What is a condo association?

Wednesday January 29, 2025
If you've been thinking about buying a condo or already own one, you've likely heard the term "condo association" thrown around. But what exactly is a condo association, and why is it important to understand how it works?

This article will answer all your questions—from what a condo association does to how it's different from a homeowner association (HOA). Plus, you'll learn important details about condo association rules, dues, and who actually owns what on the property.
 

Condo associations: Everything you need to know

what is a condo associationA condo association, or condominium association, is a governing body established to manage and maintain a condominium community.

As commonly mistaken, a condominium isn't a specific type of building, but a form of ownership where residents own their units and share responsibility for common areas. When you purchase a condo, you automatically become a member of the condo association. This applies whether you're living in a small complex with a few units or a large skyscraper with hundreds of residents.

A condo association is made up of all the unit owners and is responsible for making decisions that impact the property as a whole. Typically, the association operates through an elected condo board.
 

What is the purpose of a condo association?

Apart from knowing what is a condo association, knowing its functionality is key. The primary role of condominium associations is to oversee the shared or "common" areas of the property. This includes spaces like parking lots, pools, gyms, lobbies, and landscaping. Essentially, the association provides that the condo development remains a safe, clean, and pleasant place to call home.

Specific purposes of a condo association include:
  • Maintenance and repairs: Condo associations arrange for repairs to roofing, plumbing, elevators, and other shared infrastructure.
     
  • Rule enforcement: Practicing and encouraging condo association rules is vital to preserving harmony and aesthetics in the community and, ultimately, its long-term value.
     
  • Financial management: Collecting dues and budgeting for maintenance, repairs, and emergencies are key responsibilities.
     
  • Dispute resolution: Mediating conflicts between residents or addressing complaints to help smooth community living.
Ultimately, the goal of a condo association is to protect your property value and foster a well-maintained living environment.
 

How do condo associations make money?

A condo association is not a profit-making entity, but it relies on funds to operate smoothly. These funds come primarily from monthly or annual dues paid by the condo unit owners.
 

Sources of revenue for condo associations:

  1. Condo association dues: These payments cover everyday expenses like garbage removal, cleaning services, and landscaping. They also contribute to long-term projects like roof replacements or structural repairs.
     
  2. Special assessments: Sometimes, additional charges called special assessments are levied when unexpected costs arise, like emergency repairs or upgrades not covered in the annual budget.
     
  3. Fees and fines: Condo associations may charge fees for using amenities like a clubhouse or assess penalties for violating condo association rules. Transparent financial management is crucial to help provide fair use of the funds and to keep the property in excellent condition.

Who owns the property in a condo association?

When you buy a condo, you own your individual unit. This includes the interior, including your walls, floors, and ceilings. However, the "common areas" like hallways, parking lots, and shared amenities are collectively owned by all unit owners as part of the condo association.

The condo association helps review these areas are maintained on behalf of all members, with costs divided proportionally based on unit ownership.

For example, if your condo complex has 50 units, you may collectively own the pool, landscaping, sidewalks, and parking lot with the other 49 owners.

It's important to review your specific condo's governing documents to understand the boundaries between what you own individually and what is part of the shared property.
 

What is the difference between HOA and condo fees?

Condo fees might sound similar to homeowners association (HOA) fees, but there are some key differences to note.
 

Condominium association fees

  • Typically, these go toward the maintenance and management of shared amenities like pools, lobbies, or parking garages.
     
  • It may cover utilities like water, sewage, and trash collection.
     
  • Often include funding for routine maintenance and major repairs on common property.

HOA Fees

  • It is more common in communities of single-family homes, where fees primarily maintain neighborhood-wide amenities such as playgrounds, walking trails, or communal security systems.
     
  • Do not generally include utility payments or building structural maintenance.
Ultimately, in an HOA, the association owns shared spaces, whereas, in a condo association, individual owners collectively own common property. And while the structure may differ, both fees are essential to maintaining the value of a community.
 

What is a condo board?

The condo board is an elected group of residents who act on behalf of the condo association. These individuals are responsible for managing the association, making key decisions, and implementing condo association rules.
 

Responsibilities of the condo board

  • Financial oversight: Approving budgets, managing reserves, and overseeing dues collection.
     
  • Vendor management: Hiring contractors or vendors for property repairs or landscaping.
     
  • Rule enforcement: Confirming that everyone abides by the community's rules and regulations.
Want to have a say in how your current/future condo is managed? The good news is that most elections are open to members, meaning anyone can run for a seat on the board. Also, if the community is managed by a professional property management company like FirstService Residential, these procedures and responsibilities are often facilitated and simplified by the company, helping you enjoy your community living without extra stress.

Members can truly notice the difference, too. Take this review from Carolyn F., a shareholder in a FirstService Residential-managed co-op:
"I've lived for several years in my co-op, which is managed by FirstService Residential. From my initial interaction in filling out my board package several years ago, I found the experience to be surprisingly simple and intuitive with timely feedback from their team. Even now while working on a refinance application, I've received exceptional service from the applications team, who kept me informed every step of the way. Thank You!"

Carolyn F., Shareholder

What are condo association rules?

Just like any other community, condo associations have rules that promote a safe, cohesive, and pleasant living environment for all residents.
 

Common condo association rules

  • Noise levels: Condo association can limit loud noises after certain hours to help maintain peace and quiet for all members of the community.
     
  • Modifications and renovations: Major alterations to your unit (like knocking down walls) may need approval to check if they align with building safety standards and aesthetics.
     
  • Pet restrictions: Many condo associations limit the size, breed, or number of pets allowed, and breaking these rules may result in fines or penalties, so be sure to familiarize yourself with your association's guidelines provided in the governing documents.

Condo association vs HOA

You might be wondering how a condo association is different from a traditional homeowners' association. While the two share some similarities, the primary difference lies in the type of ownership and responsibilities.
 

Condo association

  • Members own individual units within a shared building and have collective ownership of the common areas.
     
  • Responsible for maintaining the building's architecture, infrastructure, and shared spaces.

HOA

  • Members typically own single-family homes where ownership extends to the property and land.
     
  • Responsible for maintaining community-wide aesthetic standards and amenities, like streetlights and sidewalks.
Think of a condo association as being more hands-on with building maintenance, while an HOA focuses on general neighborhood upkeep.
 

What to expect from a condominium association

Owning a condo can offer a blend of convenience, community, and property investment. Understanding the role of a condo association rules and all its other entities helps you stay informed and enjoy the benefits of shared living.

To learn more about how our property management services can benefit condo communities, contact FirstService Residential today.
 
Wednesday January 29, 2025