Condominium

Definition of co-ownership

What is a co-ownership?

A condominium (also called a “condo”) is a large building complex made up of individual units, and each unit is owned separately. Ownership generally includes a non-exclusive interest in certain “community properties” controlled by the management of the condominium. Condominium management is typically made up of a council of unit owners who oversees the day-to-day operations of the complex, such as lawn maintenance and snow removal.

Key points to remember

  • A condominium, or condo, is an individual unit in a complex or a unit building.
  • A condo owner owns the airspace inside their condo, sharing an ownership interest in community property, such as the floor, walls, sidewalks, stairwells, and outdoor spaces .
  • A general requirement of a condo owner is to make monthly payments to a condominium association that is in charge of maintaining the property.
  • The main difference between an apartment and a condo is ownership; an apartment is usually rented and a condo is owned.
  • If major repairs are required, condo owners may be charged special fees, in addition to their regular fees, to cover these costs.

Take a look now: How does condominium ownership work?

How a condominium works

Owning one-unit airspace in a multi-unit development is a description of a condo. As this description indicates, the condo owner’s title deed does not include the four walls that separate his unit from other units or common areas of the property. The floor, ceiling, sidewalks, stairwells and outdoor spaces are all part of the common property of the condo.

A common type of condominium is a residential skyscraper that houses several different families. However, the concept is not limited to high-rise buildings, nor to residential properties. Residential row houses are sometimes developed as condominiums, and the concept is also applied to commercial properties, such as office condominiums.

Condos, like apartments, are great for residents who enjoy living in a shared community without the hassle of upkeep, like lawn work and property management.

Special considerations

Condominium developers differ in the way they provide parking spaces and garages to unit owners. In some developments, these spaces are reserved as limited common areas, and the condominium association retains ownership of them, but gives exclusive rights to the owner of the unit to use the space or garage. In other developments, the owner of the unit purchases the garage or parking space and becomes the owner. However, 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 usually own a condo, while you rent an apartment. Apartment buildings are generally owned by one owner (such as a property management company) and the buildings are used for rental purposes only. However, condos that are rented to tenants are sometimes referred to as apartments.

So the only notable difference between a condominium and an apartment is ownership. A condo is usually something you own, while an apartment is something you rent out.

Requirements for a condominium

The Declaration of Covenants, Conditions and Restrictions is a legal document that sets out 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 the limited common areas and general common areas. The statement includes rules for selecting the board of directors of the owners association, the board that manages the development.

Unit owners pay a fee to the condominium association. These charges typically include the cost of building insurance, shared utilities, and a reserve of funds for future maintenance of the building. Fees may also include fees that the association pays to a management company for the day-to-day operation of the development. Condo fees are subject to increase, and if the building requires major maintenance, any costs that are not available in the reserve funds may be charged to the owners of the units.

Advantages and disadvantages of condos

Buying a home is considered one of the biggest investments a person will make in their lifetime. While rewarding, it’s important to understand the implications of buying real estate, especially a condo.

Living in a condominium offers its owners several advantages, such as access to amenities that are normally only available at a cost. Owners can enjoy exclusive use of swimming pools, tennis courts and fitness facilities at no additional cost. Some upscale condos even provide access to spas, rooftop entertainment areas, and gardens.

Many condo associations employ security services to protect their community and protect their residents. Whether locked in doors, monitored by cameras, or watched by security personnel, the community benefits from extra eyes to ward off potential intruders (and added peace of mind as a result).

Condo owners are required to pay condo association fees to maintain the integrity of the community. Most of the time, condo fees provide for the maintenance of the property, including common areas, exterior structures, and some interior structures and appliances. The fees can vary depending on what the fees bear, and some can be expensive. For major repairs, condo owners may be charged special fees to cover the costs.

Much like apartments, condos often share common walls, as well as common areas. Living nearby and sharing walls and spaces limits the degree of privacy one can enjoy. Unlike individual single-family homes, residents must tolerate neighborhood nuisances.

In addition, condos are managed by condo associations which impose certain rules and restrictions on owners. The condominium association governs how common spaces can be used, the extent to which condominium owners can make improvements or changes to their units, and sometimes who can enjoy those spaces with them.

Advantages
  • Approvals

  • Security services

  • Covered maintenance

The inconvenients
  • Additional charges

  • Less privacy

  • Restricted use

Condo FAQs

What does condo mean?

A condo, short for condominium, is an individual residential unit in a building or a complex made up of other residential units. Condo owners share a common space and often pay association fees to maintain common space, amenities, and other shared resources.

What is the difference between an apartment and a condo?

Apartments are individual residential units in a building or complex that are rented out by their occupants. In contrast, condos are residential units in a building or complex that are owned separately.

Are condos cheaper than houses?

All other things being equal, condos are generally less expensive than houses. Condo owners pay association fees that cover the costs of maintenance, amenities, and other resources. These fees are generally lower than the costs of maintaining a home. However, some condos, especially luxury condos in affluent neighborhoods, can command a lot more than the average home.

Are condos cheaper than apartments?

Whether condos are cheaper than apartments depends on several factors, such as location, size, and amenities. Rent for an apartment is charged at a premium to generate a profit or income, making the direct cost of living in the unit more expensive than owning a condo. However, on average, renting an apartment is cheaper than owning a condo because apartment renters do not pay association fees. All maintenance costs are absorbed by the owners of the apartment rather than the tenants. When major work is not covered by the costs of the condominium association, the co-owners are also responsible for contributing to the cost. Apartment tenants are not responsible for paying for major works required on the complex or building.

What is a condo appraisal?

An appraisal is a fee charged to condo owners for major repairs or improvements not covered by regular condo fees. The appraisal fee is generally based on the size of the unit. If all units are the same size, each owner will pay an equal appraisal amount.

The bottom line

A condominium, or condo, is a residential unit owned by an individual in a complex or building of similar units. Condo owners own their units, but share common areas, amenities, and other resources. They pay a condominium fee, which covers the cost of upkeep, amenities, and upkeep of common areas. If major repairs are required and the condominium association fees are insufficient to cover these costs, condominium owners will be required to pay a special assessment. Owing to the additional costs, owning a condo is generally less expensive than owning a house. There are pros and cons to owning a condo. Therefore, it is important to understand the implications before committing to buying one.


Source link