1. Condominium is a type of ownership.
- Condominium is a form of ownership of real estate.
- Each unit owner of a condominium has individual title to the space inside his unit, plus an undivided interest in the common elements. The common elements are owned jointly with the other condominium unit owners.
- The individual space you own may be described as beginning with the paint on the walls.
- The common elements include the physical components of the buildings, walkways, amenities, and land.
2. Condominium is not a type of building.
- Condominium type of real estate ownership has nothing to do with the design of the building.
- A condominium may be an apartment, duplex, townhome, or free standing home on a large lot.
- In apartment style projects it is clear that the unit owners do not own the land individually. However, keep in mind that the land is not owned individually in any condo regimes, including those with free standing homes.
3. Owners share an interest in common elements.
- Two units of a duplex may be a condominium. The owners of each side of the duplex may decide that each one will maintain his own side, and each will have a fenced yard.
- However, this does not mean that each unit owner owns a divided share of the land and buildings.
- Their interest in the land and structure is undivided. Their individual ownership includes only the space inside their unit.
- By setting up the units of a duplex as condos, the developer is able to sell them to two different owners. Otherwise the duplex could only be sold as a single property.
4. Owners share common area maintenance.
- A condominium association is often elected to handle repairs and administrative work related to the common areas.
- Normally, each unit owner pays fees for common maintenance.
- The association usually holds an insurance policy covering the jointly owned areas, while individual owners carry insurance for some interior components of their units. In condo ownership, you need to pay attention to what your private policy should cover, versus the common policy.
5. Condominium allows for greater density.
- The creation of a condo regime allows the developer to get more density approved than would be allowed for single-ownership lots.
- This is the reason why a condo regime is done instead of a development with single ownership lots.
6. Each condominium has its own rules.
- No assumptions should be made about how a condominium is managed and what is covered by the common budget.
- Each condo project has its own specific rules. It is very important to read the condo documents carefully.
7. Review the condominium documents.
- The Texas real estate contract requires that the buyer be given a copy of the condo documents, with some time to review them.
- During the document-review period, the buyer may terminate the contract without penalty.
8. Read the resale certificate.
- Condo documents must include a resale certificate. This is a form that shows budgets, insurance, special assessments, any lawsuits and other matters that affect the association.
- The resale certificate is an important piece of information about the condominium project. It should be reviewed before closing, along with the condo documents.
9. Find out what is covered by the common budget.
- The condo documents spell out which repairs and upkeep will be handled by the common budget.
- In some cases, the association will maintain all exterior components, decks, pools, sidewalks and driveways.
- In other cases, the individual owners may be responsible for their own roofs, decks and exterior painting.
- There is no standard set of repairs that are covered by the common budget. This is often a source of contention.
10. Don't be afraid to ask questions.
- Make sure you have a clear understanding of the responsibilities of the condo association and of the individual unit owners.
- If you have a question, the condo board itself is the best source of answers.
- The board members can give you their interpretation of the rules and clarify how the issue has been handled in the past.
- You might also ask a real estate attorney to review the documents.
- Neighbors, Realtors, or maintenance people are not reliable sources for interpretation of condo documents.
- Before buying a condo, be sure to review the documents, and don't be afraid to ask questions!
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