Ch5. Condominium Ownership — Unit Deeds, Common Areas & HOA

Condominium Basics

Condominium (Condo):
A form of property ownership where individuals own
separate units within a multi-unit building
Examples: apartment-style condos, townhomes, commercial condos

Governing law:
State Condominium Acts (every state has one)
Federal: FHA/HUD guidelines for financing approval

Unit ownership:
Owner holds fee simple title to the individual unit
Described in a recorded unit deed

Common elements:
All areas shared by unit owners
Hallways, lobbies, elevators, roof, structural walls,
parking structures, recreational amenities

Limited common elements:
Shared but assigned to specific units
Balconies, assigned parking spaces, storage units

Condo Title & Deed Structure

Condominium plat / declaration:
Recorded document that legally creates the condominium
Describes unit boundaries, common elements, limited
common elements, and ownership percentages

Unit deed:
Each unit has its own deed recorded at the county recorder
Contains legal description referencing the condo plat

Percentage of ownership interest:
Each unit's share of the common elements and expenses
Proportional to unit size or as defined in declaration

Unit deed conveyance:
Selling a condo unit = recording a new unit deed
Automatically transfers percentage interest in common elements
Mortgage / deed of trust recorded against the unit separately

Undivided Interest in Common Elements

Common elements:
Owned collectively by all unit owners as tenants in common
Cannot be sold separately from the unit

HOA's role:
Manages, maintains, and insures common elements
Collects assessments from unit owners to fund operations

Prohibition on separate sale:
Unit owner cannot sell their share of common elements
independently from the unit itself

Undisclosed liens on common elements:
HOA assessments can become a lien on individual units
Unpaid special assessments run with the unit at sale
→ Title search must include HOA lien search

HOA Governance & Owner Rights

Homeowners Association (HOA):
Mandatory membership for all unit owners
Governed by Board of Directors elected by owners

Governing documents:
Declaration of Covenants, Conditions & Restrictions (CC&Rs)
Bylaws: operational rules for the HOA
Rules and Regulations: day-to-day conduct

Assessments:
Regular (monthly/annual): covers maintenance and reserves
Special assessments: one-time charges for major repairs

Owner voting rights:
Each unit typically has one vote (or weighted by interest)
Major decisions require supermajority (often 2/3 or 3/4)

Resale disclosure package:
Sellers must provide buyer with HOA documents, financials,
meeting minutes, and pending litigation disclosures

Unit = Fee Simple + Undivided Interest ★★★★★ : Owning a condo means owning the unit in fee simple AND an undivided percentage interest in all common elements. Both transfer together. Memory hook: Unit deed = unit + common element share

CC&Rs Run with the Land ★★★★★ : Restrictions recorded in the CC&Rs bind every future owner of every unit — not just the original buyer. Memory hook: CC&Rs = permanent rules for the property

Special Assessment Disclosure ★★★★☆ : Sellers must disclose pending or approved special assessments before closing. Undisclosed assessments can become buyer’s liability. Memory hook: Special assessment = disclose before closing

Practice Quiz

Q. Why does a condo buyer automatically acquire a share of the common elements without a separate contract?

The condominium declaration legally ties each unit’s ownership to a defined percentage interest in the common elements. When the unit deed is transferred, state law and the declaration require that the common element interest transfer with it — they cannot be separated. The buyer therefore acquires both the unit and the proportional common element share in a single transaction, just as the seller held them.

Q. What are a condo buyer’s rights when an HOA board makes a major decision the buyer disagrees with?

Major structural changes, amendments to CC&Rs, or large special assessments typically require approval by a supermajority of unit owners (often 2/3 or 3/4 depending on the governing documents). Individual owners can attend board meetings, vote at annual meetings, run for the board, and challenge improper board actions in court. State condo acts also provide statutory owner protections and remedies for board overreach.