Condo/HOA/Townhome - All Legally identical?

I've been reading lots and lots trying to educate myself on our Townhome Association.

I think it was Robert who mentioned something about the differences between condos and HOAs...are they different? I live in a TOWNHOME...NOT a condo, not an individual house...think row house. Are there legal differences (I'm in Colorado) in the definitions of Condo/Townhome? The statutes for Colorado don't seem (and I am NOT educated on this) to make a difference.

Thanks!

Tracie,

Townhomes usually fall under the category of condo. The difference between a condo an a planned community (sometimes referred to as an HOA) are that the condo property owner owns a portion of his individual unit together with having an undivided or joint ownership of the common areas, whereas a property owner in a planned community owns his whole home and the lot upon which it sits and the HOA owns, in total, the common areas.

Tracie,

I'm surprised that Colorado doesn't have different statues re condos or townhomes as we do here in Florida.

Hi Dana,

This is where my own confusion comes in, and why I think townhomes are different, but I'm not sure how. We have 19 units/lots/properties/whatever, and they are connected to each other in four "buildings". Does that make sense? So, on the far west side of our complex, we have 5 units that make up group one. They're connected to each other, and share a roof but no ventilation/attic/backyard/entrance/etc (while connected, they do have firewalls in between each unit). The garages in back share a roof. The next group has 4 units, which share a roof and the garages in back share a roof. So on, and so on.

My understanding of "condos" was that they typically share some type of attic/ventilation space, which the condo association owns.

I brought my by-laws and articles of incorporation with me today, so I could proof them. (I retyped them because there's NO electronic record. I did scan the originals, and the originals are in a safe place). My by-laws - ""Lot" shall mean and refer to any plot of land shown upon any recorded subdivision map of the Properties with the exception of the Common Area."

Do "condo" people pay property taxes? We as owners pay property taxes, and about 20 years ago, the THA worked with the city/county, so the common area taxes are divided up evenly between the 19 units' owners.

I don't know if that clarified or muddied...

Thanks!

Tracie,

On 5/20 I posted a message explaining the difference between a condo and a planned community (HOA). You may have missed it, so here it is again:

Townhomes usually fall under the category of condo. The difference between a condo an a planned community (sometimes referred to as an HOA) are that the condo property owner owns a portion of his individual unit together with having an undivided or joint ownership of the common areas, whereas a property owner in a planned community owns his whole home and the lot upon which it sits and the HOA owns, in total, the common areas.

The fact that the condo owners are paying property taxes on common areas tells me you fall into the condo classification.

There are only 3 classifications that I'm aware of:

1) condos
2) planned communities (sometimes referred to as HOAs)
3) timeshares

Hi Dana,

My other posts detail my interest, but I'll summarize. I'm the Property Manager, an Owner, and the President (and Chair of the BOD and acting Secretary/Treasurer) for our very small (19 unit) townhome association in Southern Colorado. We were established back in the mid80s, but since then, all the legalities/documentation/paperwork have fallen into shambles. I became active about 3 years ago, and I've been trying to find out what I need to do.

No issues right now, knock on wood. Our units are brick faced, and in very good condition. Trim is good, roofs are in good shape, all is basically well structurally. Owners are happy, and I rarely hear from anyone about anything. Yes, we have barking dogs, but we figure that's just what most dogs do - they bark. We're REALLY easy-going and casual, but I think that's what got us into this situation in the first place!

I filed our first (required yearly!) annual report with the state this year. The CCIOA, SB 100, SB 89, and SB 1359 (all Colorado statutes) require updates to documents, but we're not in compliance with any of them. We operate with three directors, when our by-laws require 4. We still have two classes of voting members (class A - HUD & developer - LOOOOONNGGG gone). We have never publicly disclosed anything to anyone. We've never had a financial audit. We don't have a reserve fund. The insurance policies specifically EXCLUDE worker's comp. Our documents require a monthly BOD meeting, but we meet yearly (in a combined members/board meeting...).

I could go on, and on, and on, but I think you get the point. This is all crash-course learning on what the heck I'm supposed to be doing as an active OWNER (first and foremost), then the Property Manager (as which, I'm also NOT covered on our BOD insurance), then as the only active person on the Board. Took a few years to figure out what I'm supposed to do, and now that I'm learning, I'M TERRIFIED and HORRIBLY UNDEREDUCATED!!!!!!

So, my interest in a nut-shell is to figure out how to get our association back in the good graces of the state (even though I don't know if they know we're not in compliance, nor do I know if they even care).

I'm just terrified of having our association in hot water in this really litigious age.

Thanks for responding!

Tracie,
Maybe I can help because I own a similar unit in Florida. These are stand alone buildings which are divided up into 2, 3 or more units, joined by a common roof. Each of 2 units also share a center wall where the HOA is responsible for that shared common element.That would include the roof, underlayments, support structures and all appurtanages which support the roof. At my unit, I own the lot as far out from the house as the roof eaves go. After that, it becomes common property or the associations responsibility.

