Condominium

A form of ownership in which individuals purchase and own a unit of housing in a multi-unit complex. The owner also shares financial responsibility for common areas.

A condominium, or condo, is the form of housing tenure and other real property where a specified part of a piece of real estate (usually of an apartment house) is individually owned while use of and access to common facilities in the piece such as hallways, heating system, elevators, exterior areas is executed under legal rights associated with the individual ownership and controlled by the association of owners that jointly represent ownership of the whole piece. Colloquially, the term is often used to refer to the unit itself in place of the word "apartment". A condominium may be simply defined as an "apartment" that the resident "owns" as opposed to rents. Condominium is the legal term used in the United States and in most provinces of Canada. In Australia and the Canadian province of British Columbia it is referred to as strata title. In Quebec the term "divided co-property" (French: co-propriété divisée) is used, although the colloquial name remains 'condominium'. In France the equivalent is called copropriété (co-ownership), usually managed by the syndic. In New Zealand an "apartment" refers to a unit that is owned, while a rented unit is referred to as a "flat". The difference between a condominium and an apartment is purely legal: there is no way to know a condo from an apartment simply by looking at or visiting the building. What defines a condominium is the form of ownership. The same building developed as a condominium (and sold as individual units to different owners) could actually be built someplace else as an apartment building (the developers would retain ownership and rent individual units to different tenants). Technically, a condominium is a collection of individual home units along with the land upon which they sit. Individual home ownership within a condominium is construed as ownership of only the air space confining the boundaries of the home (Anglo-Saxon law systems; different elsewhere). The boundaries of that space are specified by a legal document known as a Declaration, filed of record with the local governing authority. Typically these boundaries will include the drywall surrounding a room, allowing the homeowner to make some interior modifications without impacting the common area. Anything outside this boundary is held in an undivided ownership interest by a corporation established at the time of the condominium’s creation. The corporation holds this property in trust on behalf of the homeowners as a group–-it may not have ownership itself. Typically, a condominium consists of multi-unit dwellings (i. e. , an apartment or a development) where each unit is individually owned and the common areas, such as hallways and recreational facilities, are jointly owned (usually as "tenants in common") by all the unit owners in the building. A condominium also consists of bylaws that all the home owners are supposed to follow such as indoor noise control. It is also possible for condominiums to consist of single family dwellings: so-called "detached condominiums" where homeowners do not maintain the exteriors of the dwellings, yards, etc. or "site condominiums" where the owner has more control and possible ownership (as in a "whole lot" or "lot line" condominium) over the exterior appearance. These structures are preferred by some planned neighborhoods and gated communities. A homeowners association (HOA), consisting of all the members, manages the condominium through a board of directors elected by the membership. The same concept exists under different names depending on the jurisdiction, such as "unit title", "sectional title", "commonhold," "strata council," or "tenant-owner's association", "body corporate", "Owners Corporation", "condominium corporation" or "condominium association. " Another variation of this concept is the "time share" although not all time shares are condominiums, and not all time shares involve actual ownership of (i. e. , deeded title to) real property. Condominiums may be found in both civil law and common law legal systems as it is purely a creation of statute. The description of the condominium units and the common areas and any restrictions on their use is established in a document commonly called a "Master Deed" (also known as the "Enabling Declaration", the "Declaration of Conditions", or the "Condominium Document") which authorizes a board of directors to administer the condominium affairs and to assess the owners for adequate maintenance. Rules of governance are usually covered under a separate set of Bylaws which generally govern the internal affairs of the condominium. Condominium bylaws usually establish the responsibilities of the owners' association; the voting procedures to be used at association meetings; the qualifications, powers, and duties of the board of directors; the powers and duties of the officers; and the obligations of the owners with regard to assessments, maintenance, and use of the units and common areas. Finally, a set of Rules and Regulations providing specific details of restrictions and conduct are established by the Board and are more readily amendable than the Declaration or Bylaws. Typical rules include mandatory maintenance fees (perhaps collected monthly), pet restrictions, and color/design choices visible from the exterior of the units. Generally, these sets of rules and regulations are made available to residents and or as a matter of public record via a condo or homeowners association