What is the Difference Between a Condominium and a Townhouse?

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What is the Difference Between a Condominium and a Townhouse?

questionI can answer this in one sentence: a condominium is declared a condominium.

Yes, it is really that simple but I have read several articles on this topic and all missed this very important aspect.  They have talked about building plans, owning the adjacent plot of land and homeowner’s associations but the bottom line is that in order for something to be called a condominium, it must be declared one.

Common Interest Communities

Common interest ownership means that the units have unit boundaries which the unit owners own exclusively and everything else (open areas, ponds, pool, tennis courts, roads, parking etc.) is collectively owned by all of the unit owners.

The areas outside of the unit boundaries are typically called common elements and are maintained collectively by all of the unit owners through a homeowner’s association (HOA).  The unit owners pay common charges which fund a budget to maintain the common elements and other aspects of the community.


san franciscoA townhouse does not have to be a part of a common interest community.  Each townhouse owner owns the unit (interior and exterior and is responsible for the insurance and maintenance of both), the land in the front and back of the unit and the parking, if there is any.  In this case, there are no common elements and no community association.

This would be similar to a grouping of single-family homes that were smushed together from both sides to form one continuous building.  None of the owners have a financial obligation to the others.

Conversely, if a townhouse building is under a form of common interest ownership and it is not a condominium, it might be referred to as a planned community (the name varies amongst the states).  In this case, there would be a Homeowner’s Association that would pool funds for the maintenance and upkeep of the common elements.

If a townhouse building is under a form of common interest ownership and it is declared a condominium, then it is a condominium.


condominiumCondominiums are a form of common interest ownership as stated above.  The legal documents would specifically state that the community is a condominium.  There would be an HOA responsible for the insurance, maintenance and upkeep of the common elements.

I think it becomes confusing because condominiums can have townhouse-style­ buildings.  There can be 2-12 or more side-by-side units to a building.  The units can have 1, 2 or 3 floors each with or without basements and attics.  They look like townhouses, but they are condominiums.  Most of the condominium projects with whom I have worked have been of this style.

There are other styles of condominium units such as apartment-style (either low-rise or high-rise) and detached/site condominiums and pretty much anything in between.

To complicate matters further, the unit boundaries in the declaration dictate what each unit owner actually owns.  This is especially varied when it comes to townhouse-style units and detached units and is determined by the developer and the attorney who crafts the declaration.

The boundaries can be set to include only that which exists “studs-in” from the basement floor to the inside of the rafters.  Or the boundaries can be set to be “studs-in” on the common walls and also include the exterior, the roof, the footprint of the unit, the front and back yards, the portion of the sidewalk, the parking spaces and so forth.

In the last example, the traits of this unit would be indistinguishable from a townhouse except that it is declared a condominium.

Planned Communities or PUDs

planned communityPlanned communities are a form of common interest ownership like a condominium but not specifically declared as a condominium.  Planned Unit Developments or PUDs are a form of this.

This type of community would be similar to a condominium in that the units would have specific unit boundaries which may or may not include the exterior, land, driveway or parking.  It would have an HOA to maintain the common elements.

While planned communities typically consist of a grouping of detached dwellings, they can also be a grouping of attached townhouse-style buildings.  In my experience, this isn’t very common but they do exist.  These units could look identical to townhouses except they would be under a declaration of a planned community.

So How Will I Know the Difference?

The difference will be stated in the documents recorded at town/city hall.  When real property is part of a condominium or other deed-restricted community it must be filed at the town/city hall.  This gives public notice to the fact that the units are part of such a community.

The best way to find out if a townhouse is a condominium or part of a planned community is to review the title of the property.  To find out if the planned community is a condominium, the legal documents at town hall will specify this.

In any case, consulting with an attorney would be the best solution.  There are attorneys who specialize in common interest ownership and common interest communities.  They could easily provide you with accurate information.

