Condominiums and Cooperatives

An individual who purchases a unit in a condominium receives title to such unit in fee simple, owning it outright. The owner has all legal rights incident to ownership, including the right to sell, absent a RESTRICTIVE COVENANT limiting its use.

Title to a condominium also encompasses ownership of the land and common areas with the remaining unit owners. The individual owner has certain rights, such as use of the common areas, and certain obligations, such as paying his or her share of the expenses incurred for maintenance or improvements of the common areas, regardless of whether the individual owner approves of the upkeep or improvements. The size of the share of operating, maintaining, and improving costs of a building and common areas to be borne by an individual unit owner depends on the size of that owner's unit, usually measured by the number of rooms in the unit.

The three basic instruments used in the purchase of a condominium are a deed to the unit; a declaration of condominium; and the bylaws of the condominium association, the membership of which is comprised of the units' owners.

An individual buying a condominium receives a deed, which must be duly recorded in the appropriate county office. Such deed ordinarily describes the individual unit, the building in which the unit is located, and the property upon which the building is constructed. Generally it will also embody all limitations or restrictions imposed on the use of the unit and any other details agreed upon by the purchaser and

A 1997 condominium development near Denver, Colorado. The condominium as a form of ownership agreement has grown rapidly in popularity since the 1960s.
AP/WIDE WORLD PHOTOS

seller. The deed cannot contain any provision that is contrary to the rules of the condominium or declaration of condominium.

The declaration of condominium is the official record of the owner's rights and duties pursuant to receiving title to the condominium. It also states precisely what portions the owner of a unit owns and must maintain. State statute prescribes what must be included in the declaration of condominium. These requirements vary from one state to another, but a declaration of condominium must ordinarily contain the following: (a) a legal description of the land and buildings of the condominium, which is essentially the same information contained in the deed; (b) a description of each unit, including the address, size, number of rooms, and exact location within the building; (c) a description of the common areas and any restrictions upon the use thereof; (d) the pecuniary worth of each unit of the condominium and of the land under it, as well as the percentage of shares in the common areas assigned to each unit owner, usually based upon the number of rooms in his or her unit; (e) the number of votes assigned to each unit. The declaration of condominium must also state the procedure for making decisions concerning repairs, improvements, and similar costs, as well as provisions for amendment of the declaration or for ending the condominium arrangement. The number of votes assigned to each unit owner is in proportion to that owner's percentage share. A declaration must also provide the procedures for owners' payments of fees and other costs and sanctions imposed for failure to pay them.

Condominium unit owners must adhere to the regulations set forth in the bylaws. The bylaws of a condominium—the rules and regulations by which the condominium association governs itself—are generally drafted by the developers of the condominium or the original purchasers of the individual units.

The bylaws ordinarily establish procedures for electing the officers or board members of the condominium association, conducting meetings, and handling routine building maintenance and insurance for the common areas. They prescribe any restrictions that may be imposed on the sale of individual units and penalties for violation of the rules.

A condominium unit may be purchased for cash; however, the more common procedure is for a mortgage to be obtained to help finance it. Since each unit is owned individually, if an owner defaults on mortgage payments or property taxes, no other unit owner is liable.