There is a lot of confusion about the differences between condos vs townhouses. They share many similarities, and this seems to be the source of this confusion. Even amongst real estate professionals we often hear more opinions than facts. If you are considering buying a condo or a townhouse, it is important for you to understand the different real estate terms.
So, let's start by clarifying, condominiums or condos are a type of real estate ownership. Whereas, a townhouse is an actual style of building.
A condominium is best described as “the concept of ownership of a single unit of air space within a multi-unit dwelling, along with co- ownership of any common amenities (recreation centers, pools, etc...) and common areas of the structures and land among all unit owners.”
Townhouses are generally attached structures of 2 or more stories with common walls. These are a version of the old "Brownstones or "Row Houses" made popular on the east coast.
Let's Review the Similarities:
Townhouse ownership means you own the structure along with any associated land. So the owner of a townhouse can have absolute ownership, like a single family home.
Here's where things get a little confusing. It is not unusual to have “condominium ownership” of a townhouse. In other words, the structure is a "townhouse" while the ownership is "condominium".
Let's Compare the Differences:
Ownership and common areas are the primary differences between condos and townhouses. You can actually have absolute ownership of a townhouse as well as the land (yard) associated with it. In a Condominium you only own the "air-space" inside of your particular unit.
The owners of a condominium development each own an equal share of the "General Common Elements". This includes the structural elements of the building roof, walls, halls, clubhouse, pool, etc...
In a townhouse community, any common elements are deeded to the Home Owners Association (HOA). The townhouse owners are a part of the HOA but don't own an interest in these elements.
"Limited Common Elements" are where we see a departure between townhomes and condos. Limited Common Elements are only seen in condo ownership. These are things that are intended for the use on the individual unit owners. Parking spaces, garages, balconies and patios are examples of Limited Common Elements. Although these are owned by all of the unit owners, they are limited to the use of specific owner/s.
In a townhouse, the balcony and garage are actually owned by the townhouse owner. The exception to this would be if a "townhouse" style home is owned as a "condominium".
Both condos and townhouses are what is known as "Common Interest Communities". A "Common Interest Community" is one where common real estate is maintained through assessments and dues.
Because of the Common Interest Community designation, we see a lot of confusion. The easiest way to remember the differences is this: A condominium is a form of real estate ownership and a townhouse is an architectural style.