Buying a Condo

What is a Condo?

The condominium form of home ownership developed relatively recently. It is popular throughout NY State and the U.S.

The owner of a condominium home holds a fee simple title to the home and to a percentage of other parts of the structure and land, referred to as common elements. Simply put, a condo owner owns everything within the interior walls and shares everything else. Common elements include such items as land, walls, public areas, and the roof. Lawns, landscaping, amenities such as a swimming pool, tennis court, or golf course, may also be considered common elements.

A condo could be an apartment in a high-rise or mid-rise apartment building, in a garden-style complex, an attached townhouse or even a single-family, detached house. Condominium ownership can also be used for commercial property or office buildings.

In our area, condominiums are typically administered by an association of the homeowners or a board of managers elected by the homeowners. The condominium may manage itself or hire a property manager. In either case, owners pay monthly fees for maintenance expenses. Short term assessments may be added to the monthly fees to cover the expense of improvements or repairs to common elements.

Condo owners are usually free to alter or renovate interior aspects of the home, with proper permits from the local municipality, but without the requirement of approval from the homeowners' association. There are usually rules against alternations of common elements.

Individual owners receive tax bills from the municipality where the home is located. Generally, property taxes are lower for a condominium home than a similar single-family residence. The owner is free to obtain a mortgage on the home. Home owners are generally allowed to rent their units to others; however the homeowners' association may impose rules that limit the number of units that can be occupied by rental tenants at one time. While a prospective buyer may have to submit an application, approval by the association or board of managers may not be required. In some cases, however, the application may not be approved if to do so would negatively affect residents. These situations occur very infrequently.

Is a townhouse a condo or a single family home?

A dictionary definition of a "townhouse" addresses only architectural qualities. A townhouse is usually defined as a multi-story structure with one or two shared walls and no residence above or below it. It might also be referred to as a "row house". Many condominium complexes are built as townhouse residences rather than single-level apartments in a larger building.

What may confuse buyers in this area are complexes with townhouses that are not condos. These may be Planned Urban Developments (PUDs). Here the townhouse owner also owns the land directly under the home and sometimes additional land as well. There are still common elements that are maintained with monthly fees. The taxes for these homes may be higher than a similar condominium townhouse.

Buying a Condo

When considering whether or not to purchase a condo, here are some of the items you can enter in your "plus" column:

  • Condominiums typically offer desirable amenities such as a gym, swimming pool, tennis courts, etc.
  • Home owners are freed from having to tend their lawns, shovel snow, etc.
  • Monthly common charges may sometimes include some utilities.
  • Condo residences could have much lower property taxes than a single-family home with equivalent square footage of living space.

The items for your "minus" column include:

  • Homeowners pay for amenities with their monthly "common charges" whether or not they use those amenities. The more amenities there are the higher the common charges are likely to be.
  • There are mortgage loan programs that preclude the purchase of a condo, especially if the condominium, as a whole, is not financially sound. This could be due to any number of factors and the buyer should always inform her/his lender of the intention to purchase a condo before signing a contract of sale.
  • The homeowners' association may have set rules that are not consistent with a prospective buyer's lifestyle. For example, there could be rules against having certain types of pets or any pets at all on the premises. Tenants may be prohibited from installing laundry appliances or dishwashers in their apartments. Renting may be limited to only a certain number of residences at any given time.

This website is intended to provide general information to buyers and sellers of real property. The information it contains is believed to be accurate, but it is subject to errors and omissions. All information should be verified.