Difference Between Condos and Townhouses

Several home ownership opportunities exist outside of a typical single family home.

Ownership

The form of ownership legally determines whether a multi-level attached house is a condo or a singly owned townhouse.The form of ownership legally determines whether a multi-level attached house is a condo or a singly owned townhouse.
Condos and townhouses, which are especially popular in urban areas, are just two of the options buyers might consider. However, there is a significant difference in the form of ownership available for condos and townhouses that buyers should be aware of before purchasing. A **townhouse** is a tall, narrow building with at least three floors that is most often attached to its neighbors but could have a small space between outside walls. A **condo** could be a one- or multi-level apartment or a townhouse.

How much of the property you actually own is the biggest differentiator between condos and townhouses that are singly owned or in a co-op.

With condos, homeowners maintain ownership of just the inside of their home. However, the exterior of the building, the common areas and all of the land are jointly owned by all of the condo owners. Each condo owner belongs to an owners' association, which manages the maintenance of the complex and the common areas.

In contrast, with a singly owned townhouse purchase, the homeowners also own the exterior of their building, as well as the land that their townhouse sits on. This means that the owners are responsible for the maintenance of the exterior of their unit, as well as the surrounding land.

Contracts

Buyers should pay close attention to their individual contract when buying a townhouse or condo because significant variances can occur.

Legally, a townhouse can be owned as a condo if it is specifically described that way in the contract. This means that the buyer would be responsible for only the interior of the unit and have no ownership of the land or responsibility for the exterior maintenance of the building, which would be handled in the same way as any other condo development.

Additionally, townhouses can be owned as part of a co-op. A co-op owner, also commonly referred to as a shareholder, does not actually own their individual unit. Instead, the co-op association, which typically consists of all of the shareholders, owns the entire building. This includes all of the units in the development. Co-op owners either hold shares in the association or have a proprietary lease, which describes the rights and duties of the owner, and the obligations of the association.

Amenities

A major benefit of condo living is the vast array of amenities that many complexes offer. Many condo developments provide such luxuries as gyms, swimming pools and large party and recreation rooms.

In cases where townhouses are singly owned, they don't offer a great variety of amenities. Some do offer minor services such as waste pickup and lawn care, but owners shouldn't anticipate a huge assortment of conveniences.

Fees

Directly related to the type of ownership and amount of amenities are the fees condo and townhouse owners must pay.

*Condo owners generally pay higher fees. Because the exterior of the building and the outdoor areas are owned by the association, the fees are used to cover the maintenance of the unit. If the building needs a new roof or there's a problem with the building's siding, the fees are used to resolve these issues. Additionally, fees contribute to the maintenance of all of the amenities and shared spaces.

Townhouse owners that are not part of a condo development generally pay lower fees. However, they are personally responsible for any maintenance or repairs needed for the outside of their unit.

About the Author

Kat Kuehl has a Bachelor of Arts in communication and a minor in journalism, advertising and media studies from the University of Wisconsin-Milwaukee. As a crafty DIY-er and a home renovation addict, she has been published in both regional publications and national websites, including Women Magazine and her own personal lifestyle blog.