Townhomes: What does "Fee Simple" mean, and how will it affect me as a buyer?

Asked by CS, Atlanta, GA Thu Feb 12, 2009

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Don Lantier, Agent, smyrna, GA
Wed Feb 18, 2009
In general there are two types of ownership in a townhome community....Fee Simple and Condominium.

Fee Simple almost always means that you are responsible to pay for the exterior manintenance of your townhome. Although you will pay a monthly fee it generally only includes coverage of the common areas of the maintenance of the land upon which the townhome community is built upon.

Condomimium ownership generally means that all exterior maintenance is paid by the condominium Association to whom you pay a monthly or annual fee. You most likely would only need to insure your home from the inside walls and a renters isurance.

Simply put, a Fee Simple Townhome means when the Home Owners Association tells you that your deck needs to be painted you must do it and pay for it out of pocket. Same goes for Roof and other exterior maintenance as prescribed by the homeowners Association.

It is highly advisable that you obtain a copy of the Condominium Documents from the seller or Homeowners Association as well as the latest financial statement for the community. Knowing how much money is in reserve along with projected long term community expenses is key to understanding if and when Homeowner association fees may or may not increase on a monthly basis
5 votes
While builders these days are "blurring the lines" on townhomes and what "fee simple" means, owning real estate as "fee simple" originally referred to owning the land, as well as the building (as opposed to "leasehold"). In the 1970's, when condominium ownership came into being, it was for apartment buildings that they wanted to divide up and sell individual units, while leaving the ground and common areas owned (and maintained) by everyone.
There are townhomes that are "fee simple" that do not have an HOA (mostly older communities) which leads to a problem of exterior maintenance (or lack thereof) that really came into force in the market crash.
Maintenance is a completely separate issue and as mentioned by Don, you must get a copy of the Covenants (sometimes called the CC&R's, referencing covenants, conditions and restrictions) to see what you are responsible for and what the HOA is responsible for. Things you think may be covered (like windows) many times are not.
Flag Thu Dec 29, 2016
this is not always the case - there are fee simple townhome developments in Chicago where the HOA pays for exterior features like walls, roofs, downspouts etc- when they need repairs from general wear and tear- NOT from fire or misuse or disaster. Those are to be covered by the living units' owner. Best advice- get the HOA rules and Regs and be sure you understand it...
Flag Mon Jan 4, 2016
How can you convert a condominium HOA into a fee simple. We are living in a 13 units townhouse community and want to convert into fee simple.
Flag Mon May 25, 2015
Can fee simple property be rented or leased by the mortgage holder if the condo association documents say rental prohibited in its by laws
Flag Sun Nov 3, 2013
Jesseybeth, Home Buyer, Dallas, TX
Thu Jun 11, 2015
Fee simple is the most common type of land ownership, meaning that the owners have complete ownership of the land and the home, but are still subject to taxation and debt obligations on their mortgage. Fee simple is contrasted with lease ownership, meaning the owners have complete access to the land, but they don't actually own it. Single family residence owners have fee simple ownership, but condo and many townhouse owners don't since they only own their unit, not the land on which the development is built. A condo or townhome development will list the type of ownership available in the Covenants, Conditions and Restrictions (CC&Rs) document.

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5 votes
Curtis Willi…, , 30269
Thu Feb 12, 2009
Plain and simple: you have unrestircted powers to dispose of the property as you see fit, sell it, deed it, or leave it in your will or inheritance.
5 votes
Can you put a small, say 600 sq ft prefab house on it? Can you do what you like as long as it's legal?
Flag Tue Jun 6, 2017
AtlantaHomeM…, Agent, Decatur, GA
Thu Feb 12, 2009
I wanted to be brief but to answer your question, I thought more insight is warranted. With that said, if you want enjoy and live on your property as you see fit? Fee simple ownership whether Townhomes or Condo's offers you the entire "budle of rights " of ownership with the property you purchase. This means that you have:

the right of possession - the property is owned by whomever holds title;
the right of control - within the laws, the owner controls the use of the property;
the right of exclusion - others can be excluded from using or entering the property;
the right of enjoyment - the owner can enjoy the use of the property in any legal manner; and
the right of disposition - the title holder can sell, rent or transfer ownership or use of the property at will
Ownership of land is holding "title" to it. The evidence of that title is the deed. The seller executes a deed to transfer title to real property and the bundle of rights that go with it.

Condominium Ownerships share common walls or air rights within those walls regardless if your condo is Townhouse styled or a flat. The common areas outside your walls to include structures, facilities,etc. are not controlled by individuals owners as yourself, rather by an association of owners - with controlled being the key word here!

It's a great question though, that lots of buyers are reluctant to ask because of some confusions with this issue or the type of Condo/Townhouse they are attempting to purchase.

