Condo or Townhouse?
There are a basic differences in the two types of home ownership stated above…let’s see what is best for you.
Townhouse/home definition
Townhouse/Townhome means a single-family dwelling in a row of at least three attached units, but no more than 7, whereby each unit has its own front and rear access to the outside. No unit shall be located over another unit and each unit shall be separated from other units by one or more vertical common firewalls. The owner is responsible for payment of all maintenance and repairs of the property.
If you buy a townhouse, you’ll own the interior and exterior of the unit and the land on which it sits. Upkeep of the exterior could be split between you and the HOA, if ones exists.
Condo definition
Condominium means a common interest community in partially owned separately (the living unit) , the rest is common ownership. The common area can only be owned by those who own the separate portions.
A common interest community is not a condominium unless the undivided interests in the common elements (pool, entry, landscaping, gate, park, clubhouse, etc.) are vested in the unit owners who pay homeowners association (HOA) dues to support those shared assets.
If you buy a condo, you’ll own your interior space only.
The differences
Structure
A townhouse will share at least one wall with a property next door-but will not have another sit on top of it.
A condo could have another unit below and above it, in addition to neighbors on either side. That could mean sharing all surrounding walls and floors/ceilings.
Practical Ownership
Townhome: Owner owns the land and the structure. This allows the owner to do as they wish with the lot or the home’s exterior.
Condos: the owner owns the interior of the unit and an interest in the common assets of the condominium project. All other owners have an equal share, so any changes come through the HOA CC&Rs.
Homeowners Associations
Some townhouse communities have an HOA for common areas such as driveways, entries, etc. Since the owner owns the land and is required to take care of their own repairs, the fees are lower.
Condos: The areas of common interest are regulated by an HOA. While there is a board of director from the residents, most HOAs have regulations that lay out the requirements of a larger vote required for the macro plan like changes in HOA fees or penalties, architectural changes and special assessments for larger repairs.
The HOA also enforces its covenants, conditions, and restrictions (CC&Rs).
Knowing the health of the management company handling the administration of collecting the fees and paying the approved bills is important. Making sure the annual financials are obtainable and up to date is an important early step in the process of buying into an HOA based community.
Obligations and Regulations
Townhome owners may not have an HOA-so they are free to paint their home purple if they are Prince fans.
Condo owners will be required to meet all HOA standards. That could dictate anything from what residents want to hang on their doors to whether they can have pets, how many, and size, renovations, colors of paint for their exteriors, etc..
Insurance
Condos have their own form of property insurance. The homeowner’s policy covers the interior of a condo and the owner’s personal belongings. The HOA policy covers the building, roof-any common interest area.
Townhouses work much like a single family home if there is no HOA.
Lending
Lenders of conventional loans will review the financial health of an HOA as its efficiency affects the value of the property, more so with a Condo. (The FHA and VA have lists of approved commonly owned properties.)
The value of the land is taken into consideration with a Townhouse, so there will be a lot more variety in loans available…like for a single family home.