A common area is a portion of a property that is available for use by all tenants, occupants, or owners. Common areas serve the collective interests and needs of the individuals using the building or community, rather than any single private owner or tenant.
For instance, in a residential apartment building, common areas might include the lobby, hallways, laundry room, fitness center, pool, garden, and other shared amenities. In a commercial office building, common areas can include the entrance, lobby, restrooms, stairwells, and shared conference rooms.
The maintenance and upkeep of these common areas are typically covered by homeowner association (HOA) fees or similar arrangements in a residential context, or by service charges in a commercial setting. These costs are often pooled from all residents or tenants, as the use and benefit of these areas are shared.
The concept of common areas is significant in real estate investment because the quality, maintenance, and range of amenities offered can impact the property’s desirability, rental income potential, and overall value.