Condos, Townhomes, Cooperatives: Hybrid Ownership

How they differ

The following explanations will help you sort out the differences and similarities in ownership of those three types of real estate.

Condominiums - Condos

• An individual condo owner holds title to the condominium unit only, not the land beneath the unit, so condos can be stacked on top of each other.

• All condo owners share title to common areas. Common areas include land, the exterior of buildings, hallways, roofs, swimming pools -- any area used by multiple owners.

• Condominium owners pay property taxes on their individual units.

• A property owners' association usually manages the complex and collects fees from all condo owners in order to maintain common areas.

Townhouses - Townhomes

• Townhouses are usually a series of single story or multistory units that are linked to each other horizontally by common walls.

• Townhouse owners hold title to their units and the land beneath them, so townhouse units cannot be stacked on top of each other. As with condos, common areas are owned jointly by all townhouse owners.

• Townhouse owners pay property taxes on their individual units.

• A property owners' association usually manages the townhouse complex and collects fees from all owners in order to maintain common areas.

Cooperatives - Co-ops

• If property is a cooperative arrangement, title to all associated real estate is held by a corporation. Buyers purchase stock in the co-op corporation and are considered shareholders, not owners of real property. Each shareholder holds a lease to his unit that runs for the life of the corporation.

• Taxes are paid by the corporation. Any mortgages are normally held and paid by the corporation. All costs to operate the building are shared by shareholders.

• New cooperative shareholders must usually be approved by an administrative board.

• Cooperative ownership is not common in most states of the US.

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