For more information on this and other FAQ's on buying a Home feel free to contact me direct or register for a free Buyer Guide at our website below. Call now @ 678-851-4463 or email:

I hope this helps even more and I look forward to speaking with you soon.
2 votes
Lisa Crowder, Agent, Atlanta, GA
Thu Feb 12, 2009
With townhomes, there are 2 typical ownership options in Atlanta -- fee simple or condominum ownership. If the townhome was a condo, it would mean that you would own from the paint in -- the walls, roof, land, etc. would all be common elements and you would not own them. Since the townhome is fee simple you own the walls, the roof, and land under the unit. This means not only do you have control over these things, but you also have to fix them if anything happens to them. Check to find out whether or not there's any kind of homeowners association and what, if anything, any HOA fee covers. Also find out if there are any kind of restriction as to what you can do to your unit (architectural controls, etc.)
2 votes
laurie cass, Agent, Atlanta, GA
Thu Feb 12, 2009
"A fee simple (or fee simple absolute) is an estate in land. It is the most common way real estate is owned in common law countries, and is ordinarily the most complete ownership interest that can be had in real property short of allodial title, which is often reserved for governments. Fee simple ownership represents absolute ownership of real property but it is limited by the four basic government powers of taxation, eminent domain, police power, and escheat and could also be limited by certain encumbrances or a condition in the deed. "...... Wikipedia

What it normally means when you are referring to condominiums is that the ownership of each unit is "fee simple" and each owner is responsible for maintaining their own unit...not the home owners/condo association.
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2 votes
Dennis Jones, Agent, Tampa, FL
Sat Feb 17, 2018
Florida: Can an owner of a townhome that has no HOA and is a Fee Simple Ownership paint the outside of their townhome without permission from the attached neighbor?
0 votes
Rccollins, Home Buyer, Atlanta, GA
Fri Apr 7, 2017
How does fee simple work if it is written in a dee?
0 votes
Gsburt68, Home Buyer, Thomasville, GA
Wed Dec 28, 2016
why is HOA needed in the first place. Is it really necessary the have an association telling you the rules of what you can and can not do. Condo\ Townhomes I can somewhat understand. But single homes is another thing. If I want to paint my home, want pets, or change the flooring from carpet to hardwood floors. I should not have to ask permission to do so. You might as well rent and come out cheaper than paying mortgages, insurance, and hoa fees.
0 votes
(con't from previous comments) Always read your HOA documents before buying a home in a neighborhood with an HOA. The HOA is established at the time the neighborhood is built to maintain the neighborhood standards on behalf of those who choose to live there. When you purchase the home, you are accepting the HOA's CCR' (Covenants and Restrictions) or "Rules and Regulations" along with it. That said, I'm curious as to why any HOA would feel a need to regulate the type of flooring someone uses in a single family home.
Flag Tue May 30, 2017
The main goal and purpose of any HOA is typically to support the property values and upkeep of amenities for a specific neighborhood area. This usually involves maintenance and upkeep of common ground areas (such as the neighborhood entrance areas) and any neighborhood amenities (neighborhood pools, walking trails, play areas, etc.)

Most HOA's will also look to enforce a baseline of upkeep and appearance by individual homeowners, to avoid problems associated with neighborhood blight or degradation. Like it or not, one poorly kept home on a street can drag down the property values of other homes in the same area. No one likes living next to a trash pit. And even if there were no HOA around to tell a homeowner how to properly maintain their property, most areas have city or county ordinances that set forth requirements and restrictions for property use and maintenance as well.

It is also true that some HOA's have very high standards when it comes to appearances. (to be con't)
Flag Tue May 30, 2017
Gloria Jean &…, Agent, Atlanta, GA
Mon Dec 14, 2015
I highly advise your obtaining a copy of the Condominium Documents from the seller or Homeowners Association as well as the latest financial statement for the community. You don't want any surprises after closing.
0 votes
Tammy Hayes, Agent, Port Charlotte, FL
Thu Oct 21, 2010
Ownership of a property

A freehold estate is an estate involving ownership. There are two types of freehold estates - fee simple and life estate.

In a fee simple estate which means you have 100% ownership, there are four ways it can be held.
1. estate in severalty - sole ownership
2. tenancy in common - held by two or more persons. Each person has undivided interest in the whole property. All owners have equal rights.
3. joint tenancy - shared by two or more persons that must have equal and undivided interests.
4. tenancy by the entireties - an estate for husband and wife only.

A life estate is created when an owner of a fee simple estate conveys ownership to another, but only for the balance of the lifetime of the party to whom the property is conveyed.

Seek advice of a real estate lawyer in order to determine which type of estate you would like when owning a property.

Tammy Hayes, Realtor, Sandals Realty, Punta Gorda, FL
0 votes
Solomon Gree…, Agent, Duluth, GA
Thu Feb 12, 2009
Thought you might like to see a comparison against other forms of ownership.

The forms of ownership affect how real property may be re-conveyed later, so knowledge of the forms of ownership is important. Ownership interests, or estates, in real estate may exist in a number of ways.

1. A fee simple estate is absolute, unconditional ownership with freedom of disposition and is the highest level of interest recognized by law, subject only to government restrictions.
2. An estate on condition is limited by some condition requiring performance before an individual is granted absolute ownership.
3. A life estate is extended during the life of a person but terminates upon that person’s death.
4. An estate in remainder indicates that the owner of the remainder interest in the property will enjoy the ownership only after another estate ends or at some time specified in the future.
5. In an estate for years (also known as a leasehold estate), an owner conveys interest in land to another person for a fixed or determinate period of time.
0 votes
Lee Taylor, Agent, Decatur, GA
Thu Feb 12, 2009
Can't beat those answers.

ConnieS - how fee simple ownership will affect you is dependent on many factors.

As it relates to fee simple townhome ownership, Laurie's answer is clear.
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0 votes
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