That is where the common element ends. Each owner owns his walls, inside and out, his lot, doors, windows and all other parts of the dwelling. This is why they are not called condos. They fall under HOA laws, not condos.

Yes, condo people pay property taxes. Yes, the common area taxes are normally paid for from the funds allocated in the budget under taxes.

Tracie,
I really have no spat with anything anyone has written here. I would suggest you go to your county courthouse and inquire around in places like planning and assessors office or what ever has any original information about your complex. You were born a few years ago and maybe there was a different category, but sure you are carried on the county books as something, they should help, it is in their interest. Also check anything listed in State business files.

There is a lawyer in Illinois by the name of Goldberg that has a site and for my money his definition of a condo is as good as they come.
I paraphrase: When you buy into a condominium association you buy the right to reside in a specific limited area, that's it, when you sell you sell this right. Then he goes on to say that ALL else except these rights to individual spaces are common property and for example if there are 100 units you own 1/100 of all the value. If units are valued differently you own an apportioned share. An apportioned share is determined by dividing the initial for sale price of each unit by the total value of the entire complex.
So this means if you are paying a different general assessment than your neighbor you are probably a condo. But there are condo that charge the same amount for each unit, therefore they are not apportioned and pay 1 share of the total assessment. 100 units, each unit pays 10 %.

But really, all this has to be part of your documents or you can't charge anyone anything since you need a charter to operate in the state as a business.

After saying all that there is going to be someone present an exception and there may well be, but, I would go with what I wrote and if necessary tweak that , rather than try and re-invent the wheel.
I hesitate to post this this but you all don't know where I live so you can't hunt me down and shoot me.

Ann makes a very good point, especially with the last sentence. My association was built in '84, our documents were upgraded in '00 but through both our attorney must have finished last in his class because our documents are terrible. Our current attorney, who is the best in Connecticut, would like to again update our documents before proceeding to make an accurate maintenance matrix of who's responsible for what. Of course I'm having a difficult time with my board loosening the purse strings to have him do it.

There is a waiver at the bottom of this forum and I'll post their website here http://www.hindmansanchez.com/index.html (Copy and paste in your browser if it doesn't show up highlighted.) They have a great website loaded with great educational publications and articles. Best of all they deal with Colorado law which applies to you. Heck, depending on where you are in Colorado you might want to hire them as it certainly seems like you could use some legal counsel to help you out. I'm also a big fan of CAI, caionline.org I'm not sure if I can post that or not so I hope I don't get yelled at.

Dana

I really appreciate everyone's thoughts! Open discussion is good! I have a much better understanding now, and I think that legally, we're a condo, so that answers my question.

Yes, I'm in Colorado, and I own the land that my townhome sits on.

I was really asking this question, so when I read the heavily legalese in the statutes, I can understand how to apply them to my association.

Thanks again, everyone! I know that I'm going to be here for a long time!

T

Donna,

I'm not so sure! Tracy did state that the member's pay a share of the prop taxes on the common areas and also that the townhomes are attached,share a roof and the HOA owns the space between the walls. All these factors point to Condo.

Mary and Donna,
I know of one Townhouse Condo in Ohio that was structured very similar to this one.

Why doesn't it tell you in your documents, ours does in SC and the State registers them as such (condos). But God knows what they do with HOA's as the state has yet to pass legislation to address HOA specific. Which brings up the fact it could be a county decision how they are registered........who knows? One thing is clear, however they are registered is going to be the best deal for the guy developing the property. In SC you can go to state site and search name of any registered business and that information is listed there Assuming incorporation has occurred.

If you own the land you are a Townhome in colorado not a condo. As to taxes, if you are paying taxes through the association you should not be. You are a not-for-profit corporation and exempt from taxation. this is fixable readily enough with a letter to the county recorder and county assessor and a copy of the plat map showing that common area is owned by the association. Fix it all the time. Use dto get it abated and previously paid taxes refunded they don't do that anymore though. Pity!

Ann,

As I stated earlier, the debate is not whether it is a townhome or a condo, it's whether it is a condo or a planned community (HOA). I don't believe CO has townhome statutes so the HOA must either fit into the planned community (HOA) or the condo statutes.

Being a nonprofit corp does not mean they are exempt from taxation, that applies to a tax-exempt org with an IRS 501(c) designation. HOAs are exempt from paying taxes on exempt function income (assessments) but must pay taxes on non-exempt function income, such as interest earned on bank accounts.

My reference about county versus documents relates to poor declarants who build one sort of project but use documents that are for a different type of project. for example we manage one association that has townhome or HOA documents but the county recognizes them as a condo. the name has condominium in the name and they are a converted aprtment complex so they should be condo. With Regional Building department here it does make a difference. with a condo project the association contractors when doing projects that require a permit must have a higher designation than if the project is a TOA or HOA. They treat condos as if it was a public use facility such as an apartment complex.

