Usually, apartment-style buildings are known as condos, two-story row houses are referred to as townhomes while free-standing homes on small lots are called garden homes. Sadly, this definition makes little confusion around real estate ownership. Apartment, garden home, and townhome refer to the design or construction of some homes. The word "condominium" does not imply the style or layout of a building. A condominium is a form of ownership of real estate. The system of ownership of real estate cannot be known by looking at the building design.
Condominium System
The legal meaning of condominium is: the total ownership of a unit based on a legal description of the airspace the unit, in reality, occupies, as well as a complete interest in the ownership of the mutual elements, which are owned together with the other condominium unit owners.
Each unit owner of a condominium has a different title to the space in his unit. Space is sometimes labeled as beginning with “the paint on the walls.” Additionally, each unit owner has an undivided interest in the physical components of the condominium buildings and land.
A well-known type of condominium development is the multi-story apartment. In this example, there is no land under each unit. In these developments, the condo association regularly handles maintenances of the outside building and mutual grounds, while the unit owners maintain the interiors of their units.
A condominium relationship is chosen to make decisions about expenses for repairs and to handle admin work related to the joint areas. Levies are collected from the unit owners to pay for common repairs. The association regularly holds an insurance policy that takes care of the jointly-owned areas, while separate owners hold insurance for the internal components of their units.
Condo arrangements may seem like duplexes, town homes duplexes, garden homes, or residences on normal lots. In general, the formation of a condo regime gives the developer more density allowable than would be permissible if a single-ownership lot is what he had done. This is always the reason why the condo regime is chosen in place of growth with single ownership lots.
A condominium may be built as two units of a duplex. In such case, the two owners may together come up with decisions regarding maintenance of any common areas. By setting up the units of a duplex as two condos, the owner is able to sell them to two different owners.
All condominium has rules that are precise to the development, so no assumptions should be made concerning their requirements. It is essential to read the condominium documents wisely before acquiring a condo. The documents stipulate the maintenance that is covered by the mutual budget. In one project, the association may handle external components, pools, decks, driveways, and sidewalks.
In another, the different owners may be responsible for more maintenance of their units, including roofs, foundations, and exterior walls.
If you have difficulties about the labor division among the mutual budget and the personal owners of a condominium, you can table your question before the condo board itself. The board can give you an explanation of the rules and explain how the difficulty has previously been handled.
Another way is to request a real estate attorney to analyze the documents for you. Realtors, maintenance workers or other unit owners are not right or reliable sources for the clarification of condo documents.
The real estate agreement for condominiums in Texas has a provision requesting that the buyer should be given a copy of the condo documents, with some time to evaluate them. During the document-evaluation period, the buyer may end the contract without being liable.
In addition, a resale certificate must be provided by the association president or manager. This document gives information on the current budgets, insurance coverage, special assessments, lawsuits and other issues that affect the association.
Fee Simple Ownership
Unlike the condominium regime, you may own property by fee simple. “Fee”, derives from the word, “fiefdom”, translate to legal rights in land, and “simple” means unrestricted. Fee simple is the most popular type of ownership. It is the legal title to real property that is complete, comprising both land and buildings.
In fee simple, there are numerous different opportunities with respect to your duties of ownership:
(a) Your property may not be in a subdivision whatsoever. In this case, your deed will not comprise any subdivision boundaries that limit your use of the property. Understand that there could be some deed limitations put in place by former owners. In addition to deed limitations, you may be governed by city or county decrees or zoning laws that restrict your use of the property.
(b) Your real estate may be in a subdivision with very few restrictions, no architectural control committee, no mutual areas and no mandatory dues. Usually, these are older subdivisions.
(c) Your real estate may be located in a subdivision of homes on large lots, or located in a town home or garden-home community where there is a legal created homeowners association. In this scenario, every homeowner is required to be a member of the association. The association may require compulsory dues and impose rules on the subdivision. A certain level of management may be required of each property owner. For instance, you may need association approval of external paint colors, barriers, or additions to your home.
Like the condominium form of ownership, fee simple ownership does not set how maintenance is handled or how developments are governed. For instance, the owners of a townhouse, with fee simple ownership, may be needed to fully maintain their units.
Otherwise, the owners' association may take care of roofing, painting, and yard work for the owners. In subdivisions where single-family homes are on a large lot, it is very common for the homeowners association to manage the common grounds, parks, and pools, while the individual lot owners fully maintain their own properties.
Understand your ownership rights and obligations
Before going into a condominium regime investment or buying fee simple property, you should have a good knowledge of the kind of ownership you will have in your estate. If you are getting a condominium, it would be clever to read the condo papers thoroughly and be knowledgeable about how maintenance is shared among the separate owners and the condominium association.
In the event that your ownership is fee simple, with personal ownership of the property, you should assess the deed limitations (in case they are any) and know the limitations and duties that are applicable to your property. In the fee simple form of ownership, there may be compulsory dues to pay for common area repairs, or, in some scenarios, the fees may be used for part repairs of the different properties.
In case you have questions about your type of title or about your duties as an owner, it would be clever to evaluate the property documents with a real estate lawyer before moving on with your purchase. Ask sufficient questions! A strong understanding of your type of ownership, and of your obligations as a homeowner will bring about a more fulfilling real estate purchase.