Home Owners Association or Condo Association?
There are two main types of associations, a condominium association and a homeowners association. Although they do share some common features, they are considerably different on numerous key factors making it extremely important to “know your association.”
The only way to determine the association type for certain is to read the association documents, or By-Laws. It is imperative that you obtain a copy of these documents directly from the association, not only for your own knowledge, but to also determine which type of insurance you will need to secure as a unit owner.
Many residents do not even know how their association is legally organized, which can lead to over insuring or improperly insuring the property. As an insurance agent, I urge every resident that is in a position of owning property under any type of association to take the time to read the By-Laws and ask the questions needed to ensure they are properly educated and adequately insured. Here is a quick guide to how the insurance industry defines these associations:
In a true condominium, the ownership is vested in the unit owner who owns:
1. The air space in the individual unit
2 An undivided interest with all other unit owners in such common elements as the building structure, land, recreational facilities, and the like
3. Certain property attached to the building within the unfinished perimeter walls, floors and ceilings.
In a homeowners' association:
· Individuals own their property on a "fee-simple" basis, meaning that only they own their house or townhouse and the ground below. There is no common ownership of any part of their dwelling or townhouse.