actually closer to 950-1000 sq ft instead of what was listed on the tax records.

  5. Andy

    Btw, how does one go about getting the plans of their condo from the city? I’m looking to re-do my kitchen this year but I have no idea how to go about getting the plans for my unit. I checked the city website but didn’t see any place to request them.

  6. Craig

    Andy, to get a copy of your floor plans go to city hall and obtain a copy of your building’s master deed. The plans should be part of that document. This info won’t be available on the web. You’ll have to obtain it in person.

  7. bill

    or ask the condo president…he should have the master deed.

    Or ask your lawyer…you should have received at closing

  8. Lori

    I don’t believe the master deeds are on file with City Hall – they are recorded either in the county clerk’s office in Newark or possibly in the state AG office in Trenton. Much easier is to contact the lawyer who did your closing as you should have received the master deed as part of your closing docs. Or ask your management company if your building is professionally managed. If it’s not, one of your board members or neighbors might have a copy. You will need it if and when you go to sell. If you are planning on redoing your kitchen, however, the City of Hoboken will require you to hire an architect and do plans of your proposed renovations which must be approved by the building department in order for you to get permits. If you don’t do that, they can make you rip everything out. They have inspectors who walk the streets looking for discarded building materials.

  9. Dane

    I have a question that’s the opposite of what people are talking about…what if I bought new construction where the master deed says its 1400 sq feet but every time I measure it its closer to 1100-1150 sq feet. I had a concern about this when I bought the place but my attorney said to trust the master deed and I love the place otherwise. I realize there is no specific way of measuing a place and I could explain if the unit was 50 sq feet off or so. However, it measuing at about 200 sq feet off. Do I have any recourse if I can “prove” that the master deed is way off?

  10. Andy

    Thanks everyone! I’ll check my closing docs. I got so many pieces of paper that day it might very well be in there.

  11. Lori

    Dane – Can you get a copy of your appraisal from your lender? That’s where I would start. You have recourse if there was fraud or misrepresentation involved in your sale. Sounds like your lawyer didn’t give you very good advice.

  12. Dane

    Lori, the problem is that everyone just uses the master deed. I had an original appriasal when I first bought and another appraisal when I re-financed. Both times they just used the master deed for the sq. footage. When I re-financed the appraiser did the measurement (which came in at what I think it is), then looked at the master deed and said he’d just have to trust the master deed.

    Is this common for everyone to just “trust” the master deed and what can you do if the master deed is wrong?

  13. Candice

    I spoke to the city assessor about getting my condo’s SF changed and he said since there are similar units in my building, I would need to get an architect in to change plan for the entire building. But that requires buy-in from everyone in the building and we would need to change the master deed. Also, changing it means the taxes may go up or down so keep that in mind!

    The assessor also mentioned that the SF is measured mid-wall to mid-wall. So if the wall is 1 foot thick, you can add that foot into your measurements (6 inch for both sides).

  14. JC

    question for anybody; I bought a new constuction last year and the sq footage was wrong/overstated. I corrected the sq footage with the county clerk but will this have any impact on my taxes? Or, since this is a new construction my purchase price is the only factor when deciding taxes? Purchase price x 1.3%???

    thanks

  15. Tiger

    Yes, measuring is an art.

    I don’t see though how closet space could be considered part of living space? LOL, no that’s very, umm, creative.

    BTW I have loft spaces on top of my kitchen and bathroom, does this mean I can add 100 sq ft or so to my floor plan when I sell???

    yay! :-)

  16. Craig

    Tiger – closet space (including furnace/laundry/water heater utility closets) is indeed considered part of living space and is included in sq. ft. measurements. The area occupied by your interior walls is included in the measurements as well – usually measured mid-wall on each side as noted above. Interior walls take up a surprising amount of the stated sq. footage. Architects include these spaces in their measurements, but appraisers do not – that’s why appraisers often come up with different numbers than the master deed. My master deed has my unit’s sq. footage at exactly 1301 and the tax records state that as well. However the bank appraiser came in at a little less than 1200 for the aforementioned reason (I bet he didn’t include the extra floor space in my two bay window areas either).

    Whether loft space can be included depends on whether it meets the definition of living space. Usually the definition is that the space must be conventionally heated, finished with interior quality materials, accessable via other connected living space in the domicile, have walls, a floor, and a ceiling height of at least 7 feet.

  17. whynot

    i think you call tell just from looking

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