With housing inventory still lagging, sellers continue to have the upper hand.
What is a condominium?
A condominium is a building that contains multiple units available for owner occupancy. Each unit in the building has an owner, but all of the condominium owners own the common areas and the structures that make up the property.
Condominiums, commonly referred to as condos, are popular with people who want to own their own home but do not want to deal with the maintenance obligations that come with owning a single-family home. When you own a condo, you own the space between the walls that make up the unit. The walls, floors and ceilings that divide the units from each other, stairwells and other exterior areas are all considered common areas. This means that all of the owners of the building’s units own these those areas.
To ensure proper maintenance of the common areas, each unit owner must join the homeowners association. The HOA requires that unit owners pay fees on a regular basis, usually monthly or quarterly, to maintain the common areas, share utility costs and save for future building improvements. If the costs exceed the HOA’s funds, the HOA reserves the right to temporarily or permanently increase its fees.
Any building with multiple units that share walls, ceilings and floors meets the criteria for a condominium. Buildings do not have to meet specified size requirements to be classified as condominiums. Though condominiums are associated with residential use, some are zoned for commercial use. Office condominiums are prevalent in some cities. The declaration of covenants, conditions, and restrictions governs the usage of the condominium units and the common areas.
For example, high-rise buildings with numerous apartments are condominiums. Smaller townhomes with only a few units may also be classified as condominiums. The classification of the building depends on whether the unit owners share ownership of the common areas.