There are three types of multi-unit home ownership:
Fee Simple Home: This type of home is a free standing dwelling that is owned entirely by an individual or a household, without a shared interest from a neighbor in an adjoining or neighboring unit. These homes may include townhouse style buildings where units are attached and there is a “zero” lot line. Often the exterior maintenance of the housing and lot is the responsibility of the owner, and not the common homeowner’s association. However, there may be some common areas, such as roads, in a development that are maintained by a homeowner’s association.
Condominium (Condo): A condominium is a form of home ownership in which each dwelling unit is separately owned but there are common areas within the development such as hallways, parking lots, roads and/or shared recreational amenities that are owned jointly by all owners together. The building style of a condo may be single or multi-story building(s) or multiple attached or unattached townhouse units. In some cases, the shell of the building, including the roof and exterior walls is owned commonly - the unit owner simply owns and maintains the interior of the unit. Condominiums frequently levy monthly “common charges” to each owner to help pay for the maintenance of the commonly owned areas.
Condominiums administer their properties through boards and/or associations with members being elected from all owners, and can also be assisted by a management company. Rules and regulations governing the condominiums are established by the rules of the development’s incorporation and may be modified by these boards.
Cooperative (Co-op): A cooperative is a form of home ownership in which the occupants own shares in the entire property and possess the right to occupy their unit and sell it whenever they choose. Monthly “common charges” or “maintenance charges” are often levied.
Co-ops administer their properties through boards and/or associations with members being elected from all owners, and can also be assisted by a management company. Rules and regulations governing the condominiums are established by the rules of the development’s incorporation and may be modified by these boards.
Co-op Rentals: Some co-op Bylaws assign owners the right to rent their units. The tenants of these units pay rent to the owner of the co-op.
A Practical Guide for Cooperative Success, published by Northcountry Cooperative Foundation, is a guide designed for use by co-op boards of directors and its residents. It defines what a cooperative is, explains how co-ops are managed and governed, explores what co-op members can do to recognize and weed out problems and provides guidelines to promote the best elements of cooperative living.
Boards, Bylaws and Rules: Understanding & Dealing With a Co-op Board of Directors Office is a brochure which addresses the role of the co-op board of directors and what to do if the board is not complying with the co-op’s Bylaws. “How to Handle Problems with a Co-ops Board of Directors” (link to: FAQ Handling Problems with Bd of Dir.pdf) answers frequently asked questions on handling problems with Board of Directors. Both are published by the NYS Attorney General’s Real Estate Finance Bureau.
Homeowners’ associations (HOA)
A homeowners’ association is an organization established to govern a private multi-unit housing community. Typically, it owns and manages some common property for the owners of the private houses, fee-simple, condominium or cooperative units. Once a home or lot is purchased the owner automatically becomes a member of the homeowners association.
The primary purpose of the association is to protect and preserve the value of the privately and commonly used property. In addition, the association may have the responsibility to repair and maintain portions of the community, such as roads, roofs, exterior walls and recreational facilities.
The Web site for the New York State Attorney General’s Office provides detailed information on how to handle problems with a homeowners association.
The content of the offering plan governs the sponsor’s obligation regarding the size and construction of the units and recreational facilities. It is very important to read and understand what is included in an offering plan. Salespersons may make exaggerated statements about the recreational facilities or residential amenities in the unit, however if the statements are not stipulated in the offering plan, their claims are not required to be delivered and probably will not be.
Anyone who purchases a home that is part of a condominium or homeowners association should receive and review a copy of the offering plan for units included in the plan. Buyers should carefully read the “Description of Property” section to determine the sponsor’s obligations and should not rely on advertising brochures, verbal statements from sales staff or glossy photos and architect’s renderings.
The Web site of the New York State Attorney General's Office offers additional information on home ownership.
Determining if a Home’s Purchase Price is Affordable
There are many factors to consider such as:
- Monthly income
- Amount of dollars in savings accounts
- Credit ratings
- Debts - such as credit card, education or car loans
In the Homebuyer Counseling section, several not-for-profit housing organizations that can assist are listed.
The Web site for the U. S. Department of Housing and Urban Development has an informative section on buying a home. This site will link you to a simple and easy to use calculator that can assess how much you can afford for a home purchase.
Types of Housing Structures
Single family detached: A free-standing residential building. Most single-family homes are built on lots larger than the structure itself.
Multi-family residential: Multi-family is a classification of housing where multiple separate housing units are contained within one building or housing development. The most common form is an apartment building or a townhouse development. Residents in these units may rent from the owner, or own the fee-simple, condominium or co-op housing.
Townhouse units: Townhouse units are designed to mimic detached or semi-detached homes. The distinction between multi-family dwellings called “apartments”, which can be a co-op or a condo, is that townhouses usually consist of multiple floors, have their own outside entrance, and may have a private yard or terrace and usually are part of a multi-unit development. A townhome is usually purchased as a single unit that is attached to other unit(s) owned by other homeowners.
In “condominium townhouses”, the purchaser owns only the interior, while the building and recreational common areas are owned by a condominium corporation. The corporation is jointly owned by all the owners, and charges fees for general maintenance and major repairs.
“Fee-simple townhouses” are exclusively owned, without any condominium monthly fees and share common walls with other owners and neighbors.
“Stacked townhouses” have multiple units vertically (typically two), usually with its own private entrance from the street.
Duplex house: A duplex house is a semi-detached two-unit apartment building or condominium usually indistinguishable from a normal house on the exterior. The building consists of pairs of houses built side by side as units sharing a wall and usually in such a way that each house’s layout is a mirror image of its twin. Duplex can also refer to three and four unit buildings, sometimes called, respectively, triplex and fourplex.