There is a common misconception in the real estate world regarding condominiums. Most people associate the word condominium with apartment buildings. However, the word condominium actually refers to a form of real estate ownership, not the construction layout or design of the home. Let me explain.
The legal definition of condominium is: the absolute ownership of a unit based on a legal description of the airspace the unit actually occupies, plus an undivided interest in the ownership of the common elements, which are owned jointly with the other condominium unit owners. In other words, in a condominium, the owners have an individual title to the space inside their unit. They also have an undivided interest (with all the condominium owners in the development) in the physical components of the building and the land. Generally, each condominium owner pays a fee to support the maintenance of the common areas. A condominium association will make decisions about the expenditures for repairs and handle administrative work to manage the common areas of the project.
Condominium Ownership Rules
It is very important to read the condominium rules and documentation carefully, if you are considering purchasing a condominium. The condominium rules are specific to each development. The condominium documents specify what maintenance is covered by the common budget. In one case, the association may handle all exterior components: decks, pools, sidewalks, driveways, etc. In another, the documents may require that the individual owners be responsible for complete maintenance of their units, including foundations, roofs and exterior walls.
Fee Simple Ownership
In contrast to the condominium ownership, you can also own real estate by fee simple. Fee simple ownership is the most commonly used type of ownership. Simple means unconstrained and fee refers to legal rights of the land. Fee simple ownership is the absolute and unqualified legal title to real property, including both buildings and land.
Fee Simple Ownership Rules
With fee simple ownership there are a few possibilities regarding owner obligations.
- The property may not be in a subdivision, in which case there will be no subdivision restrictions attached to your deed that affect your use of the property. You may still be governed by zoning laws or by city or county ordinances.
- The property may be a part of a subdivision that has very minimal restrictions, no common areas, no architectural control committee and no mandatory dues. This is often found in older subdivisions.
- The property may be part of a subdivision with a legally created homeowners association, where each homeowner is required to be a member of the association and pay mandatory dues. The association may require a certain level of maintenance by each property owner and enforce subdivision rules.
Whether buying a condominium or purchasing a fee simple property, buyers need to have a clear understanding of the type of ownership they will have in the property. Your real estate agent can answer questions about the type of property ownership and explain any rules associated with the property prior to your purchase.
For all your real estate needs, please contact Belinda Jacobson-Loehle at Jacobson Realty and Home Staging today.
Sign up now for a FREE copy of my eBook, “The Real Estate Key – What You Need to Know!”
880 total views, 1 views today