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What is the history of condo law?
Section 234 of the 1961 National Housing Act allowed the Federal Housing Administration to insure mortgages on condominiums, leading to a vast increase in the funds available for condominiums, and to condominium laws in every state by 1969. Many Americans’ first widespread awareness of condominium life came not from its largest cities but from south Florida, where developers had imported the condominium concept from Puerto Rico and used it to sell thousands of inexpensive homes to retirees arriving flush with cash from the urban Northern U.S.
The primary attraction to this type of ownership is the ability to obtain affordable housing in a highly desirable area that typically is beyond economic reach. Additionally, such properties benefit from having restrictions that maintain and enhance value, providing control over blight that plagues some neighborhoods. Major American cities, including Miami, San Francisco, Chicago, New York City, Los Angeles, and Washington D.C., have abundant condominium development.
In recent years, the residential condominium industry has been booming in all of the major metropolitan areas such as Miami, San Francisco, Seattle, Boston, Chicago, Los Angeles and New York City. It is now in a slowdown phase. According to Richard Swerdlow, CEO of Condo.com, “You’re not going to see this giant overbuild again. It’s hard to imagine that you’d see in the next decade what we just saw. Real estate brokers and the developers were in almost a ticket-collecting mode. They were processing orders because there was so much business to go around. Now that sort of investor phenomenon has gone away.” He added, “That phenomenon has stopped.”
An alternative form of ownership, popular in the United States but found also in other common law jurisdictions, is the “cooperative” corporation, also known as “company share” or “co-op”, in which the building has an associated legal company and ownership of shares gives the right to a lease for residence of a unit. Another form is leasehold or ground rent in which a single landlord retains ownership of the land on which the building is constructed in which the lease renews in perpetuity or over a very long term such as in a civil law emphyteutic lease. Another form of civil law joint property ownership is undivided co-ownership where the owners own a percentage of the entire property but have exclusive possession of a specific part of the property and joint possession of other parts of the property; distinguished from joint tenancy with right of survivorship or a tenancy in common of common law.