Craig Franklin Chambers, Attorney at Law

October 31, 2013

What is the Difference between a Condo and a Townhome?

Littleton Real Estate Law and Denver Family Law Blog. (Vol 1.19) 

By Craig Franklin Chambers Esq. 7851 S. Elati Street #204, Littleton, CO 80120

The Littleton Lawyer.

As a Littleton, Lakewood, Highlands Ranch and Denver real estate law firm, specializing in divorce law and real estate law, and as a licensed Colorado real estate broker, I often help buyers and sellers in residential real estate and FSBO transactions.

One of the questions that often arises: what is the difference between a condominium and a townhome?

From a real estate purchaser's perspective, the distinction is easy. A condominium is stacked unit in a condo complex much like an apartment; a town home is an attached residential structure more like a single family house. Legally, the distinction is not so simple.

A condominium complex is created by the developer by recording the Condo's Bylaws, Declaration,  Condominium map, and Restrictive Covenants setting forth the condo complex's amenities, including limited common areas which are sold as individual condo units.

With a condominium, you own the airspace and the right to use the limited common area and in interest in the community. You do not own the land. The land beneath the condo and the exterior of the building is owned and maintained collectively through the monthly dues of the condo association, of which as a unit owner you are a member.

With a town home, you actually own the land and the building, however, your use  is restricted by the complex's restrictive covenants which are enforced by a homeowners' association. There is a difference between a town home and a condo in what you own and what the homeowner's association is required to maintain through its reserves, special assessments, and monthly dues.

Most attached residential structures that appear to be town homes are legally condos.  This is because the subdivision statutes, rules and regulations in Colorado are cost-prohibitive, making it time consuming and expensive to actually divide the ground which is being developed into individual separate town home lots.

Most developers would rather create a condominium complex with condos that look like what buyers perceive as town homes and avoid the subdivision process. The quick way to tell is to review the property's legal description which is available in the county clerk and recorder's records or from the title company if you are involved in a purchase.

If the legal description, states a Lot and Block  legal description, the property is a townhome; if  the legal description describes an interest in a condominium  project, it will state that in the legal.

A town home legal description would read something like: " Lot 1, Block 2, RE Blog Subdivision, 2nd Filing."

A condominium legal description would read: "Unit B, Building  6,  as per condo declaration, recorded at book___, page____  RE  Blog Condos East."

The distinction between  condo and town home is important because lenders make different requirements for condominiums and town homes, sometimes charging extra fees or higher mortgage insurance premiums for condos. It  is important when purchasing real property to understand who is responsible for the maintenance of the property and all other aspects of what you are buying.

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    Denver Real Estate and Family Law Attorney

    Licensed to practice law in Colorado since 1997, I have a B.A. from Vanderbilt University and a law degree from the University of Denver.

    7851 S. Elati St. #101 Littleton, CO. 80120

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