Here I will offer a theory of how best to determine and justify the monthly annual fees for owners of condominiums in a new complex. Everyone who has responded to my immediately preceding post has mentioned “fairness.” But what is that?
The reason I posed that specific question (about the hypothetical condominium complex) in my immediately preceding blog post is because it is a case study in what fairness means. I think it points to other scenarios, including how taxes should be decided on.
Imagine the condominium owners gathered in a room. All are present. (This is a thought experiment, so just go with it 🙂 The moderator of the meeting tells them to forget the size of their condos. That is, each owner must wipe his or her memory clean with regard to his/her condo’s size. Then, the moderator describes three scenarios for determining monthly fees.
Remember, a third of the condos are 1500 square feet, a third are 1000 square feet, and a third are 500 square feet.
Scenario one is a flat fee for all condos regardless of size.
Scenario two is a fee based on size (square footage).
Scenario three is a mixed fee based partially on size (square footage) and partially on the cost of maintaining amenities (club house and all its amenities), swimming pool, tennis court, common areas).
In each case, it is made clear that all major, unplanned, unexpected expenses will be paid for by common special assessments—including replacement of roofs which will be done all at the same time when necessary.
Then the moderator asks the ignorant owners, all of them in this case, to vote.
The ethical question is what would the majority vote for?
Remember, they do not know the size of their condos. That makes this a thought experiment. So what use is it? Well, in real life, the moderator could tell the owners to do their best to forget what size their condos are. Or, builder (original owner) could stipulate in the sales agreement that each buyer-owner must appoint a stand-in who does not know the size of the owner’s condo to attend the meeting and vote. But, there really is no perfect way to make sure the “veil of ignorance” is lowered. So, perhaps the right, the rational result of the thought experiment, what owners SHOULD have decided, is the only possibly practical use of it. In other words, in a later vote of owners to change the fee schedule, someone could argue that “That is not how you WOULD HAVE voted if you actually did NOT know….”
What the majority of owners (or their stand-ins) would decide under this “veil of ignorance” is the right, the just, the ethical decision.
So what would the majority or even possibly all the owners decide assuming they are all reasonably self-interested and “good” people (as opposed to sociopaths)?
What do you think?
*Note: If you choose to comment, make sure your comment is relatively brief (no more than 100 words), on topic, addressed to me, civil and respectful (not hostile or argumentative), and devoid of pictures or links.*
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