Condo, Co-op, Townhouse, TIC — What's the Difference?

When we think of buying a home, the first thing that comes to mind for many is a detached, single-family home (complete with grassy yard and dog). But for many, especially those looking to buy in an urban area, a condo, a townhouse or an apartment could be a more likely scenario.

But what's the difference between a condo and a townhouse, anyway? And what about housing co-ops, which are so common in New York, or TICs, which you will probably come across in San Francisco?

The type of home you choose can affect the types of changes you can (or cannot) make to your home, the number of rules and restrictions you must comply with, and the amount of money you'll need to pay in monthly fees. Here's how to keep these terms straight so you can understand the type of home you are considering buying without wading through heaps of legalese.

Condo

What you own: Condo owners do not own the land or the exterior of the building, only the inside of the unit itself. Because only the interior of the unit is owned, you could potentially share walls with neighbors above, below and on both sides — although there are also freestanding condos. Any stairways, entries, gardens and common areas outside your unit are owned collectively by all unit owners.


Fees and rules: If you own a condo, you pay a monthly fee to a homeowner's association for maintenance of the property. Since you do not own the building, you may not choose paint colors for or make changes to the exterior or common areas, but you are free to do whatever you want to customize the interior of your home.


Townhouse

What you own: When you purchase a townhouse, you own both the structure itself and the land it is on. Unlike a condo, a townhouse has its own roof and may have a garage and private yard, which you also own. Because you own the property, you would never have upstairs or downstairs neighbors in a townhouse, though you may have neighbors on either side.


Fees and rules: Just as with a condo, if you own a townhouse, you must pay a monthly fee to the homeowner's association, which goes toward maintenance costs of the property. Unlike with a condo, you can make changes to the exterior and yard of your townhouse as well as the interior. However, the homeowner's association may have rules you are required to follow concerning exterior paint colors, landscaping and more — be sure to ask about this in advance of purchasing if this is important to you.


Co-op

What you own: In a housing co-op, you are actually purchasing stock in a privately held corporation — the corporation owns the building, and your share buys you the right to lease an apartment from the company where you are part owner. Unlike condos, townhouses or TICs (described next), a co-op is actually considered personal property rather than real property.


Fees and rules: The co-op board vets all potential new member owners, and boards are notoriously picky — you will need to submit a great deal of information and sit through an interview. Once in (if you are selected), you will be required to comply with all of the board's rules, which can include anything from paint colors to noise — and the rules can change at any time. You must also pay monthly fees to the co-op board.


Tenancy in Common (TIC)

What you own: Especially common in San Francisco and other areas that forbid turning apartments into condos or co-ops, a Tenancy in Common (TIC) allows you to own a percentage in an undivided property. For instance, you could buy 50 percent of a two-unit building. Then you and the other part owner draw up a Tenancy in Common agreement, which outlines exactly how you will divide the space — in this example, it may record that you will occupy the upstairs unit and share the backyard.


Fees and rules: Unlike with condos, townhouses and co-ops, there is no board or homeowner's association to pay monthly. However, each TIC is unique in the way the part owners decide to share costs and responsibilities. You will need to come to an agreement about painting and making changes to the exterior and shared areas, though you likely have more flexibility to change things within your own space.

Tell us: What do you love or dislike about your condo, townhouse or TIC?

More: Get ideas from creative apartments and townhouses

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