By: Sanya Kaushik
Condominiums are all the rage in the real estate industry right now. A largely Western concept up until a few years ago, condo living is no longer the new kid on the block; in fact, a lot of contemporary Indian home owners have started demanding more and more condo complexes. This demand has opened up a massive window of opportunity for real estate developers across the board- the low cost of development coupled with the high sale value makes condos the idyllic golden goose.
So, WHAT exactly is a condo?
A condo is a housing tenure and/or other real estate property in which a specific part of the property is individually owned. Use of and access to all common facilities is defined by legal rights associated with the ownership. The rights of each individual unit are managed and controlled by the association of home owners that jointly own the entire property.
The difference between a condominium and apartment complex is categorically legal. You cannot tell by simply looking at a structure that it’s a condo or an apartment building. The difference between the two lies in the nature of ownership; a condo is sold in different units to different owners, while apartments are rented to different tenants by the developer who maintains ownership.
OWNERSHIP of a Condominium
Ownership of a condo unit is defined as the ownership of the space contoured by the walls of the home. The owned space is specified in a legal document known as a Declaration, which is filed with a local governing authority.
The common areas, like the passage ways, elevators, exterior areas etc, have shared ownership that is held in trust by a corporate body created at the time of construction of the condo. This association only holds the area on behalf of the residents; they may not have ownership per se.
LEGAL ASPECT of a Condominium
There a number of legal documents that dictate the terms of sharing a condominium space. Condos have covenants, conditions, restrictions and additional rules that you will have to agree to and follow.
Homeowners Association
An HOA comprises of unit owners that manage the condominium through a Board of Directors elected by the membership. The HOA ensures that all the systems (heating, water, electric etc) of the condo are functioning smoothly and efficiently. It also decides how much each owner should pay for the maintenance of the complex, and has the legal authority to ask for and collect the same.
The name of the HOA changes with jurisdiction. In different areas, it goes by different names such as “sectional title”, “commonhold”, “condominium owners’ association” etc.
Condos used for non-residential purposes
The non-residential use of condos isn’t all that common. However, you should know that you can use a condo as an office, retail shop, hotel room, group housing and storage, if your need should so dictate. This particular benefit proves to be quite advantageous for Non-profit organizations because it basically leads to a lower tax liability.
If you’re planning on buying a condo, you should definitely dig deeper into this new concept, and find out why you should or shouldn’t buy a condominium.
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