Legal and Practical Differences Between a Townhouse, Condominium, and Co-op

Understanding the legal meaning for different types of properties that involve some sort of shared ownership.

By , J.D., University of Washington School of Law

People hunting for a first home are often drawn to the convenience of units within community developments. They might be picturing, for example, a two-story shingled structure, perhaps sharing one wall with others, and with an association that will take care of gardening and other maintenance.

But what exactly does this mean, when you see real estate ads for townhouses, condos, and co-ops? They all sort of look the part. It doesn't help that the sellers themselves sometimes use the wrong names to describe the unit. How do you know which you're really looking for? That's what this article will answer.

You Can't Tell a Townhome From a Condo or Co-Op by Looking

Many people mistakenly believe that the differences between condos, townhouses, and co-ops are physical, as between a brick row house and an urban loft. In reality, however, the main difference is how property ownership is legally structured.

Legal Differences Between Townhomes, Condos, and Co-Ops

In both townhouses and condos, any common areas—parking, planted areas, pool areas, and walkways —are partly yours, as you own them jointly with all your fellow owners. The differences arise when you look at what part of your individual unit you own.

  • In a townhouse, you own all of your own unit—both the inside and the outside, for instance roof and exterior walls—plus you own the land upon which it sits.
  • In a condominium development, by contrast, you own the inside of the unit, but not the exterior, and not the land upon which it sits.
  • As for co-ops, your ownership is defined not by the physical portions of the property, but by the number of shares you own in the corporation that owns the property. You have usage rights to an individual unit and to common areas.

Which Legal Structure Is Best?

Each of these three types of properties has its own pros and cons. With a co-op, for example, transfers often require board approval, which can make them hard to sell, and thus a less worthwhile investment than the other two. In a townhome, you might enjoy the control that comes with owning the entire structure and land; but the maintenance will be all yours to deal with, as well.

In the end, each community is unique, so you'll want to carefully read its rules and governing documents of the homeowners' association (HOA) to understand what you're getting into. Also see Living Under a Homeowners' Association.

Who Has the Last Word on What Exactly You're Purchasing?

If you're not getting clear answers about what you're buying into from the property seller, or if the real estate ads don't seem to match the legal documents associated with the property, you might want to consult with a real estate attorney.

And for more on what to expect when buying into a community, see the Choosing a House or Property section of Nolo's website.

Talk to a Lawyer

Need a lawyer? Start here.

How it Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you
Get Professional Help

Talk to a Real Estate attorney.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you