Real Estate Ownership Condominium Or Fee Simple

Real Estate Ownership Condominium Or Fee Simple



Real Estate Ownership - Condominium or​ Fee Simple
Generally, apartment-style buildings are called condos, two-story row houses are known as​ town homes, and​ free-standing homes on small lots are referred to​ as​ garden homes .​
Unfortunately, this description creates some confusion about real estate ownership .​
Apartment, town home, and​ garden home describe the​ design or​ construction of​ certain homes .​
the​ word condominium does not refer to​ a​ the​ layout or​ style of​ a​ building .​
Condominium is​ a​ form of​ ownership of​ real estate .​
the​ form of​ ownership of​ real estate cannot be recognized by observing the​ building design .​

Condominium Regime

The legal definition of​ condominium is: the​ absolute ownership of​ a​ unit based on a​ legal description of​ the​ airspace the​ unit actually occupies, plus an​ undivided interest in​ the​ ownership of​ the​ common elements, which are owned jointly with the​ other condominium unit owners .​
Each unit owner of​ a​ condominium has individual title to​ the​ space inside his unit .​
the​ space is​ sometimes described as​ beginning with the​ paint on the​ walls .​
In addition, each unit owner has an​ undivided interest in​ the​ physical components of​ the​ condominium buildings and​ land .​

A popular type of​ condominium development is​ the​ multi-story apartment .​
In this case, there is​ no land under each unit .​
In these developments, the​ condo association usually handles maintenance of​ the​ building exterior and​ common grounds, while the​ unit owners maintain the​ interiors of​ their units .​
a​ condominium association is​ selected to​ make decisions about expenditures for​ repairs, and​ to​ handle administrative work related to​ the​ common areas .​
Fees are collected from the​ unit owners to​ pay for​ common maintenance .​
the​ association normally holds an​ insurance policy covering the​ jointly-owned areas, while individual owners carry insurance for​ the​ interior components of​ their units.

Condo projects may resemble duplexes, town homes, garden homes, or​ residences on regular lots .​
In general, the​ creation of​ a​ condo regime allows the​ developer to​ get more density approved than would be allowed if​ he had done single-ownership lots .​
This is​ often the​ reason why the​ condo regime is​ chosen instead of​ a​ development with single ownership lots .​
a​ condominium may be built as​ two units of​ a​ duplex .​
In this case, the​ two owners may jointly make decisions concerning maintenance of​ any common areas .​
By setting up the​ units of​ a​ duplex as​ two condos, the​ owner is​ able to​ sell them to​ two different owners .​
Each condominium has rules that are specific to​ the​ development, so no assumptions should be made about their requirements .​
It is​ important to​ read the​ condominium documents carefully before purchasing a​ condo .​
the​ documents specify the​ maintenance that is​ covered by the​ common budget .​
In one project, the​ association may handle exterior components, decks, pools, sidewalks and​ driveways .​
In another, the​ individual owners may be responsible for​ more maintenance of​ their units, including foundations, roofs, and​ exterior walls .​

If you have questions about the​ division of​ labor between the​ common budget and​ the​ individual owners of​ a​ condominium, you can present your question to​ the​ condo board itself .​
the​ board can give you an​ interpretation of​ the​ rules and​ clarify how the​ issue has been handled in​ the​ past .​
Another possibility is​ to​ ask a​ real estate attorney to​ review the​ documents for​ you .​
Realtors, other unit owners, or​ maintenance workers are not appropriate or​ reliable sources for​ the​ interpretation of​ condo documents .​

The Texas real estate contract for​ condominiums contains a​ provision requiring that the​ buyer be given a​ copy of​ the​ condo documents, with a​ period of​ time to​ review them .​
During the​ document-review period, the​ buyer may terminate the​ contract without penalty .​
In addition, a​ resale certificate is​ must be provided by the​ association president or​ manager .​
This document provides information on the​ current budgets, insurance coverage, special assessments, lawsuits and​ other matters that affect the​ association .​

Fee Simple Ownership
In contrast to​ the​ condominium regime, you may own real estate by fee simple .​
Fee, which comes from the​ word, fiefdom, refers to​ legal rights in​ land, and​ simple means unconstrained .​
Fee simple is​ the​ most common type of​ ownership .​
It is​ the​ absolute legal title to​ real property, including both buildings and​ land .​
In fee simple, there are several different possibilities with regard to​ your obligations of​ ownership:
(a) Your property may not be in​ a​ subdivision at​ all .​
In this case, your deed will not include any subdivision restrictions that control your use of​ the​ property .​
Be aware that there could be some deed restrictions put in​ place by previous owners .​
In addition to​ deed restrictions, you may be governed by city or​ county ordinances or​ zoning laws that limit your use of​ the​ property .​
(b) Your property may be in​ a​ subdivision with very few restrictions, no common areas, no architectural control committee, and​ no mandatory dues .​
Usually these are older subdivisions .​

(c) Your property may be in​ a​ subdivision of​ homes on large lots, or​ in​ a​ town home or​ garden-home community in​ which there is​ a​ legally created homeowners association .​
In this case, every homeowner is​ required to​ be a​ member of​ the​ association .​
the​ association may charge mandatory dues and​ enforce subdivision rules .​
a​ certain level of​ maintenance may be required of​ each property owner .​
for​ example, you may need association approval of​ exterior paint colors, fences, or​ additions to​ your home .​

Like the​ condominium form of​ ownership, fee simple ownership does not prescribe how maintenance is​ handled or​ how developments are governed .​
for​ example, the​ owners of​ a​ town house, with fee simple ownership, may be required to​ fully maintain their units .​
Or, the​ owners' association may cover painting, roofing and​ yard work for​ the​ owners .​
In subdivisions where there are single family homes on large lots, it​ is​ more common for​ the​ homeowners association to​ manage the​ common grounds, pools and​ parks, while the​ individual lot owners fully maintain their own properties .​


Understand your ownership rights and​ obligations
Before buying into a​ condominium regime or​ purchasing a​ fee simple property, you should have a​ clear understanding of​ the​ type of​ ownership you will have in​ your property .​
if​ you are buying a​ condominium, it​ would be wise to​ read the​ condo documents carefully and​ understand how maintenance is​ divided between the​ individual owners and​ the​ condominium association .​

If your ownership is​ fee simple, with individual ownership of​ the​ land, you should review the​ deed restrictions (if there are any) and​ understand the​ restrictions and​ obligations that apply to​ your property .​
In the​ fee simple form of​ ownership, there may be mandatory dues to​ pay for​ common area maintenance, or, in​ some cases, the​ dues may be used for​ partial maintenance of​ the​ individual properties .​

If you have a​ question about your type of​ ownership or​ about your obligations as​ a​ homeowner, it​ would be wise to​ review the​ title documents with a​ real estate attorney before proceeding with your purchase .​
Ask plenty of​ questions! a​ clear understanding of​ your type of​ ownership, and​ of​ your obligations as​ a​ homeowner will result in​ a​ more satisfying real estate purchase.




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