When looking to purchase a townhouse, you probably want to ask “is that townhouse actually a condo?” The ownership is an important point for many factors, including the owners’ rights and responsibilities.
Real estate ownership type and architectural styles of homes are not necessarily connected, and this confuses a lot of Los Gatos home buyers. We tend to think of condos as apartments that people own, for instance. It’s not that simple.
Finding out: how to know is that townhouse actually a condo
With condominium ownership, you own the inside of your unit plus a share or percentage of all the common areas (think private roads, pool, etc.).
With a condo you do not personally own the land under your unit. This can come in the form of what looks like an apartment (with other units above, below, on the sides or perhaps back-to-back), a townhouse (think “row house”), at attached house (duet), or even a free standing, detached house. Any of those can be a condo in the ownership sense.
If you look at a home, how can you tell the type of ownership? It’s seldom possible to know without looking at the Preliminary Title Report. It may be possible, buried elsewhere in the HOA docs, to learn the ownership type, but the fastest and clearest way is to read the Prelim. If you are planning on buying a home in a Common Interest Development (CID), especially if it is a townhome, read the prelim to learn is the townhouse actually a condo or not.
If you read a preliminary title report, it may say something like this, reflecting a share of ownership of the common areas:
1. THE ESTATE OR INTEREST IN THE LAND HEREINAFTER DESCRIBED OR REFERRED TO COVERED BY THIS REPORT IS:
A CONDOMINIUM, as defined in Sections 783 and 4125 of the California Civil Code, in fee
If it is instead it’s another type of ownership in which the property owner does own both the structure and the land beneath it, the preliminary title report will say something like this:
1. THE ESTATE OR INTEREST IN THE LAND HEREINAFTER DESCRIBED OR REFERRED TO COVERED BY THIS REPORT IS: A FEE as to Parcel(s) One; AN EASEMENT more fully described below as to Parcel(s) Two (the easement only if applicable, as with a townhouse community)
There are many reasons why it does matter which type of ownership you have.
Let’s say you have a house that’s in condo ownership and you want to add on into the back yard. It might be a little more complicated if you do not own that land to begin with! Going further, some condo associations have severe architectural requirements. We have seen some that demand that the home owner obtain permission before changing a light fixture inside the unit! (Outside is common since everyone else has to look at it, and the HOA wants it to match or at least to not clash.)
With PUDs, the HOA or condo association will want to provide permission before major remodels, especially if they involve removing or opening up any walls. They have to care because if a load bearing wall’s job is not accounted for, it could cause collapse of the unit in question and maybe others, too. As a general rule, with PUDs, the townhouse owners appear to have more freedom as to how the update the interior of their unit.
In some lending situations, it can matter also. Townhomes that are PUDs are treated like single family homes by lenders. That is not the case with condos, which often require that the entire complex be approved.
How often do we run into houses that are condos? Not too frequently, but if you have ever admired the pretty houses on Ohlone Court over by Vasona Lake County Park, you’ve seen some! In Almaden, there’s a beatuful gated community called the Villas of Almaden – same thing: houses are condos.
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