Condo and Townhome Glossary

 Airspace:  That space in a condominium complex, which belongs to a unit owner. It is the area contained in a unit from floor-to-ceiling and wall-to-wall, measured from “paint-to-paint”, not allowing for thickness of walls, etc. The walls, which divide one unit from another, are “common elements”.

Amenities:  The grounds of a Condo or Townhome development may include such attractions as a swimming pool, spa, tennis courts, clubhouse, etc.

Architectural Controls:  Rules governing the exterior appearance of the complex.  Owners may be required to keep window coverings uniform, and keep only certain approved furnishings on balconies and patios. 

Articles of Incorporation:  Part of the package of documents which must be provided to ever purchaser of a Condo or Townhome.

Board of Directors:  Persons elected by owners in the development to govern the affairs of the development.  An association Board of Directors will usually include a President, a Treasure, a Secretary, and two members at large.

Budget:  Financial document presented for approval at the annual homeowners association meeting, which outlines the estimated expenditures and income for the upcoming year.  It also includes balance sheet information including the size of the reserve fund.  You should have read this document before buying a condo or townhome.

By-laws:  A document which explains how the affairs of the condominium complex shall be run. This is part of the package of documents which must be provided to every purchaser of a Condo or Townhome.

Common Areas:  Those parts of the complex, which are owned by all unit owners together in undivided portions.  Included would be all the elements of the building itself except for the airspace in each condo, the amenities, grounds, etc.

Complex:  A condominium or townhome community.

Condominium:  A unit comprised of airspace in a multi-family complex.

Condominium Ownership:  A fee simple interest in a particular unit plus an undivided interest in the common elements of a complex.

Development:  A complex or project comprised of Condominiums or Townhomes.

HOA: Abbreviation for Homeowners Association.

HOA Fees:  Sum of money payable by an owner, usually monthly, which represents a unit’s pro-rated share of common expenses.

Homeowners Association:  An association comprised of owners of every unit in a condominium or townhome complex.  With the purchase of a Condo or Townhome the new owner automatically becomes a member of the homeowners association with the right to vote on all matters regarding the complex.

Master Insurance Policy:  An insurance policy taken out on behalf of the homeowners association to insure all the common elements of the complex.

Planned Unit Development (PUD):  A community consisting of individually-owned homes and lots, surrounded by land for the common use of all owners.  The land and recreation facilities (if any) belong to an association whose membership is comprised of all owners of the homes and lots.  Membership is mandatory; each owner is obligated to pay a pro-rata share of the maintenance of the association’s property.

Property Management Company:  An independent real estate company appointed by the homeowners association to operate its business.  Its functions may include collection of homeowners’ monthly dues and special assessments, bookkeeping, payment of expenses, maintenance, repairs, etc.

Reserves:  Funds set aside for the use when a large common expense arises.

Restrictions:  Regulations pertaining to a particular complex which disallow certain factors or use, i.e. pets, persons who have not reached a stated age, etc.

Rules and Regulations:  List of policies which govern day-to-day living in a complex.  Some may be reprinted from the by-laws, others are established by the HOA board.  They cover subjects such as parking, noise control, hours and use of recreational facilities, etc.

Special Assessment:  When a costly repair or improvement to the complex is to be made, the funds collected in the monthly homeowners dues (or held in the Reserve Fund) may be insufficient to cover the expense.  To acquire the necessary money, each owner receives a special bill for a pro-rata share of the cost.

Townhouse (or Townhome):  A condominium unit of one or more stories in height which may be free-standing but is usually attached to one or two neighboring units by common walls.  Often the owner of this unit owns the land on which it stands and its roof.

Undivided interest:  The right of ownership in the common elements of a condominium or townhome complex which is equally shared by all unit owners.  This interest cannot be separated and conveyed by any one of them.

Unit:  That portion of a complex comprised of airspace which is owned in fee simple by the individual(s) named on the deed.

Voting Rights:  The right of the owner of a condo or townhome to vote on certain matters concerning the affairs of the homeowners association.