One of the most important decisions a potential homeowner will make is deciding what kind of home to buy. If a stand-alone single family home is not in your budget, or you prefer less responsibility, you’re likely going to find yourself facing the condo vs. townhouse decision. There are quite a few similarities and differences between the two, and each comes with a unique set of responsibilities, from both the owner and the Homeowner’s Association (HOA).
A condominium is a form of ownership of a unit. A condo is one unit in a larger building where you own your unit and typically pay a condo association fee for the building. The association pays for the maintenance and running of public areas which include hallways, parking lots, workout facilities and pool areas. While you do not own the public areas, you have full access to them. You can’t make any changes to these areas. Since you own the actual unit, however, you are free to paint and do some renovations as you wish inside the walls. Major renovations may require approval by the condo association.
Townhomes are different because you own both the outside structure, the land it sits on, and the inside unit. A townhome may have similar features to a freestanding home, such as a porch or garage, and usually has at least one shared wall with a neighbor. Townhome owners are sometimes responsible for the upkeep of the yard and landscaping that come with the property. Some townhome communities have public areas such as a pool or workout facilities that are shared by the community. Like a condo, those are public spaces maintained by the association, and you do not own them.
When you purchase a condo or townhouse, you are required to pay monthly fees into the Homeowner’s Association. The HOA handles the day-to-day maintenance of the shared spaces. In a condo, the HOA manages the building, its grounds, and its interior public spaces. In a townhouse community, the HOA manages common areas, which includes general grounds and, in some cases, roofs and exteriors of the structures. In addition to overseeing shared property maintenance, the HOA also establishes rules for all residents. These may include rules about renting out your home, noise, and what you can do with your land (for example, some townhome HOAs prohibit you from having a shed on your property, even though you own your yard).
Figuring out your own answer to the condo vs. townhouse debate comes down to measuring the differences between the two and determining which one is the best fit for your family, your budget, and your future plans. When evaluating the role of the HOA in each, keep in mind that your own personal influence can help make a community successful. Whether you serve on the board, are a vocal and well-informed HOA voter, or at the most basic level, read and consider your contracts carefully and understand all obligations.