website, or through public files depending on the state and its applicable laws. Condominiums are usually owned in fee simple title, but can be owned in ways that other real estate can be owned, such as title held in trust. In some jurisdictions, such as Ontario, Canada or Hawaii USA, there are "leasehold condominiums" where the development is built on leased land. In general, condominium unit owners can rent their home to tenants, similar to renting out other real estate, although leasing rights may be subject to conditions or restrictions set forth in the declaration (such as a rental cap for the total number of units in a community that can be leased at one time) or otherwise as permitted by local law. Condominium ownership is also used, albeit less frequently, for non-residential land uses: offices, hotel rooms, retail shops, group housing facilities (retirement homes or dormitories), and storage. The legal structure is the same, and many of the benefits are similar; for instance, a nonprofit corporation may face a lower tax liability in an office condominium than in an office rented from a taxable, for-profit company. However, the frequent turnover of commercial land uses in particular can make the inflexibility of condominium arrangements problematic. The first condominium law passed in the United States was in the Commonwealth of Puerto Rico in 1958. English Common law tradition holds that real property ownership must involve land, whereas the French civil law tradition recognized condominium ownership as early as the 1804 Napoleonic Code; thus, it is notable that condominiums evolved in the United States via a Caribbean government with a hybrid common-civil legal system. In 1960, the first condominium in the Continental United States was built in Salt Lake City, Utah. Initially designed as a housing cooperative (Co-op), the Utah Condominium Act of 1960 made it possible for "Graystone Manor" (2730 S 1200 East) to be built as a condominium. The legal counsel for the project, Keith B. Romney is also credited with authoring the Utah Condominium act of 1960. Romney also played an advisory role in the creation of condominium legislation with every other legislature in the U. S. Business Week hailed Romney as the "Father of Condominiums". He soon after formed a partnership with Don W. Pihl called "Keith Romney Associates", which was widely recognized throughout the 1970s as America's preeminent condominium consulting firm. Although often mistakenly credited with coining the term "condominium", Romney has always been quick to point out that it harks back to Roman times, and that he merely borrowed it. Nowadays, the leadership of the industry is dominated by Community Associations Institute or CAI. Section 234 of the 1961 National Housing Act allowed the Federal Housing Administration to insure mortgages on condominiums, leading to a vast increase in the funds available for condominiums, and to condominium laws in every state by 1969. Many Americans' first widespread awareness of condominium life came not from its largest cities but from south Florida, where developers had imported the condominium concept from Puerto Rico and used it to sell thousands of inexpensive homes to retirees arriving flush with cash from the urban Northern U. S. The primary attraction to this type of ownership is the ability to obtain affordable housing in a highly desirable area that typically is beyond economic reach. Additionally, such properties benefit from having restrictions that maintain and enhance value, providing control over blight that plagues some neighborhoods. Major American cities, including Miami, San Francisco, Chicago, New York City, Los Angeles, and Washington D. C. , have abundant condo development. In recent years, the residential condominium industry has been booming in all of the major metropolitan areas such as Miami, San Francisco, Seattle, Boston, and New York. It is now in a slowdown phase. According to Richard Swerdlow, CEO of Condo.com, "You're not going to see this giant overbuild again. It's hard to imagine that you'd see in the next decade what we just saw. Real estate brokers and the developers were in almost a ticket-collecting mode. They were processing orders because there was so much business to go around. Now that sort of investor phenomenon has gone away. " He added, "That phenomenon has stopped. "An alternative form of ownership, popular in the United States but found also in other common law jurisdictions, is the "cooperative" corporation, also known as "company share" or "co-op", in which the building has an associated legal company and ownership of shares gives the right to a lease for residence of a unit. Another form is leasehold or ground rent in which a single landlord retains ownership of the land on which the building is constructed in which the lease renews in perpetuity or over a very long term such as in a civil law emphyteutic lease. Another form of civil law joint property ownership is undivided co-ownership where the owners own a percentage of the entire property but have exclusive possession of a specific part of the property and joint possession of other parts of the property; distinguished from joint tenancy with right of survivorship or a tenancy in common of common law. In Ontario, condominiums are governed by the Condominium Act, 1998 with each development establishing a corporation to deal with day-to-day functions (maintenance, repairs, etc. ). A board of directors is elected by the owners of units (or, in the case of a common elements condominium corporation, the owners of the common interest in the