What Is An Airspace Condominium?


The definition of an Airspace Condominium was once a simple thing. Today, when someone asks “What Is An Airspace Condominium?” the answer will begin with a deep intake of breath, a sigh, and a roll of the eyes. Why? Because of the wording in a new piece of legislation being adopted in some parts of the country.

What Is An Airspace Condominium? When you purchase a condo, you don’t buy the physical structure of the building. Instead, you own the airspace between the walls, ceiling, and floor, hence “airspace condo.” It could also mean a block, or blocks, of air above a plot of land on which a condo association has been formed but were units, have yet to be built.

I live, sleep and breathe real estate, and it still took me a few attempts to turn all of the new legal mumbo-jumbo into a simple non-legal explanation that anyone could understand.

What Is A Condominium?

Many people are under the impression that a condo is a physical style of self-contained unit, within a building.

A condominium is actually a style of ownership where a more substantial property is divided into individual units and sold. Alongside the unit, the homeowner will also own an “interest” in common areas which are controlled by the condominium management committee. When the developers first begin work on a building or complex, they form the not-for-profit condominium association to establish the development as a condominium, legally. Then once they have sold 50% of the units, control of the association is handed over to the residents.

As a result, at least in theory, any size, type or style of building can be a condominium.

Remember those words in bold.

They’re important later.

What Is An Airspace Condominium?

For many years, professionals in the real estate industry used the term “airspace condominium” to refer to a condo with a particular ownership arrangement.

I have discussed elsewhere on the site, how condo ownership is structured and what you actually own when you purchase a condominium unit. While for most purposes it is enough to say that you own “the condo,” from a legal standpoint what you own actually depends on the specs set out in the Homeowners Association’s “Declaration of Covenants, Conditions, and Restrictions” (CC&R’s).

The details around what is, and what is not, a condo unit vary.  In every condominium, there are privately owned units and communal areas, along with an HOA to manage the building or complex.

The “Original” Airspace Condominium Definition

However.

Each HOA can set its own rules as to what constitutes a condo unit, and there are no nationally recognized standards to say how the boundaries of a condo unit should be defined. Then again, how different can they be?

You’d be surprised.

Here are some of the definitions I have seen. I’ve taken the liberty of, shortening, simplifying and translating them from “committee speak” into a simple, understandable alternative. Different CC&Rs, around the country, have defined a unit in their condo as:

  • Extending into the unit from the surfaces of the inward facing wall studs, the upward facing floor joists and the downward facing ceiling supports.
  • The area is shown as unit X on the blueprint, with the boundaries of the property beginning at the halfway point between each unit.
  • From the outward facing surfaces of the drywall, floors, and ceilings.

However, the most common definition, one that can be used if the HOA has not specified the boundaries is:

“If walls, floors, or ceilings are designated as boundaries of a separate unit, the interior surfaces of the perimeter walls, floors, ceilings, windows, doors, and outlets located within the separate unit are part of the separate unit…”

Followed, later in the definition, by

“The property owned by an owner consists of the block of airspace created by the interior, unfinished surfaces of the unit’s perimeter walls, floors, and ceilings. Using this structure, the owner would own the paint on the walls and ceilings, and any finishes placed on the floor, as well as the block or “cube” of airspace located within those boundaries and any improvements located within that airspace.

This is what is generally understood to be an airspace condo.

Why Does This Definition Matter To Me?

As an owner or potential buyer, the exact definition of where your property begins and ends has an impact on repairs and maintenance. Both you and the HOA need to know where your responsibilities start and end. For instance, in the example above, which defined the condo as beginning at the halfway point between units, the owners on each side of the wall are responsible for the insulation. However, in an actual “airspace condo” this area would be considered part of the communal interest and as such would be the responsibility of the HOA.

The “Other” Airspace Condominium

States across the country are adopting new legislation which has been developed by the Uniform Law Commission.

What Is The Uniform Law Commission?

The ULA, also known as the National Conference of Commissioners on Uniform State Laws, is a non-profit, bi-partisan association. It was created in 1892, and the ULA website provides this description of their membership and purpose:

“ULC members must be lawyers, qualified to practice law. They are practicing lawyers, judges, legislators, and legislative staff and law professors, who have been appointed by state governments as well as the District of Columbia, Puerto Rico and the U.S. Virgin Islands to research, draft and promote enactment of uniform state laws in areas of state law where uniformity is desirable and practical.”

