If you own a home, you may feel that it is your personal domain to do with as you wish. When you closed on the sale of the house, ownership was conveyed to you. There are different types of real estate ownership. Let’s look at the types of ownership and how each affects you as homeowner.
As a buyer, you are probably acquainted with three types of real estate: single-family homes also called detached homes, townhomes, and condominiums also called attached homes. Single-family homes are built on their own lots, generally with you owning the home and the land on which it sits. Townhomes are connected by common walls and roofs. With a townhome you may own the land on which it sits as well as the entirety of the home, except common walls and roofs. Condominiums may resemble townhomes (multi-level), or even apartment style homes (single-story). Condos or as they are referred to legally in South Carolina, horizontal property regimes, share common walls, roofs, elevators or stair towers and land.
Because of their nature as multi-family property, townhomes and condos have “common elements.” Meaning that they have elements of the community in which every owner has a share of ownership. Homeowners’ Associations, governed by a board of directors, composed of elected owners govern the community with an express fiduciary responsibility to ensure the mutually owned elements of the communities are cared for properly and all owners’ rights are protected.
These associations are to be registered as nonprofit organizations and the members of the association are governed by the South Carolina Nonprofit Corporation Act.
Fee simple ownership and your rights as an owner
Across the world, the most familiar type of real estate conveyance is fee simple title. Fee simple ownership is a derived from English Common Law. With this type of ownership, you and your co-owners are the sole owners of the land and structures on the property. There are a few qualifications to this. According to Wikipedia, “The rights of the fee simple owner are limited by government powers of taxation, compulsory purchase, police power, and escheat, and it could also be limited further by certain encumbrances or conditions in the deed…”
As a fee simple title holder, you have the right to sell the real estate, leave it or devise it (the legal term) to your heirs in your will, or inherit it. Other than government and mortgage restrictions, you and your heirs are the sole owners of the land.
Depending on the type of development or subdivision you buy your home in, you may be governed by covenants, conditions and restrictions (CC&Rs.) These may direct you to keep your yard mowed, address how you may decorate your home’s exterior and even when to power wash it. Many modern developments have CC&Rs to help the community remain attractive and prevent obnoxious behaviors or actions which affect individual property owner’s home values.
Townhome ownership and townhome owners’ governance
Contrast fee simple ownership with the ownership of a townhome. Townhomes are connected properties. Townhome titles give you ownership to your entire home envelope: walls, roof, basement or foundation and shared responsibility through a homeowners’ association to connected walls. Due to the need to care for the common elements of the property, there may be restrictions. Your townhome CC&Rs may specifically limit some of your choices. For example, you may be directed to keep your car in your garage, or not park it on the street or keep your roof repaired. In some instances, townhome owners’ CC&Rs provide for the Homeowners’ Association to maintain the grounds, the building’s envelope, with you as the owner paying a fee to the association to cover your pro-rata share of the ownership.
The HOA for your townhome community will set fees to be paid periodically. You will be required to pay these fees as set forth in your CC&Rs. If you do not pay your fees, the board of your HOA could place a lien on your home.
Condominium ownership and laws in South Carolina
The South Carolina Horizontal Property Act defines Condominium ownership as "the individual ownership of a particular apartment in a building and the common right to a share, with other co-owners, in the general and limited common elements of the property.”
Condominium homes provide you with rights of ownership and enjoyment to your unit’s interior. Most condos master deeds and CC&Rs provide that you own all elements “from the paint in” inclusive of HVAC systems, plumbing and electrical wiring. In condo developments there are common elements like amenities or recreational areas. There are also shared or limited common elements. These may be roofs or elevators or stairs.
The “council of co-owners” (as defined by S.C. law) also referred to as a board of directors has fiduciary responsibility to care for and replace common elements and limited common elements as they reach their useful life expectancy. Under normal wear and tear, things break or require upkeep. In condo communities, you pay a regime fee or HOA fee to cover your pro-rata portion of the anticipated expenses. Because of this legally assigned responsibility, board of directors of condos have the right to fine, place liens or otherwise legally affect your rights to your property if you do not pay your billed fees.
The board of directors is required by law to keep records of their activities and fees collection. Boards also are required to insure common elements and in the Lowcountry, they generally purchase flood insurance for the condos and other types of insurance, such as liability insurance for the community amenities. Depending on how the board chooses to bill for these expenses, you may be billed a pro-rata share periodically or you may be assessed annually for these expenses.
Seek legal advice to understand your ownership rights
No matter which type of home your purchase, ask about any CC&Rs for the community. Read them carefully and consult your real estate agent or attorney about the implications of ownership. Their intent is not to hinder your life, but protect your property.
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