When
you own a condo it's typically, but not necessarily, in a building with
other units. With condo ownership everyone shares in the ownership of
the common areas equally or based on some predefined formula. The
common areas, for example, include the structure (floors, walls,
ceiling...etc) of your particular unit/building, club house and pool if
any, and any other structures like a boardwalk over the dunes to the
beach!All owners of a condo are members of the condo association and pay a condo fee. The fee typically includes monies for repair and maintenance,
reserves for major capital expenditures, structural insurances, and
liability insurance for the common areas. It is easier to define the
common areas by defining what is not - the interior walls of each
individual unit and everything within, in general.
The
condo owner will need to buy a condo insurance policy. This is
very similar, but exactly the same, as apartment renter's policies. The
cost for these is typically very low especially when comopared to a
homeowner's policy. When comparing monthly costs be sure include the
cost for insurance plus the condo fee. The primary reason for
the lower cost is that the building structure insurance is part of the
condo fee as it is common property.
Homeowner's Association (HOA) is a corporation formed to manage a group of single family homes. HOA fees
are levied to run the corporation and pay for items like common area
maintenance, capital maintenance (e.g. club house or pool), capital
replacement items (e.g. new roof), new capital projects, and insurance.
These feescan include the exterior maintenance of lawns and landscaped areas.
HOA fees typically are lower than condo fees but be sure to include the cost of insurance when determining your monthly cash flow.
Learn More About HOA Insurance
