par value

See also Index, percentage interests.

Assigning par values to the units is a condominium-only concept.  Par value is just a number of points assigned to a unit.  Using a par value system can allow for both greater flexibility and simplicity than using the size of the units as the basis for allocation of ownership interests in the common area.  For instance, where the units each have different square footages, the association ends up with different percentages of undivided interests for each owner, which can be a headache, since those percentages are how each unit's voting rights and assessment obligations are determined.  If those units can be broken down to several groups of similar units, each group can be assigned a par value and then the association only has to manage and apply those par values, which may only be three to eight different numbers, for instance, versus a different number for each unit.

Substantially identical units must be assigned the same par value.  Thus, similar units are put into one group, other units that are similar to each other but substantially different from other units are put in another group, and so on.  In the end, there should be a smaller, more manageable number of percentage interests to deal with.

Recommendation: If each unit is allocated a different percentage interest based on unit size, consider whether it would be simpler to use a par value system.  If so, consult with a qualified HOA attorney about amending the declaration to use a par value system.  Be aware the Condo Act does require the approval of at least two-thirds of the ownership interests to alter the percentage interests.

Statutes and Cases:

(For reference: 57-8 is the Condo Act, 57-8a is the Community Association Act, 16-6a is the Nonprofit Act)
HOA resources and laws annotated
HOA resources and laws annotated