Two common forms of multiple-unit dwellings, with independent owners or lessees of the individual units comprising the multiple-unit dwelling who share various costs and responsibilities of areas they use in common.
A condominium is a multiple-unit dwelling in which there is separate and distinct ownership of individual units and joint ownership of common areas. For example, in an apartment house, the individual owners would each own their own apartments while all the owners of the separate apartments would together own the parts of the building common to all of them, such as the entrances, laundry rooms, elevators, and hallways. The building is managed by the condominium association, either directly or through a professional manager. The owners of the individual units are jointly responsible for the costs of maintaining the building and common areas, but they are individually responsible for the maintenance expenses of their particular units.
A cooperative apartment house is usually owned and managed by a corporation, and the shareholders are tenants who lease their apartments from the corporation. The relative size of the apartment that a shareholder-tenant leases determines the proportion of the corporation's stock that that shareholder owns. Each shareholder-tenant pays a monthly assessment, based upon his or her proportionate share of the stock, to cover the principal and interest on the building mortgage, taxes, and maintenance costs.
The development of condominium and cooperative housing arrangements accelerated with increasing costs of real estate, inflation, increased urbanization, and population growth. Until the 1960s, the condominium as a separate
form of ownership was relatively unknown in the United States. The development of condominiums was hastened when the FAIR HOUSING ACT OF 1968 (42 U.S.C.A. § 3601 et seq.) authorized the use of mortgage insurance, established under the National Housing Act (12 U.S.C.A. § 1701 et seq. ), on one-family units in multiple-family structures.
Some advantages of cooperative or condominium ownership are ownership interest in the premises; sharing high building site and maintenance costs; INCOME TAX deductions for the interest and taxes paid by individual owners; decreased risk of personal liability of the various members; and increased choice of location, since high real estate costs frequently preclude individual housing on expensive sites.
An individual who purchases a unit in a condominium receives title to such unit in fee simple...