What Is a Condominium?
A condominium is a large property complex divided into individual units and sold. Ownership usually includes a nonexclusive interest in certain "community property" controlled by the condominium management. Condominium management is usually made up of a board of unit owners who sees to the day-to-day operation of the complex, such as lawn maintenance and snow removal.
- A condominium, more commonly known as a condo, is a property complex that is owned by an individual. Residential highrises are an example of condos.
- A condo owner owns the air space inside their condo, sharing an ownership interest in the community property, such as the floor, walls, sidewalks, stairwells, and exterior areas.
- A general requirement of a condo owner is monthly payments to a Homeowner’s Association (HOA), which is in charge of property upkeep.
- The main difference between an apartment and a condo is ownership, where an apartment is generally rented, while a condo is owned.
How a Condominium Works
Owning the air space of a unit in a multi-unit development is one description of a condominium. As this description indicates, the condo owner's title to the property does not include the four walls that divide their unit from other units or common areas in the property. The floor, ceiling, sidewalks, stairwells and exterior areas are all part of the common ownership of the condo.
One common type of condominium is a residential highrise that provides housing for several different families. However, the concept is not limited to high-rise buildings nor to residential properties. Residential townhouses are sometimes developed as condominiums, and the concept is also applied to commercial properties, such as an office condominium.
Condos, like apartments, are great for residents who enjoy living in a shared community without the hassle of maintaining upkeep, such as lawn work and property management.
Condominium developers differ in the ways they provide parking spaces and garages to unit owners. In some developments, these spaces are reserved as limited common areas, and the homeowners' association (HOA) maintains ownership but gives exclusive rights for the unit owner to use the space or garage. In other developments, the unit owner buys the garage or parking space and has ownership. However, the covenants, conditions, and restrictions may still limit the owner's ability to sell or rent the space independent of the unit itself.
Condominium vs. Apartment
The big difference between a condo and an apartment is that you generally own a condo, while you would rent an apartment. Apartment buildings are usually owned by a single owner (such as a property management company) and the buildings are used solely for rental purposes. However, condos that are rented out to tenants are sometimes referred to as apartments.
Thus, the only notable difference between a condominium and an apartment is ownership. A condo is generally something you own, while an apartment is something you rent.
Requirements for a Condominium
The declaration of covenants, conditions, and restrictions is a legal document that sets forth the regulations for owners of units in a condominium. This document defines the acceptable use of the unit. It describes the owner's use of limited common areas and general common areas. The declaration includes rules for selecting the board for the homeowners' association, which is a board that manages the development.
Unit owners pay fees to the HOA. These fees generally include the cost of insuring the building, shared utilities, and a reserve of funds for future maintenance of the building. The fees may also include the fees the association pays to a management company for the daily operation of the development. HOA fees are subject to increase, and if the building requires major maintenance, any costs that are not available in the reserve funds can be billed to the unit owners.