On today’s docket:

CONDOMINIUM OWNERSHIP DEFINED

Whether you are a first time buyer, empty-nester looking to downsize, purchasing a vacation residence, or an investor diversifying a portfolio, condominium ownership can be a rewarding experience. But what do you get when you buy a condo? We’ll cover some of the nuts and bolts of condo ownership here.

Condo ownership is in essence a form of common ownership of real estate. Condominium ownership consists of two components: (a) exclusive ownership of a volume of space – the unit, and (b) ownership in common with all of the other unit owners of the common areas of the condominium property.

The component owned exclusively is the living space within the unit and is defined as the space falling within the finished surfaces of the walls, floors and ceiling of the perimeter. The condominium declaration (explained below) contains a surveyor’s depiction of the location and dimensions of each of the units. Each unit owner also owns a percentage share, assigned by the declaration, of the common areas (also known as common elements) of the property.

The common elements are generally defined as all areas of the property except the units, and can include the hallways, stairs, interior and exterior components of the buildings, grounds, recreation areas, clubhouses, parking and other amenities.

The unit owner is responsible for the maintenance and repair of the individual unit, and the association is responsible for maintenance and repair of all common areas.

CREATING A CONDOMINIUM PROPERTY

To create a condominium property a document called a declaration of condominium must be recorded with the Recorder of Deeds of the county where the property is located. The declaration does the following:

• Creates the condominium
• Defines the units and common areas
• Assigns the percentage ownership of each unit’s share of the common elements
• Sets forth the rights and obligations of the unit owners
• Establishes an association charged with the responsibility of management and maintenance of the common elements
• Provides for the payment of assessments by the unit owners for the maintenance of the common elements
• Provides for certain rights and remedies for the association relative to unit owners
• Provides rules for governance of the association.

FUNDING THE ASSOCIATION

Each unit owner is responsible for the payment of the unit’s proportionate share of the common expenses. This share is defined by the declaration as a percentage, with the total of all the unit percentages equaling 100%. The percentage is assigned by the developer based on the value of each unit relative to the other units. The common expenses vary from association to association based on the facilities and amenities. Each year an association budget is created by an association board of managers, and each unit is required to pay its percentage share of the budget, usually in monthly installments called assessments.

MANAGING THE ASSOCIATION

The association, usually a not-for-profit corporation, is governed by a board of managers selected by the unit owners. The board of managers determines the budget, arranges for necessary services, and is responsible for the maintenance and repair of the common elements. Regular meetings of the unit owners and the board of managers are held for the purpose of conducting the affairs of the association.

CONCLUSION

These are the basic principles of condominium ownership. The circumstances of each condominium project will vary. What may apply to a Colorado ski condo may differ from a Florida beach condo, and the circumstances of a Chicago high-rise will differ from a six unit graystone. The laws governing condominium properties will vary from jurisdiction to jurisdiction. Whatever the reason or location a condominium, despite recent economic events, over time, condominium ownership can be solid investment returning both financial dividends and enjoyment.

By Vytenis Lietuvninkas, Attorney at Law

4536 West 63rd Street, Chicago, Illinois 60629
Phone: (773) 284-0100
Fax: (773) 284-0395
E-mail: vytenis@1honestlawyer.com
Web: www.1honestlawyer.com

The preceding article is provided as a complimentary service to OwnACondo.com for general informational purposes only. It is not intended to provide a comprehensive guide to the subject discussed. The descriptions, terms and definitions contained within are solely the responsibility of the author. Contributors to this regular feature include various Chicago-area attorneys. No legal suggestions or guidance are intended, nor should they be implied. Be sure to contact a legal professional of your choice for more information and/or to discuss details of your specific situation.