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CONDOMINIUM AS FORM OF REAL ESTATE INVESTMENT

By Sabiiti Herbert

MBA,BBA,MUK

 

CONDOMINIUM AS FORM OF REAL ESTATE INVESTMENT

A condominium is one of a group of housing units where each homeowner owns their individual unit space, and all the dwellings share ownership of areas of common use.

 

The main difference in condominium and regular single homes is that there is no individual ownership of a plot of land. All the land in the condominium project is owned in common by all the homeowners (Liu, 2006).

 

According to many scholars, the concept of condominium is quite old. Albert Ferrer (1967) states that “there is at least one record of the sale of part of a building, in ancient Babylon (modern Iraq), during the First Dynasty, nearly two centuries before the birth of Christ”, and that there is evidence of the use of condominium system among the Greeks, Egyptians, and others. Lipman (2012) traces the history of Condominiums in Europe at the turn of the 20th century and noted the major economic reforms in Europe in the early the 1990s, ushered in two major initiatives relating to housing, the first being the end of widespread central government control and subsidization of housing production and allocation, and secondly the increase in the range of choices available to citizens in the location and quality standards of their housing. This resulted into housing privatization by the transfer of ownership of the multifamily housing stock from the state to the apartment tenants, together with the responsibility for maintaining and operating the buildings.

 

Tsenkova (2005) specifically evaluated the factors affecting the development of new home owners under the condominium arrangement in Europe and noted that condor owners were required by law to assume management responsibility for their buildings, but very rarely had the financial, legal or technical skills to fulfill their obligations and continue to face problems such as unclear delineation of their rights and responsibilities, lack of meaningful choices in contracting for management and maintenance services, and inadequate financial resources to make needed repairs or undertake renovations of their apartment buildings thereby frustrating the objective of condominium in urban development.

 

In Africa Wilson (2007) notes that there has been a significant increase in the number of mixed-use condominium projects featuring a combination of retail establishments, offices, or other commercial uses along with the traditional elements of a residential condominium development. The increasing scarcity of land, urban revitalization, and the increased focus on smart growth made most cities in Africa to resort to a combination of higher density residential condominiums and integrated retail and commercial uses as a very efficient solution to housing challenges.

 

Uganda, faced with similar housing and land scarcity challenges in many uprising urban centres and specifically in the Central Business District of Kampala, adopted a condominium property Act 2001 to provide for the division of buildings into units and common property; to provide for individual ownership of those units by issuance of certificates of title in relation to the units; to provide for ownership of common property by proprietors of units as tenants in common; to provide for the use and management of the units and common property and for other connected matters. However the anticipated provision of office space in the city with the coming into force of the condominium Act, 2001 leaves a lot to be desired.

 

_Extracted from my MBA (2012) academic research paper 2012_

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