What Is Common Area Electricity & Who Pays for It?

Common area electricity refers to the power consumed in shared spaces within multi-unit properties. This electricity is essential for the general operation and accessibility of the property, contributing to the overall functionality and safety for all occupants. Its purpose is to support the infrastructure that serves the entire building or complex, ensuring shared facilities are properly lit, climate-controlled, and operational. Understanding common area electricity directly impacts property management and associated costs.

Spaces Covered by Common Area Electricity

Common area electricity powers a diverse range of shared spaces and amenities. In residential settings, such as apartment buildings or condominiums, this includes lighting for hallways, stairwells, and lobbies, as well as power for elevators, laundry rooms, and fitness centers. Outdoor areas like parking lots, walkways, and recreational spaces like pools or clubhouses also rely on common area electricity for their lighting and operational needs.

For commercial complexes, common area electricity extends to shared facilities such as restrooms, building security systems, and exterior signage. It also covers power for mechanical systems that serve the entire building, including heating, ventilation, and air conditioning (HVAC) for shared zones, and often includes lighting for loading and unloading areas. These applications underscore the necessity of common area electricity for the daily function and user experience of multi-unit properties.

Metering Common Area Electricity

Measuring common area electricity consumption involves dedicated metering systems. In many multi-unit properties, separate meters are installed specifically for common areas, distinct from the meters for individual units. This allows for precise measurement of electricity used in shared facilities like lobbies, hallways, and amenity spaces.

In some larger developments, a “master meter” might measure the total electricity consumption for an entire building, encompassing both common areas and individual units. When a master meter is in place, sub-metering systems are implemented. Sub-meters are installed behind the master meter to measure the electricity usage of individual units and can also be used to track common area consumption separately. This method allows for a detailed breakdown of electricity use, ensuring that common area costs are accurately identified.

How Common Area Electricity is Paid

The financial responsibility for common area electricity is integrated into the cost structure of multi-unit properties, with various mechanisms for payment. For residential properties like apartment complexes or condominiums, these costs are covered through monthly rent or homeowner association (HOA) fees. HOA fees often include utility payments for common areas such as lighting, heating, and air conditioning, and are determined by the HOA board to cover the community’s shared expenses. These fees contribute to the upkeep and functionality of shared spaces.

In commercial properties, common area electricity costs are part of Common Area Maintenance (CAM) charges, which tenants pay in addition to their base rent. CAM charges are designed to cover the expenses of maintaining and managing shared spaces and are allocated among tenants based on their proportionate share of the total leasable area. This proportional share is often calculated based on the tenant’s rented square footage compared to the property’s total rentable square footage. Landlords may estimate these costs annually and bill tenants monthly, with a reconciliation or “true-up” at the end of the year to adjust for actual expenses. Lease agreements in commercial settings explicitly outline how these costs are passed on, sometimes as a direct bill from the landlord, or as a flat fee, or even included within the stated rent.

Common Area Electricity vs. Private Unit Electricity

Common area electricity differs from electricity consumed in individual residential or commercial units. Private unit electricity powers the living or working space of a tenant or owner, including appliances, personal lighting, and climate control within that unit. This usage is measured by a separate, individual meter for that unit.

The occupant is responsible for setting up an account directly with the utility company and paying for their individual unit’s electricity consumption. In contrast, common area electricity covers shared amenities and spaces, and its cost is generally managed by the property owner or management, then distributed among all occupants through rent, HOA fees, or CAM charges, rather than direct individual utility bills. This distinction ensures that occupants pay for their own direct usage while contributing equitably to the maintenance and operation of shared facilities.