Top image courtesy of Stuart Miles/freedigitalphotos.net

San Francisco image courtesy of porbital/freedigitalphotos.net

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The Condominium Project Approval Team at ReadySetLoan is dedicated to helping condominium projects across the nation to obtain their approvals with FHA and the VA or become recertified with FHA.  We have assisted nearly 200 condominiums and we can help your association.


ReadySetLoan is an active member of the Connecticut and New England chapters of the Community Associations Institute (CAI) and is a frequent contributor to Common Interest Magazine as an expert in FHA/VA condominium project approvals.


Please contact us with any questions regarding FHA or VA condominium project approvals.  You can email me at askeric@readysetloan.com or call me at 404-433-4565. I will be happy to answer any of your questions.


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Comments (11)

Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Eighteen Years Experience in Brevard County

I do not think the average consumer understands what the declarations mean fully.  There are many townhome communities here along the beach that are condos but unless the documents are examined one would never know.

Feb 17, 2014 10:33 PM
Maria Gilda Racelis
Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington - Manchester, CT
Home Ownership is w/in Reach. We Make it Happen!

Good Morning Eric: In my market, the only townhouses I have seen so far which are not considered condominiums are duplexes.

Most of the units within a PUD are detached. I have yet to see or find for myself attached units which are not considered condominiums.

Excellent information to determine the distinction.

Feb 18, 2014 06:31 AM
ReadySetLoan Team
ReadySetLoan Condo Team LLC - South Windsor, CT
Residential, Commercial & Condo Financing Experts

Gary - I don't know if many other than the attorneys know what the declarations mean!

Hi Maria - there aren't many "townhouses" in our neck of the woods; they are typically condominiums.  And, although most of the PUD's that I have seen are detached, I have run into attached planned communities.  I was hired by one in East Windsor to get on the approved condos list and I had to refund their money because they weren't a condo!  It was a grouping of attached PUD units.

Feb 19, 2014 04:00 AM
Suzanne Otto
Six Twenty Designs - Lansdale, PA
Your Montgomery County PA home stager

Perfect explanation Eric :) I always wondered why I called my townhouse a townhouse, but it's considered a condominium. 

Feb 20, 2014 02:42 AM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Excellent Eric. This tells the whole story and I will be reblogging it and sharing with my clients. 

Feb 21, 2014 08:50 AM
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

Eric, These are great explainations for buyers to know about, many thanks.

Feb 22, 2014 08:50 PM
John McCormack, CRS
Albuquerque Homes Realty - Albuquerque, NM
Honesty, Integrity, Results, Experienced. HIRE Me!

Excellent Eric! 

Feb 24, 2014 01:53 AM
ReadySetLoan Team
ReadySetLoan Condo Team LLC - South Windsor, CT
Residential, Commercial & Condo Financing Experts

Suzanne - thank you so much

Debbie - thank you for sharing it with your clients and re-blogging it

David - I'm happy that you approve

John - thank you very much

Feb 24, 2014 02:16 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I think this really varies state by state.  The HOA docs lay out the responsibilities of the association and the owner; and all vary.  Other than that it is style.  Town homes are generally larger and more open (I think).  But as I understand it in California there is no legal difference.

Feb 24, 2014 02:51 AM
Gabrielle Kamahele Rhind
KGC Properties LLC, Tucson Property Management & Real Estate - Tucson, AZ

GOOD MORNING ERIC! I answered this based on title alone -  and my answer was completely wrong!  Thank you for the correct "one sentence" answer!

Feb 24, 2014 07:40 PM
ReadySetLoan Team
ReadySetLoan Condo Team LLC - South Windsor, CT
Residential, Commercial & Condo Financing Experts

Gene - I believe that it could but in order for something to be a condominium, it must be declared as such.  And not all townhomes are part of HOA's.

Gabrielle - you're welcome.  It's such a simple distinction that many overthink it :)

Feb 24, 2014 09:47 PM