The legal description on the warranty deed is usually where we look to find how the property was deeded. typically if it refers to a lot and/or block it is TOA/HOA status, if it refers to a unit # or address it usually is a condo. But i have run across some older associaitons here in town that are "wonky" in their names/legal descriptions/documents.

Yes common area property taxes if not exempt are passed through at a propotionate share rate on the individual owners taxes. then here there are other fees (read taxes) that are passed on to associations and owners regardless of the status of the ownership of the property.

Ann,

That may be true in CO, but it is not the case in AZ. HOAs and condos pay property taxes.

But, you did not respond to my other statement. Does CO have townhome statutes? If not, as I stated earlier, the debate is whether or not this particular s/d is a condo or a planned community (HOA), not whether it is a condo or a townhome. Townhomes sometimes have features of both; therefore, IMO, the designation is usually decided based upon whether it is more like a condo or more like a planned community. That is, of course, when the designation is not specified in the docs., which is the case here.

Ann,

You stated: "The legal description on the warranty deed is usually where we look to find how the property was deeded. typically if it refers to a lot and/or block it is TOA/HOA status, if it refers to a unit # or address it usually is a condo."

I looked up several parcels on the Maricopa Co, AZ recorders website and this is what I found. Some are listed as Lot and parcel number; some as lot and unit # and others as lot only. How would you make a determination for those that show only the lot number?

Tracie,

As I stated previously, the problem is not whether you live in a townhome community or a condo community; but rather what statutes apply to your community -- condo or planned community (HOA). This is something the board needs to determine. I would recommend seeking legal advice on this.

Copied below are the CO statutes your assn needs to choose from. Note that the Condo statutes are explicit in stating what a condo is. Also note that the CO Common Interest Ownership Act talks about condos and planned communities so I don't know if this act is meant to apply to both.

38-33-102. Condominium ownership recognized.
Condominium ownership of real property is recognized in this state. Whether created before or after April 30, 1963, such ownership shall be deemed to consist of a separate estate in an individual air space unit of a multi-unit property together with an undivided interest in common elements. The separate estate of any condominium owner of an individual air space unit and his common ownership of such common elements as are appurtenant to his individual air space unit by the terms of the recorded declaration are inseparable for any period of condominium ownership that is prescribed by the recorded declaration. Condominium ownership may exist on land owned in fee simple or held under an estate for years.

ARTICLE 33.3
COLORADO COMMON INTEREST OWNERSHIP ACT
Editor's note: The provisions of this act are based substantially on the "Uniform Common Interest Ownership Act", as promulgated by the National Conference of Commissioners on Uniform State Laws. Colorado did not adopt article 4 concerning protection of purchasers and the optional article 5 of said uniform act concerning administration and registration of common interest communities.

Tracie,

if you want to wait until we can meet and can bring your plat, ccrs, and the addresses of the community I might be able to save you the trip.

Mary,

And then there are the "DOAs" Those are the slugs who show up and contribute nothing to their HOA ,POA, OR COAs

I agree with Donna. I lived in a condo and was only responsible for the interior of my unit. I now live in a townhome and am responsible for property taxes and all repair, interior and EXTERIOR. The only thing the association is responsible for is the lawn care, etc.

Ellen,
Donna is right in that you only own the air you breath. I think maybe a clarification might be, you own the right to live in a specific area and you own a porportionate share of everything else.
When you sell you sell the value of that right.

But, I have to take exception to your statement that if you live in a condo you are not responsible for property taxes on that unit. You have a deed to that unit, you pay property taxes. I have never heard of property taxes being paid by the regime, could be maybe, but in the end you pay taxes. You also pay homeowners insurance on that unit and you pay a proportionate share of the insurance umbrella that covers the property, plus any special assessments. You usually pay utilities, either individually or as a share of a bill.

Maybe I was not clear. I did not say no taxes were paid, I said or meant to say that the Association as teh corporation does not pay taxes at least here in colorado they do not. In fact no associaiton pays property taxes on association owned property as the association. I was not referring to anyone's personal tax bill.

Ann & Robert,

As I've mentioned earlier, the question here is not whether or not Tracie's community is made up of townhomes, but rather whether those townhomes fall under the condo or planned community (HOA) statutes. That is the only issue here. Tracie mentioned that the property owners pay property taxes on the common areas, which would mean, IMO, the townhomes would fall under the condo statutes. Following are the def's of a condo and planned community:

1) condo: ownership of real property that is characterized by separate ownership of portions of the property (their unit) and undivided or joint ownership of the remainder (the common areas).

2) planned community: real estate development which includes real estate (common areas) owned and operated by a nonprofit corp or unincorporated assn, n which the owners of speparately owned lots, parcels or units are mandatory members.

Speaking of AZ, I know of no requirement for the declarant to state whether the community is a condo or a planned community; however, the public report does have certain reporting requirements for condos. To my knowledge the deed nor the CCRs are required to have this specification notated.

Regarding property taxes, in AZ all HOAs (condos, townhomes, planned communities) pay property taxes on the common areas. There are special guidelines bound by state statute that outline how the valuation is computed.