Ownership Options for Downsizing

Condominium and Townhome Housing

In condominium and townhome ownership residents hold the title to the unit in which they live, but common property such as halls, club house, parking garage and etc. are held jointly by all residents. A major difference between townhome and condominium ownership is that townhome residents own the land their unit occupies and condominium owners do not. Condominium residents own the land jointly. For both condominium and townhome owners, mortgages and taxes are the same as for any owned home, and fees are collected to cover the costs associated with the common elements (exterior maintenance, landscape, parking sites, cleaning of common areas, and so on). A reverse mortgage can be obtained on most condominiums and townhomes which can useful if there is a substantial assessment. You can also use a reverese mortgage to purchase a condominium or townhome. There is generally an elected Board of Directors that makes decisions for the group of owners

 Cooperative Housing

A corporation, composed of residents, owns and operates the property and residents purchase shares in the corporation in order to live there. Members sign an occupancy agreement in which they agree to pay a one-time membership fee as well as their portion of the mortgage and maintenance costs. “Limited equity” coops are those that allow the seller to realize only a certain amount of gain or profit when the unit is resold. Because the living space is not owned outright, there may be certain conditions in selling one’s membership and equity; these should be explained at the time of purchase.

Condominiums, Townhomes, and Cooperatives: Architectural Style, Services, and Amenities

Typically condominiums and cooperatives are either high rises or low rises, much like an apartment, but they can vary in their architectural form. Townhomes or row houses usually have their own entrance and may be one or more stories tall with or without a basement. All three types may offer a few services and are usually designed for active, independent adults. However someone could arrange for services to be brought in. Because this type of housing appeals to active adults many properties of this type have included amenities such as a clubhouse, pool, tennis court, business center, walking paths, etc.

 If you are thinking about a cooperative make sure you ask:

  •  What is the share price?
  • Where can I obtain loan financing?
  • How much are the monthly carrying charges?
  • What is the underlying mortgage?
  • Are there resale restrictions?
  • For a copy of the by-laws.

Questions for potential condominium, townhome, and cooperative owners are:

  •  What is the subletting policy?
  • What is the pet policy?
  • Can I obtain a reverse mortgage on my property?
  • What is the policy for making alterations to my unit?
  • What improvements do they have planned to the common areas?
  • Is the building managed by a professional management company or do residents take care of the business?