By: D. Scott Murphy – SRA
A better question regarding the image above is “is it Fee Simple ownership or Condominium ownership?”. The term townhouse is not an ownership type but an architectural style. It is no different than colonial, ranch, split level, etc. A townhouse is a multi-level unit attached to other units. Think of townhomes as single-family homes stitched together. They are almost
always on a very small lot, but not always. The term “town house” originated many years ago to refer to an in-town residence used by nobles for a small part of the year while there were in town for business or during the social season. Most owned large estates in the country on hundreds or thousands of acres. This type of structure allowed residents to be close to work or play without the need for transportation. These dwellings were terraced with as many as six or more floors, allowing for servant housing as well.
A similar type dwelling is the rowhouse. These are generally similar or identical townhomes built in long rows. These were typically not as elaborate and were built as more affordable housing for the middle and lower class.
Elements of both these styles exist in today’s housing and are found in urban and suburban areas. Depending on zoning, townhomes may be single-family or multi-family. For example, four attached townhomes on one lot would be considered a quadraplex. The quadraplex would be held in fee simple ownership by a single owner. The land under a townhome can vary from being just the footprint of the building to an unlimited sized lot.
Bringing our example back to a single-family townhome, the land can also be the footprint of the building or an unlimited sized lot. Typically, the lot is a narrow (the width of the townhome), rectangular lot, with a small front lot area and a small rear lot area. This is referred to as a PUD townhome. The exterior architectural style of townhomes can vary greatly from location to location.
When the townhome owner owns no land, the unit is then considered a condominium. Remember, condominium is a form of ownership – not a style. A condominium can take many different forms, including a detached single-family home, a townhome, or even a high-rise loft.
What is important is to differentiate style and ownership rights. When you look at either of the images above, there is no way to know the ownership type without consulting the deed. There are no visual clues which can tell you for certain what the ownership rights are for any property. I know of at least three neighborhoods of detached single-family homes in the Atlanta area that have condominium style ownership. This means that the owners of those homes only own the interior air space and not the structure or any specified piece of land. Instead, they own a divided interest of all the land and physical improvements. Condominium ownership is a form of fee simple ownership but it typically has significantly more restrictions.
Let’s consider the more typical single-family home subdivision in metro Atlanta. The owner owns all the structures and the land as described in the deed. They own the full bundle of rights which include air rights, riparian rights, mineral rights, etc. Another common single-family ownership is a home within a planned unit development (PUD). Very similar to fee-simple as described above but the owner agrees to a set of conditions and covenants, which if violated or not abided to may cause some loss of rights or financial consequences.
A condominium is essentially a property with multiple owners. The term originates from co or com meaning many and dominium meaning sovereigns. As a political term it is a political territory (state or border area) in or over which multiple sovereign powers formally agree to share equal dominium (in the sense of sovereignty) and exercise their rights jointly, without dividing it into “national” zones.(1) The International Space Station is a de facto space condominium, via a program of complex set of legal, political and financial agreements between all parties.(2)
1 https://en.wikipedia.org/wiki/Condominium_(international_law)
2 https://en.wikipedia.org/wiki/Condominium_(international_law)
In a real estate a condominium is an ownership which allows multiple owners to share land and improvements. It is often used in areas of high land values or constrained lot sizes. One way to identify a condominium is if units are stacked, it most likely is a condominium as it is not possible to own the full bundle of right (air rights, mineral rights, etc.). Condominium ownership is often used in apartment conversions, as apartment buildings can be converted to individual unit ownership through condominium ownership.
High-rise residential units are often called condos. Which is true as that is the form of ownership, but the term condo is not a style. The style is a garden unit, flat, loft, townhouse, etc. Like the uncertainty of the difference between the ownership right of a townhouse structure, the ownership right of a high-rise building can be apartment or condominium. The only way to know is to consult the deed.
Multiple listing services and county records alike contribute to the confusion over style and ownership type. Most county records in metro Atlanta, categorize attached units as condominiums. Most condominium townhomes show lot sizes when in fact they do not have a lot at all. Always remember to differentiate style from ownership type and reference the deed to determine ownership type. If you can’t determine the answer or still have questions, give us a call!