ABA Family Legal Guide

Home Ownership

Shared Ownership: Condos and Condominiums

Legal Rights and Restrictions

How do state laws apply to common-interest communities?

Most of the substantive law--and confusion--lies in an ever-changing patchwork of state statutes. The governance of cooperatives falls under state statutes governing corporations and nonprofit corporations, because residents of a cooperative own stock in the corporation that owns their building. The same corporation statutes apply to the associations governing planned communities, which likewise own the common areas.

In most states, condominiums don't have a corporation responsible for liabilities, taxes, and governance. That is why each state has a special set of laws detailing how condominiums must be organized and operated. These laws require each condominium to file a declaration and bylaws, with specific requirements regarding the rights and duties of the association. (In states like Florida where condominium associations are incorporated, the association must file articles of incorporation.) Planned communities require no specific statute, but some states include them in a law governing all common-interest communities.

Condominium statutes vary considerably, from state to state, and many lack protections for consumers. While some states provide only the barest framework for creating a condominium, others are incredibly complex and detailed.