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Everything You Need to Know About Condominium Associations

As a resident of a managed community, you’re likely familiar with condominiums or “condos.” It’s often assumed that a condo is a type of home; however, that isn’t always the case. There’s much more to a condo than the actual building, and understanding its distinctions is crucial to buyers interested in condo living. Read on to learn more about condos and get answers to some of the most frequently asked questions about condominium associations.   

What’s a condominium?

Contrary to popular belief, a condominium isn’t a type of building or property. Almost any kind of real estate, from single-family detached homes and high-rises to townhomes and office complexes, can be in a condominium-style of ownership. What makes something a condominium is the ownership structure. All owners not only own their individual unit, but they also share in the ownership and responsibility of maintaining the common structural elements and amenities.

How is a condominium association different from a homeowners’ association?

In a homeowners’ association (HOA), the association owns common areas, such as lobbies, pools, and gyms, and all owners are members of that association. In a condominium association, the individual owners own a percentage of all shared property—the association doesn’t have ownership of any real estate. Understanding this difference is important, as it can drive operations, procedures, and policies. It may also impact things like taxes, insurance, refinancing requirements, and more.  

How does the condominium association operate?

Much like an HOA, an elected board of volunteers runs the condominium association on behalf of all owners. Both are set up as a non-profit corporation and have governing documents that include the declaration, bylaws, rules, articles of incorporation, and other materials that govern the day-to-day operations. However, a condominium association's rules and regulations are typically more comprehensive and detailed than those of an HOA.

Do condominium association members pay fees?

Yes, all condominium association members must pay fees. While the amount varies by location and available amenities, condo fees tend to be slightly higher than HOA fees. They're higher because all condominium owners are collectively responsible for maintaining the property and shared elements, whereas, in an HOA, individual homeowners must only maintain their own homes. In addition, each condo owner will likely pay a different amount based on their percentage of ownership. In an HOA, costs are divided up evenly among all residents.

Who is responsible for maintenance?  

There is often a lot of confusion about who maintains what in condominium associations. It’s different for each community, so it's always best to check the governing documents to clarify. However, condominium owners are generally responsible for maintaining things that serve their individual units, like pipes, appliances, windows, and HVAC equipment. Conversely, the association is responsible for items that serve more than one unit, like parking lots, roofs, grounds, and clubhouses.

How does condominium insurance work?

Because every association has unique policies and requirements, consulting the insurance section of the governing documents is essential. The governing documents help owners better understand the level of coverage the association provides versus what the owner must provide. To learn more about condo insurance, check out our article, "Condo & Townhome Insurance: The Coverage Responsibilities of Associations & Owners."   

Other Types of Managed Communities

For older homebuyers looking for not only a home, but also a lifestyle, an active adult community might be the perfect fit. Promoting convenient locations, abundant amenities, quiet neighborhoods, and mostly maintenance-free living, active adult communities are quickly becoming the preferred choice for baby boomers. Read our article, “Everything You Need to Know About Active Adult Communities,” to learn more.