Condos 101: What are condominiums, anyway?
May 14, 2018 - Edina Realty
Whether your first friend just moved out of an apartment to a condo he purchased, or you have a vivid memory of swimming in your grandparents’ condo pool as a child, we all have our own connections with condos.
But many of us don’t know what really makes a condo, a condo — are they nicer than apartments? Smaller than townhomes? Do they have to have a gym or a shared parking garage?
In this article, we’ll seek to demystify condos and share some insights you can use to determine if buying a condo is the right decision for you.
What is a condo? Is it just an apartment that I own?
A condominium, or condo is a private residential unit that is surrounded by areas that are jointly owned and shared. Within the walls of their individual units, condo owners enjoy the same privileges as many homeowners — they are typically free to paint the walls, swap out appliances or cabinet hardware and make the space their own. In order to take care of the general upkeep of the surrounding condo complex and its common areas, condo owners pay fees to their homeowners’ association (HOA).
Perhaps you’ve never known the difference between a condo and an apartment. That’s not uncommon! The difference between a condo and an apartment can’t usually be seen from the outside of a building or even the inside of a unit. The difference lies in how condos and apartments are owned and managed.
Typically, an apartment complex is owned by a single entity, which then leases (rents) the individual apartment units to tenants for a certain amount of time. By contrast, condo units are sold to individual owners, and the condo complex is governed by the owner-funded HOA.
So if I’m a renter, who’s the landlord?
If you rent an apartment, your landlord is the person or company that owns the entire apartment building or complex. If you rent a condo, your landlord is the individual owner of your condo unit — but you’ll still have to abide by the rules of the HOA that manages the condo complex.
What do I own, exactly, if I buy a condo?
When you buy a condo, your ownership will typically extend to the walls, floors and ceilings of your individual unit. You may also have rights to a garage stall or storage area, which could be an ownership right or simply a license to use the space exclusively. You’ll also have “interest,” or joint ownership, in the commonly-owned spaces within the condo complex.
It sounds straightforward, but there are dozens of variables within these private and shared spaces and each condo complex handles these variables differently. As you search for condos, you and your REALTOR® can request important documents that help explain exactly what you’ll own:
A condominium map (or plat) that shows where your unit is located within the building
The Declaration, Bylaws and Rules and Regulations, which are the legally binding guidelines that govern the HOA
The governing documents tend to be extremely comprehensive, as they aim to keep the peace between condo owners and eliminate those gray areas that emerge when property is jointly shared.
Imagine, for example, just one wall in your condo. Do you own the surface, which means you can paint? The drywall, which means you can hang that gallery wall without penalty? Do you own the entire wall — and if so, what happens when the pipes in the unit above you spring a leak and the interior of your wall begins rotting as a result? These are all questions that a condo’s governing documents would aim to answer.
What are the benefits to owning a condo?
There are many advantages to owning a condo. Many condo owners find that they love to have control over their own private space, while remaining free from many of the larger projects, yard work and everyday tasks that come with homeownership. You also won’t have to invest your money in a new lawn mower or power washer. If you want to avoid shoveling your driveway and sidewalks in the winter, or making big decisions on when to replace a roof, you may find that condo living is right for you.
The shared spaces and amenities — which can include everything from outdoor patios and fire pits, to gyms and saunas, to a dedicated security team — are also important to many condo owners.
And as apartment rental prices continue to rise across our market, many condo owners find that owning can be cost-effective, too. After all, who wants to build equity for a landlord when they could be building it for themselves?
What are the downsides to owning a condo?
No snow maintenance, and you get to take a daily soak in the hot tub? Perhaps owning a condo sounds too good to be true. It’s important to keep in mind that with the benefits of shared space can come some disadvantages.
As a condo owner, you’ll pay your HOA fees, which will be used for general property maintenance and long-term projects deemed necessary by the HOA. Condo owners sometimes disagree with how their fees are being used.
The rules outlined in your condo’s documents can also be limiting. Some condos may not allow furry friends, or they may restrict you from renting your property in the future. Or perhaps they only allow certain types of pets and have breed or weight restrictions.
In short, you’ll have to determine if the freedom from pesky tasks, maintenance and decision-making is worth the lack of control you’ll have over issues that could impact your condo unit and desired lifestyle.
What are the main reasons that people buy condos?
It’s common for renters to make the jump to condo ownership, as they can get a taste of homeownership without immediately taking on all the responsibilities that come with owning a single-family home.
On the other end of the spectrum, it’s also common for retirees and empty nesters to move into condos as they downsize to a property that is space-efficient and meets their changing needs.
And while a condo can be part of a smaller building, they are often found in city high-rise buildings. Urban dwellers who don’t mind trading space and land for the convenience of living close to (or in the heart of) the city may find that a condo is a great option.
Last, people tend to buy condos because they like the idea of a built-in community, shared spaces and built-in amenities. It’s not uncommon for condo buyers to be swayed by a complex’s gym and swimming facilities, convenient parking or community garden space.