Analyzing square footage

DEAR ALLISON: In December 2007, I took title to a condominium in Silverthorne, CO unit that was listed on the MLS as being 1,017 square feet, according to the public records. Recently, I was going through a real estate handbook that I own, and it suggested that I have a copy of the appraisal in my files. Since I didn't have one, I requested a copy from my bank. I was shocked to find that the bank found the square footage to be 864 square feet, not 1,017.

Before I took title, my real estate agent met the appraiser at the condo unit and said that I didn't have to be there. The day after the appraisal, I called my real estate agent to ask if everything went OK and she said yes.

Did my real estate agent have legal responsibility to point out the discrepancy? And can title insurance help me claim anything financially at this point? Do you have any other suggestions on what I should do?

Answer: There is an old expression that when there are two lawyers, there will be three opinions. In real estate, when you are trying to analyze square footage, you may actually get four or five opinions!

Measuring square footage has become a hotly debated topic to which there is no definitive answer. Although there are industry standards when measuring single-family houses and office and apartment buildings (which are often ignored anyway), to the best of my knowledge there are no such industry standards for measuring condominium and cooperative apartments.

The American National Standards Institute (ANSI) has published a document entitled "Square Footage -- Method for Calculating" (ANSI Z765-2003). However, it applies only to single-family houses. For attached properties (such as townhomes, which we used to call "row houses"), ANSI states that "the finished square footage of each level is the sum of the finished areas on that level measured at floor level to the exterior finished surfaces of the outside wall or from the centerlines between houses, where appropriate."

Note the words "exterior" and "centerlines."

In a condominium unit, however, developer attorneys who prepare the legal documents tell me that they try to get the engineer who is preparing the measurements to follow the unit boundaries as are spelled out in those documents.

In a condominium, there are two important legal records: the declaration and the bylaws.

The former creates the condominium and contains basic concepts, including a definition of units, common elements and limited common elements.

Here's an example of a definition of a unit from a local District of Columbia declaration:

"Each Condominium Unit includes the horizontal space between the Unit side of the exterior walls of the building and the finished walls separating the Unit from corridors, stairs, and, where applicable, to the surface of the finished walls of those interior walls which separate one Unit from another Unit. Each Condominium Unit also includes the vertical space measured from the (topside) surface of the subflooring to the finished (exposed) surface of the ceiling of such Unit."

Note that this refers only to the inside of the unit. In my opinion, that is how condominium square footage should be measured.

However, many developers have opted to go the ANSI route -- namely measuring from the centerline of the walls between the units. If, for example, the outside wall is 12 inches thick, that would add at least half a foot more to the overall area.

One calculates square footage by multiplying a room's length by its width. Thus, a room that is 12 feet by 18 feet will contain 216 square feet. However, if you add the 6 inches to our example, you get a little more than 231 square feet -- but no more usable (livable) space in your unit.

Why do developers want to increase the square footage? There are two reasons:

First, too many potential homebuyers are literally "hung up" on the amount of space they will get; using the "centerline" approach clearly makes the unit more attractive.

Second, adding more space will decrease the cost "per square foot," which is yet another issue of major concern to a number of consumers. In our example, if the unit price is $400,000, 830 square feet equates to $481.93 per square foot, whereas the centerline approach brings this number down to $465.11 a foot ($400,000 ÷ 860).

So to answer your questions: No, title insurance will not assist you. Square footage is not a title issue. As for the real estate agent, if she learned of the discrepancy before you took title and did not tell you about this, she may have breached her duty to you. But, as discussed above, it may very well be that both numbers are correct -- depending on which formula you use. Copyright 2009 Inman News, Benny Kass

For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected]. Allison is a long time local in Summit County. Summit Real Estate – The Simson/Nenninger Team is located at the Dillon Ridge Marketplace. Allison’s long-time residency and years of real estate experience can help you make the most of any buying or selling situation. She’s a Certified Residential Specialist (CRS), the highest designation awarded to a Realtor in the residential sales field.  Her philosophy is simple, whether buying or selling, she understands that the most important real estate transaction is yours.  Want to know the value of your Summit County property? Visit www.SummitHomeValue.com