Condominiums, Co-Ops, Condexes, and Townhouses

How Do They Differ?

Jim receives calls constantly from buyers who begin the conversation like this: "We are looking for a condominium or a townhome..." Since several different kinds of housing are lumped together under the classification of "condos" in New England, it might be helpful to explain the differences for you to ensure that there is no confusion about the differences, no surprises when you decide to make an offer on one of them. Knowing the difference before you buy is an important discovery step!

Jim Sells Condominiums


A condominium (Condo) is a legal term and State laws govern how they are set up along with certain special requirements for how property transfers take place. It is a term of legal ownership. A condominium may be formed as new construction or in a conversion from an apartment building or other building into units which are sold and legally described separately. In each unit there is its physical space, a certain extent of the property which is owned by individuals; and then, there is also certain space and property owned by the community. Condos are generally managed by a HomeOwners' Associations. Members of the board are elected by the owners and they decide on the budgetary operation and any other rules for the group of owners subject to approval by the majority. Each individual owner pays dues to support the common areas and expenses of managing the complex and the Association.

Jim Sells Condominiums

Condo Styles

Condominium units may be flats, studios, or other configurations such as found in converted two or three-family houses. They may be stand alone, which is rare, or share common walls with others, which is more typical. Condominiums enjoy all of the tax benefits of home ownership. They are relatively easy to finance. The usual catch is, Fannie Mae and Freddie Mac require that 50%-70% of the units be owner occupied and that a certain percentage of the units (70%) be already sold before closing on any units in a newly constructed complex can occur. Those first units would require all cash or 20% down. Since these guidelines always seem to be changing, it is best to check with your lender first before beginning your search! FHA loans are easily obtained for approved condominium complexes. Do NOT assume that any/every complex is FHA approved!

Jim Sells Co-ops

Housing Cooperatives

A housing cooperative is a legal entity—usually a corporation—that owns real estate, consisting of one or more residential buildings. To live in a co-op an individual must buy stock in the entity. Therefore, a shareholder in a co-op does not own real estate, but a share of the legal entity that does own real estate. A co-op can be a single-family residence, a farm, or a large building of multiple units. Each shareholder in the legal entity is granted the right to occupy one housing unit, sometimes subject to an occupancy agreement, which is similar to a lease. The occupancy agreement specifies the co-op's rules. The building is governed by an elected board and dues are collected for the expenses of the building. Since many housing cooperatives strive to run self-sufficiently, as much work as possible is completed by its members.

Jim Sells Co-operatives

Special Characteristics of Co-ops

Co-operative ownership is quite distinct from condominiums where people own individual units and have little say in who moves into the other units; because of this, most jurisdictions have developed separate legislation, similar to laws that regulate companies, to regulate how co-ops are operated and the rights and obligations of shareholders. Financing is usually through special lenders or by owners. Co-ops enjoy the tax breaks of home ownership.

Jim Sells Townhouses


Townhouses or townhomes are usually owned fee simple where each person generally owns the land under and often, some adjoining land - a back yard or side yard. Townhomes often have one or more shared walls with other units similar to row housing. Since, each unit is separately and wholly owned, it is not uncommon for each owner to be responsible for all upkeep, taxes, and insurance. Depending upon how the community was originally set up, there may or may not be an Association, there may or may not be homeowner dues, and there may or may not be a board to make rules. Unlike condos, townhomes are easily financed just as if you were buying a single-family, detached home. Naturally, you enjoy all of the benefits of a single-family homeownership.

Jim Sells Condexes


A condex is not a condo given to the ex through divorce proceedings, although perhaps it could be! Most simply put, a condex is a former side-by-side duplex that underwent a "condo conversion". The name condex is derived by combining the terms condo+duplex - removing the letters o and dup. This required changing the deed and legal description of the property. Depending upon how the conversion was structured, there may or may not be a condo-association as well as have no HOA or condo fees. A yearly, shared expense is Insurance for the building, termed master insurance. Each owner maintains his or her own side of the property including any yard on his half of the property. Each shovels or plows the snow in his/her own walk and driveway.

FHA has just started allowing mortgages once again on Condexes but only when set up legal and correctly. The biggest sticking point is an agreement outlining short term maintenance and as well what happens when long term maintenance is needed such as replacing the roof. Often just known as a maintenance agreement. Listing and selling a condex takes special experience and "know how". Too many owners list with just anyone without asking if they are experienced with a condex and they usually end up taking much longer and getting much less by using an inexperienced condex broker - even if it is termed a condo, it is not "JUST" a simple condominium sale. The same can be said for using a Buyer broker who isn't familiar with the pros and cons and able to guide the buyer - and, in many cases, the seller and listing agent through ENTIRE Buying process.

Jim Sells Condexes

Condex Pitfalls

In the case of a roof replacement, the two owners are supposed to chip in equally to pay for it unless there are condo docs stipulating otherwise. Whereas condo fees and the condo association cover exterior maintenance, insurance, water, snow removal, etc., the landscaping, plowing, maintenance, etc., of the condex is usually shared by each unit owner. Obviously, the main difference and point to research is whether there is an association or not and if so, is it being properly managed. Consequently, condexes come with a certain amount of risk.

If you want to buy a condex, you must be aware of a several potential drawbacks:

  • If the "co-owner" has no money and cannot pay his share of expenses, you will be stuck; and, although legally recoverable, this can become a real headache.
  • Also, typically, water and sewer will be measured for the entire home, with the association paying those bills from fees; but, if you are single and the other owner has a family of 5, guess what, you are paying a portion of their water/sewer unless you are willing to pay to have separate meters installed.
  • It can also be hassle when it comes time to sell if there are no reserves set up for exterior maintenance. Think about it... Who wants to buy into a condo if the reserves are zero and a lot of repairs are imminent?
  • Last, if the other owner goes belly up and is foreclosed upon, good luck collecting association fees from a bank! Again, recoverable from the new buyer; but not without expense and hassle.