Q&A: Bilked by Bulk Billing

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Q. The bylaws of [my co-op] currently charge utility costs—water, sewer, heat/AC, and electricity—to our shareholders on the basis of the number of shares each unit is assigned. The shares apportioned are variable depending on unit size, location, etc.

A year or so ago we negotiated a building-wide cable and internet deal with a provider that is based on the number of units in the building, 240. When individual units are charged, it is on the basis of shares, which results in the per-unit cost varying widely. The board considered proposing a change to the bylaws to permit charges such as these to be done simply on a per-unit basis versus a share basis. As you can imagine, those that were paying less were opposed; those paying more were for.

My question is: Is there a standard practice in NY for charges such as internet and/or cable? Clearly when the original bylaws were developed 50-plus years ago, internet and cable did not exist.

                   —Looking for an Even Split

A. “It is not uncommon for co-ops and condominiums to have a ‘split’ billing system for services like cable TV and internet,” says Aaron Shmulewitz, partner at Belkin Burden Goldman, LLP, in New York City. “Many buildings enter into a ‘bulk billing agreement’ with a provider, in which the building pays a flat monthly bulk amount for basic service with a minimum number of apartments guaranteed, with premium services billed to each apartment owner separately, depending on the level of premium service (s)he desires. In doing so: (i) the flat monthly bulk amount is included in the building’s operating expenses, which are spread among the apartment owners on a per share basis (or common interest percentage basis in condos), so that larger apartments will generally pay more than smaller ones, and (ii) each apartment owner pays for his/her own premium service separately, directly to the service provider.”

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