common elements) in the development on at least a yearly basis. A general meeting is held annually to deal with board elections and the appointment of an auditor (or waiving of audit). Other matters can also be dealt with at the Annual General Meeting, but special meetings of the owners can be called by the board and, in some cases, by the owners themselves, at any time. In recent years the condo industry has been booming in Canada, with dozens of new condo towers being erected each year. Toronto is the centre of this boom, with 17,000 new units being sold in 2005, more than double second place Miami's 7,500 units. Outside of Toronto, the most common forms of condominium have been townhomes rather than highrises, although that trend may be altered as limitations are placed on "Greenfields" (see Greenfield land) developments in those areas (in turn, forcing developers to expand upward rather than outward and to consider more condominium conversions instead of new housing). Particular growth areas are in Kitchener/Waterloo, Barrie, and London. In fact, after Toronto, the Golden Horseshoe Chapter of the Canadian Condominium Institute is one of that organization's most thriving chapters. The Ontario Condominium Act, 1998 provides an effectively wide range of development options, including Standard, Phased, Vacant Land, Common Element and Leasehold condominiums. Certain existing condominiums can amalgamate, and existing properties can be converted to condominium (provided municipal requirements for the same are met). Accordingly, the expanded and expanding use of the condominium concept is permitting developers and municipalities to consider newer and more interesting forms of development to meet social needs. On this issue, Ontario condominium lawyer Michael Clifton writes, "Condominium development has steadily increased in Ontario for several years. While condominiums typically represent attractive lifestyle and home-ownership alternatives for buyers, they also, importantly, introduce a new approach to community planning for home builders and municipal approval authorities in Ontario. …[There are] opportunities for developers to be both creative and profitable in building, and municipalities more flexible and imaginative in planning and approving, developments that will become sustainable communities. "Condominiums (Danish ejerlejlighed, literally "owner-apartment") comprise some 5 % of Danish homes. They are traded and mortgaged on the same markets as free-standing houses, and are treated legally much like other forms of real estate. Each owner-tenant directly owns his own apartment; the rest of the building and the ground on which it stands is owned jointly by the apartment owners who execute their joint ownership through an owner's association. The expenses of maintaining the joint property is shared pro rata among the owners. Another 5 % of Danish homes are in housing cooperatives (Danish andelsbolig), which occupy a legal position intermediate between condominiums and housing associations. The entire property is legally owned by a non-profit corporation in which the tenants own shares; each share carries the right and duty to lease an apartment from the cooperative. Shares can be bought and sold, but often the cooperative's rules strictly limit the price for which they may change hand. (In contrast, condominiums are traded on a free market). Because the official share prices are often lower than the market value and sellers often retain freedom to select whom to sell to, under-the-table payments are common. Current public policy favors condominiums over housing cooperatives, and recent legislation have aimed ad making the latter more condominium-like. For example, since 2005, cooperative shares may be used to secure bank loans. (However, Danish mortgage banks still may not mortgage individual housing cooperative apartments). Condominiums (Norwegian Eierseksjon) was formally introduced in 1983. Some 10 % of Norwegian homes are condominiums. Condominium is the most common tenure of flats and rowhouses in Norway. In England and Wales the equivalent of condominium is commonhold, a form of ownership introduced in September 2004. As of 3 June 2009, there were 12 commonhold residential developments comprising 97 units in England and one commonhold residential development, comprising 30 units, in Wales. Condominiums are more commonly known as "flats" in India. This type of housing is very common in larger cities like Delhi, Mumbai (Bombay), Chennai (Madras), Kolkata (Calcutta), Bengaluru (Bangalore) and Hyderabad and but are not commonly found in rural areas. In India, they are registered as "co-operative housing society" rather than condominiums in that the owners actually have a share of the co-op and not the actual real estate itself. Owners can sell the "share" in the open market, but they must receive approval from the co-op to complete the transaction. In Singapore, "Condo" or "Condominium" are terms used for housing buildings with some special luxury features like security guards, swimming pools or tennis courts. Most housings without such features is built by the governmental Housing Development Board ("HDB"), and such HDB units can be possessed for rent or individually bought from the government. Condominiums and HDB flats make up the overwhelming majority of available residential housing in the country. On 1 May 2009 condominiums (ägarlägenheter) became available for the first time under Swedish law. Of the 14,447 newly built apartments completed in 2009, only six were condos. In Australia, condominiums are known as "community title schemes".