Just as you can’t judge a book by a cover, you can’t judge a community by the way it looks on the outside. If you are looking at the exteriors in a development and you don’t know whether it is a townhome or a condominium community, don’t worry, you are not alone!! From the exterior, condominium and townhome communities can look identical. Even developers sometimes use the words “condominium” and “townhomes” interchangeably, as do real estate agents, without realizing the legal implications, thereby creating more confusion among homeowners. Consider this article a brief tutorial to help you learn and understand more about the legal differences between condominiums and townhomes.
Multi-story condominium units that are connected to another unit by a wall shared with an adjoining condominium unit may look exactly like a townhome from the outside, but the ownership rights with respect to both the interior of each unit and the property outside of each unit are extremely different. Typically, in a condominium, the unit owner buys the interior space of a unit beginning at the studs in the wall and he or she owns the interior of the unit, including the dry wall, windows, doors and air conditioning unit. However, the exterior of the building, the roof, any landscaping outside the building and any pipes or wires that serve more than one unit are owned by all of the condominium owners as tenants-in-common. What many people do not realize is that in a condominium form of ownership the condominium association does not actually own any property. Despite this lack of ownership, the condominium association almost always maintains the roof and exterior building surfaces of each unit and all amenities.
The fact that the condominium association does not own any property can come in particularly helpful during tax season. As April 15 has thankfully come and gone, many of you may have looked at your property tax bills and noticed that the tax bill for your condominium unit contained charges for the unit as well as an additional charge for other improved property. Since the association does not own any property in a condominium, it does not receive a separate tax bill for the property located outside of each unit. This property is owned by all unit owners equally and consequently, each unit owner is assessed his or her fair share of this property which in turn is reflected in each unit owner’s tax bill.
In Georgia, condominiums are governed by the Georgia Condominium Act, which places numerous requirements on developers when they are constructing condominium projects. For those of you who live in a condominium and would like to learn more about this type of ownership, you might find it helpful to review this legislation. It definitely will not be the most exciting work that you have ever read, but it may answer some questions about the contents of the declaration of condominium governing your community.
Townhomes, on the other hand, are owned in fee simple by the unit owner. Even though townhomes are also connected to another unit by a party wall, the homeowner typically owns the dirt below and the air above the unit and perhaps a bit of the property in front or behind the unit as well. Another key difference is that the townhome or homeowners association owns the common property and the amenities. The association’s maintenance obligation with regard to the townhomes themselves is determined by the developer at the time of the drafting of the declaration and consequently, the association’s maintenance responsibility may vary greatly between communities. In some townhome projects the association maintains the exterior of the unit, similar to a condominium, regardless of ownership by the unit owner and in other communities the owners are responsible for maintaining the roof and/or the exterior building surfaces. The declaration of protective covenants applicable to your community should delineate what your association is obligated to maintain. Keep in mind that the more your association is responsible for maintainaining, the higher your annual or general assessments will likely be. On the other hand, having the association maintain the exteriors will ensure that maintenance is performed uniformly and hopefully in a timely manner!
Since the townhome association usually owns the common property in the community, it generally has the right to convey this property to other business entities and can make rules and regulations pertaining to the use of the common property. As you know now, a condominium association does not own any property in the condominium community and therefore can not convey the common elements without the consent of every unit owner in the condominium. In this way, owners in a condominium essentially have more rights with respect to the property outside of their units than owners in a townhome community.
After reading this brief article you may be thinking that you still can’t look at a community and determine whether the homes are condominium units or a townhomes. But now you know how to find out! It is only after sifting through all of the relevant association documents that govern the community that you will truly be able to determine whether you are looking at a condominium or townhome unit and what the differences are between the two.