Academy/HOA & Community Association 101
HOA vs condominium vs co-op
Same legal umbrella, three different ownership structures.
"HOA," "condominium," and "co-op" all describe common interest communities, but they structure ownership differently. Condo owners jointly own common areas as tenants in common. In a typical HOA-governed planned community, the association itself holds title to common areas. In a co-op, a corporation owns the whole property, and members hold shares and a lease, not a deed.
One legal category, three shapes
"HOA," "condo association," and "co-op board" sound like three different things, but they're all handling the same underlying deal. Each is a common interest community: real estate described in a declaration where owning a unit or lot obligates you to pay a share of taxes, insurance, maintenance, or other costs tied to shared property. That obligation, not the building type, is what makes something a common interest community in the first place.
"real estate described in a declaration with respect to which a person, by virtue of the person's ownership of a unit, is obligated to pay for a share of real estate taxes, insurance premiums, maintenance or improvement of, or services or other expenses related to, common elements, other units or other real estate described in that declaration."
Source: Nevada Revised Statutes Chapter 116, Common-Interest Ownership (Uniform Act), NRS 116.021, Nevada Legislature
This wording follows Nevada's codification of the model-act structure; other states define the category with similar substance but different numbering. Check your own state's statute for its exact definition and section numbers. The three subtypes below (condominium, cooperative, planned community) are just different ways of structuring who owns what inside that same umbrella.
Three ways to structure ownership
A condominium is a common interest community where you own your unit outright, and the remainder of the property (halls, roof, grounds) is owned jointly by all the unit owners together. A cooperative flips that: a corporation owns the entire building, and what you actually hold is stock plus a proprietary lease, not a deed to real property. A planned community is everything else, defined by exclusion: it isn't a condo and it isn't a co-op. Most subdivisions of single-family homes or townhomes fall here. You hold a fee-simple deed to your lot, and the common area (the pool, the entrance sign, the retention pond) is owned separately.
| Type | Unit or lot ownership | Common area ownership |
|---|---|---|
| Condominium | Individual deed to the unit | Jointly owned by all unit owners, as tenants in common |
| Planned community (typical HOA) | Individual deed to the lot | Owned by the association itself, under a recorded deed or plat |
| Cooperative | Shares plus a proprietary lease, not a deed | Owned by the corporation itself |
Who owns the common area (this is the part people get wrong)
This is the single clearest legal difference between a condo and a typical HOA subdivision, and it's also the most commonly misunderstood. In a condominium, unit owners own the common area collectively, as tenants in common. In a typical subdivision HOA, the association itself, a separate legal entity, holds title to the common area. You, as a lot owner, don't hold a fractional deed to the pool or the clubhouse. The association does.
"The typical subdivision has a common area that's owned by the HOA by virtue of a recorded deed or plat."
Source: State Bar of Texas real estate section article on common area ownership, State Bar of Texas
The distinction is not trivia. It's exactly why mortgage lenders classify these projects differently for underwriting. Fannie Mae, for example, defines a planned unit development as a project with common property "owned and maintained by an HOA for the benefit and use of the individual PUD unit owners," and treats condo, co-op, and PUD projects as separate loan categories.
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
A new board member says, "Our subdivision owns its common areas the same way a condo does, jointly by all the owners." What's actually true for a typical HOA subdivision?
You're buying into a building where you'll receive stock certificates and a proprietary lease instead of a deed. What type of community is this?
Which of these is true of all three, condo, planned-community HOA, and co-op, no matter which one you live in?
Sources
- Nevada Revised Statutes Chapter 116, Common-Interest Ownership (Uniform Act), Nevada Legislature
- Selling Guide, B4-2.1-01: General Information on Project Standards, Fannie Mae
- Common area ownership in condominiums and subdivisions, State Bar of Texas
HOA & Community Association 101
Next, see exactly what an HOA does and doesn't hold title to: What does an HOA actually own?
Whether your community is legally a condominium, a planned community, or a cooperative, and the exact statutory definitions and section numbers that apply, is set by your own state's statute and your recorded declaration, not by what your community calls itself day to day.