States do not have to implement any of the draft legislation that the ULA develops. However, many choose to.

What Condo Legislation Has The ULA Developed?

The ULA has drafted a number of “condo laws” and the most widely adopted are:

  • Uniform Common Interest Ownership Act (UCIOA): Adopted in full by nine states the UCIOA is a basic law which covers the creation, management, and termination of condominiums, planned communities, and co-ops
  • Uniform Condominium Act (UCA): Adopted in full by 14 states this legislation “contains comprehensive provisions for creation, management, and termination of condominium associations, including point-of-sale consumer protection.”

The other States, which have not formally adopted either of these Acts have their own laws in place. However, these State laws have strong similarities to the UCIOA and the UCA.

OK, the boring legal bit is over.

Thanks for hanging in there.

Why Should I Care About Any Of This Boring Legal Stuff?

As I said, initially the term “airspace condo” was used to describe an individual, privately held unit, within a wider condo. The title to the “airspace condo” does not include the floor, ceiling, or walls which separate the unit from the neighboring units.  Instead, the entire structure of the building, including the walls, floors, and ceilings of each privately owned condo, are classed as “common elements.” In the new Uniform Law Commission Acts, the term “air space” is no longer used as part of the definition of an individual condo unit.

The “Other” Airspace Condominium (finally)

When a developer buys an extensive parcel of land they may not want to, or be able to, develop it all at once. Previously the developer would create a condominium association for the chunk of land on which they were currently building.

This was done because a declaration, the document which founds a community association, must detail which parts of the condominium are privately held and which are common elements.

Developers, generally, do not go through the building permitting process for an extensive parcel of land all at once. Instead, they get permission for one piece at a time.

This means they cannot say which elements of the original, larger parcel of land will be private and which will be common because they do not yet have the approval to build on the rest of the property.

So, as they move from chunk of land to chunk of land, within the original, larger parcel, they form new condominium associations for each phase. This means that for more extensive developments there can be a patchwork of associations, one created for each phase, which in turn causes issues over what to do with roads, pathways, etc., that each association uses, but for which none are responsible.

Now, because the new legislation does not require, a developer to detail the boundaries of what is private and what is a common element, they can designate an entire unbuilt plot as a condominium, before gaining detailed development approval for each phase.

They do this by using “Airspace Condominiums” which are quite different from the original definition.

They work like this:

Cubes, As Far As The Eye Can See

Imagine a house sized rubrics cube. Now imagine several thousand of them laid out in a grid across the developers original, extensive parcel of land. Not only are these cubes set out horizontally, but they can also be piled vertically, and can go as high as the local building bylaws allow.

Each of these cubes can be designated as an “airspace condo,” and everything within the cube belongs to the unit owner. There does not have to be any structure or plan for a structure within the cube.

Therefore, an air space condo is nothing but a block of air which may or may not:

  • Contain some of the lands at ground level.
  • Have any structure in, on, or around it.
  • Be approved for development
  • Allow the owner to obtain a loan secured against their property

As a result, we are now seeing “condo subdivisions.” I know of one where each private unit is a single family home, some of which are over 5000sq ft sitting on a single plot of land. They are legally condos because a condominium association was formed by the developer and each individual unit is privately owned, and each titleholder also holds an undivided interest in the developments common areas. These are the ground between the plots, sidewalks, parks, etc.

 

The Last Word

Until recently when real estate professionals and property developers spoke about an “airspace condominium” you could be confident they meant a physical unit, within an existing building. The floor, walls, and ceiling of this unit did not belong to the owner. Instead, they owned the airspace contained within the floor, walls, and ceiling.

However.

New legislation being adopted by many states, allows developers to found a new kind of condominium association which does not require the specific details of the common and private areas of the development. This allows for the creation of blocks of air on which there may or may not be a physical building, development approvals, or even plans for a structure in the future.

 

Geoff

Geoff Southworth is the creator of RealEstateInfoGuide.com, the site that helps new homeowners, investors, and homeowners-to-be successfully navigate the complex world of property ownership. Geoff is a real estate investor of 8 years has had experience as a manager of a debt-free, private real estate equity fund, as well as a Registered Nurse in Emergency Trauma and Cardiac Cath Lab Care. As a result, he has developed a unique “people first, business second” approach to real estate.

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