Splitting income from common parts among the owners

When a condominium collects a lease fee, an indemnity or a consideration for the use of a common good, that sum does not belong to the condominium as a body but to the individual owners. The general rule is that income is split in proportion to the thousandths (millesimi) of ownership, in the same way as expenses, under Article 1123 of the Italian Civil Code. The condominium acts as the entity that collects and then redistributes, with full traceability in the accounts and in the annual report. Let us look at criteria, exceptions and operating practice.

The principle: income follows ownership

The civil fruits of a common good belong to the co-owners in the same measure in which they share in ownership. Since participation in the condominium is expressed by the table of general ownership thousandths, that table governs the split of income, unless a different title exists. The criterion mirrors expenses: those who contribute more to common charges, usually with a larger share, are also entitled to a larger share of the income. This prevents the administrator from distributing income arbitrarily or assigning it only to some owners.

When a table other than general thousandths applies

The general thousandths criterion is not always the only one. In some cases the income comes from a good that serves only part of the building or whose enjoyment is differentiated. If the income arises from a good intended to serve only some units, it is reasonable to split it among the interested owners alone, consistent with Article 1123, third paragraph. A different criterion may also be set by a contractual regulation or by a unanimous resolution, because departing from the proportional split affects individual rights. Absent a specific title, the administrator must apply general thousandths.

Direct crediting or reduction of expenses

Once the income is split, two operating methods remain to get it to the owners. The first is direct crediting of the share, with a payment or refund to each. The second, more common, is offsetting: the income is used to reduce the common expenses of the financial year, so each owner pays less on their condominium bill. The choice must be resolved by the meeting or governed by the regulation, and must in any case be made clear in the report. The two routes produce the same economic effect but must be documented transparently.

• direct crediting: payment of the income share to each owner
• offsetting: the income reduces the common expenses of the year
• reserve: the income feeds a fund for works or for arrears, if resolved
• in every case: the transaction must appear in the accounting register and in the report

The role of the report and transparency

The condominium report, governed by Article 1130-bis of the Italian Civil Code, must clearly represent income, including income from common goods, and its use. The explanatory summary note is the right place to explain where the income comes from, how it was split and by which criterion. Every owner has the right to inspect the supporting documents, so the contracts and fee receipts must be available. Failure to show income is one of the most serious irregularities that can justify a challenge to the report.

The link with the tax return

The split does not only have internal effects: it also defines the share of income each owner will have to declare to the tax authority. For this reason the administrator must give each owner a statement with their share of income collected during the calendar year, distinguishing the type, a property lease fee or a consideration for a concession, because the tax regime differs. It is the same amount split internally that forms the basis of the individual return: consistency between the accounts and the tax notice is essential to avoid errors.

Defaulting owners and changes of ownership

The split of income follows title to the share at the moment the fruit accrues. If a unit is sold during the year, the income share is attributed in proportion to the period of ownership, just as with expenses. For defaulting owners, the income due to them can be offset against their debt to the condominium, if the meeting or the regulation provides for it, as long as the transaction is transparent and does not become an arbitrary withholding. Offsetting must be reasoned and documented item by item.

Splitting income correctly requires updated tables, traceability and a readable report. Management software such as AmministraPro automatically applies the chosen thousandths criterion, records the income, links it to the report and produces the pro rata statement for each owner's tax return. The available features are on /funzioni and the plans on /prezzi.