There are several reasons that condominiums have been growing in popularity over the last few years in NJ. Many people prefer the security and sense of community that are associated with condominiums while others are drawn to this real estate purchase because of its cost effectiveness. An owner does have to perform minor maintenance on a condo, but they typically do not have the added responsibility of doing yard work. These are some of the main reasons that people purchase condos. When a condo is purchased it is a collective ownership. There are three different types of condo ownerships.
When a condo is purchased, the owner purchases the inside portions of the unit. All of the standard features of the dwelling such as electrical and plumbing systems are the owner’s property and responsibility to maintain. Sometimes they also own a parking space but everything else is considered to be the “common areas.” This common area is owned jointly with the neighbors and usually there are monthly fees that are acquired by an owner’s association which are used to maintain the area. The Home Owners Association creates a set of rules, bylaws, conditions and restrictions that pertain to the common areas. Owners are not usually allowed to make any changes to the exterior portions of their home. The condo building and the exterior portions of the property are typically maintained by a property management company and the condo owner pays a monthly condo fee.
A coop is set up very different from simply purchasing a condominium. The individual purchases shares in a corporation and then they lease the unit back out to the shareholder. Coops generally require a down payment from 30 to 50 percent; a condominium only requires a down payment of 20 percent or less. Coops are not as popular as purchasing a condominium since the return on investment (ROI) is quite a bit less. Coops are very popular in the eastern US including the NJ area. With a coop the owners are all partners in a partnership and they own shares of stock in the coop so all the partners own the entire building. This type of condominium offers less freedom for each individual “owner” with their own unit. For example, the unit cannot be rented out. Typically the corporation pays the taxed and they hold all the mortgages. Costs that are needed to operate the building are shared by all the shareholders.
Townhouses are usually designed as groups of homes all in a row. They are typically interconnected units that are linked all together horizontally and share walls in common. Ownership of town homes is collective and all management is done by an owner’s association. Fees are collected in order to keep the common areas maintained properly. Townhouses are normally one or two story buildings and each unit has its own entrance. These types of condos usually have an outdoor parking spot and there is an in suite laundry. The owner of a townhouse holds the title to their unit as well as the land it is sitting on. There are also some of the common areas that are owned jointly by all the owners of the townhouses.