When you buy a condo, what you actually own is the inside of the unit
itself; all unit owners own everything outside of their unit,
proportionately and collectively. For example, you as an owner of a
unit and all the other unit owners collectively own hallways, stairs,
pools, recreation centers, grass areas, etc.
Since all unit owners collectively own anything that is outside of the
individual units, all owners must provide funds to maintain these
common elements. In most communities, owners elect members from their
ranks to form a Condo Association, whose charter is to
establish a condo budget, collect condo fees from unit owners, manage the repair
and maintenance of common elements, and to oversee the affairs of the
community. Many Condo Associations hire Property Managers to undertake these functions, but the responsibility and accountability remains with the Condo Association.
The Condo Association is responsible for determining the amount
of money needed to manage the affairs of the community. In addition,
the Condo Association must maintain sufficient condo funds in reserve to address any
emergency costs and to prepare for larger maintenance projects that
occur less frequently (e.g. replace all roofs in the community). Based
on anticipated expenses and the need for reserve funds, the Condo Association sets the
amount of the monthly condo fee, which must be paid by all unit
owners. The Condo Association can also impose special HOA assessments on the owners if
unforeseen expenses are incurred.
Condos offer a variety of benefits to their owners. Condos tend to be
less expense than real estate owned by other methods, many communities
offer amenities such as pools and tennis courts, and there is no hassle
of personally maintaining a yard or others structures outside of your
unit. So if you like living next to many neighbors and want access to a
variety of amenities at an affordable price, then condominium ownership
may be a good option.
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