Condo vs Townhome: Is there a difference?

Townhomes and condos are sometimes confused one for the other but they actually differ in a number of ways. One of the most pronounced differences between a condo (or condominium) and a townhome (or townhouse) is that condos, much like apartments, include only the structure within the interior walls. A townhome, on the other hand, also includes the exterior of the structure, including the land that the building is sitting on.

The land on which a condo is located is the responsibility of the homeowners association (HOA), to which each residential unit owner is required to be a dues-paying member. The condo HOA is also responsible for the upkeep and maintenance of all hallways, common areas, the building's exterior surfaces and the roof. Townhouse owners are also subject to membership in their HOA, but typically the monthly dues they pay will be less than that charged by condo associations and rules regarding the individual residences are more flexible.

Other Differences in a Condo vs Townhome

Condos, similar to what you'd expect of an apartment, are “typically” single-story occupancies while townhomes are often two or sometimes three floors in design. Because of this, townhomes will normally contain quite a bit more square footage in the living area than a condo. While attached to a neighbor by way of one or two common walls, a townhome is much like a house in many respects. Think row house. Condo owners aren't free to adorn their unit's exterior as they wish and most HOAs will have specific regulations on this. Townhomes may be much more unique in their appearance when compared to the other, neighboring units. Plus, with an outside area belonging to the townhouse, owners may have their own garage, lawn, garden space, etc.

Insuring a Condo vs Townhome

Since a condo owner is only directly responsible for the space within the walls of the residence, with the homeowners association responsible for common areas, the building exterior (including the roof) and, basically everything else on the property, less insurance is needed by condo owners than typical homeowners, including townhome owners.

A condo policy, known as HO-6 insurance coverage, typically contains a clause covering the homeowner in the event that the HOA's master policy has an insufficient limit to cover a claim and owners are assessed an additional fee to cover damages. Townhomes are typically covered by HO-3 policies, just like most regular homes.