Legal Definitions - horizontal-property act

A horizontal-property act is a state law that establishes the legal framework for creating, owning, and managing properties where individual units are owned separately, but share common facilities and land. These laws are primarily designed to govern condominiums and cooperatives, defining how ownership is structured, how common areas are managed, and the rights and responsibilities of unit owners and their associations.

Here are some examples illustrating how a horizontal-property act applies:

• Example 1: Developing a New Condominium Complex

  A real estate developer plans to build a new residential complex consisting of several townhouses and a shared clubhouse with a swimming pool. Each townhouse will be sold to individual owners, but all residents will jointly own and maintain the clubhouse, pool, and common green spaces.

  How it illustrates the term: To legally establish this arrangement, the developer must comply with the state's horizontal-property act. This act dictates the procedures for creating the condominium declaration, defining the boundaries of each individual townhouse unit, specifying the common elements, and outlining the structure and powers of the homeowners' association responsible for managing the shared amenities.

• Example 2: Converting an Apartment Building into a Cooperative

  The owner of an older apartment building decides to convert it into a cooperative. Instead of selling individual apartment units, the owner will sell shares in a corporation that owns the entire building. Each share entitles the buyer to occupy a specific apartment unit.

  How it illustrates the term: The conversion process must adhere to the state's horizontal-property act (or specific cooperative statutes often incorporated within it). This law would govern the legal requirements for forming the cooperative corporation, issuing shares, establishing the proprietary lease agreements for residents, and defining the rights and obligations of the cooperative board and its shareholders regarding the building's maintenance and governance.

• Example 3: Resolving a Dispute Over Common Area Maintenance

  Residents in a condominium building are experiencing issues with a leaking roof. The condominium association and some unit owners disagree on whether the roof is a common element (meaning the association is responsible for repairs) or if individual unit owners are solely responsible for the portion directly above their unit.

  How it illustrates the term: The horizontal-property act in that state would provide the definitive legal guidance. It would contain provisions that clarify what constitutes a common element versus a limited common element or an individual unit's responsibility. The act would outline the association's duties regarding maintenance, repair, and replacement of common elements, thereby providing the framework for resolving this dispute and determining who bears the cost of the roof repair.