Although most people are unaware of it, there are fundamental differences between buying and owning a house and a condominium. These differences will undoubtedly factor into an individual’s decision about which type of residence to purchase.
The differences between purchasing a condominium (condo) and purchasing a house fall into three main categories:
- Ownership: When an individual owns a house, they have the right to exclusive ownership of all the property they have purchased. This includes areas inside and outside the home. Anyone who enters their property without permission is considered a trespasser.
- On the other hand, when an individual owns a condominium, they only have exclusive rights to the property within the walls of the condo unit. The condo owner only has a shared ownership interest in the common areas outside their unit – areas such as a hall or a courtyard. The condo owner must share this space with every other condo owner in the complex.
- Defects and repairs: The owner of a house is solely responsible for all maintenance and repairs of their home and property. A homeowner is also responsible for their own homeowner’s insurance, known as property insurance. In some cases, if an individual buys a house in a planned, developed neighborhood, they will also be required to join a homeowner’s association (HOA) and pay dues. There may be rules regarding the upkeep of yards and the appearance of homes.
- The condo owner is generally not solely responsible for repairs or upkeep of the property. Typically, a condo owner pays dues to an HOA (most condominiums require that all owners be members of the HOA). This association is responsible for the maintenance of common areas as well as maintaining property hazard insurance for the complex.
- Modification of the property: In general, the owner of a house is free to modify or repair their home as they please. Be aware, however, that there may be local zoning ordinances that apply in cases where an individual wants to add a garage, deck, or room onto the existing structure. It is important to check on those before modifying.
- Usually, a condo owner is restricted in the types of modifications they can make to the exterior of their unit. In some cases, there are also restrictions on interior modifications.
- The appearance of the condo is usually governed by covenants, conditions, and restrictions (CC&Rs) outlined in the homeowners’ association documents they receive when purchasing the condo. It is important to request a copy of these regulations before purchasing a condo so that the individual can be sure they can follow the rules. This is especially important for individuals who may have to park large vehicles, boats, or RVs at their residences. Some HOAs restrict the owner’s ability to park large vehicles in driveways or on the road.
It is important to note that houses purchased in neighborhoods with HOAs must follow the rules, just like condo owners. Some HOAs include rules prohibiting working on vehicles in the driveway and parking marked work trucks in a driveway, and some prohibit using garages as storage units. Some HOAs must approve additions such as fencing, decking, or storage sheds.
Before any purchase that includes an HOA, a potential buyer should obtain a copy of the budget and notice of current dues assessment from the HOA. Be aware that an HOA can charge all residents an assessment when maintenance or repairs are needed for the complex.
It is essential to examine and understand the rules and requirements of the HOA before purchasing a house or a condo to ensure there will be no surprises. It may also be helpful to hire an attorney to review the documents before purchase. HOA documents are often written in legalese and can be hard for a non-lawyer to understand. An attorney may be aware of issues a non-lawyer would not recognize.
