The many faces of condominiums and various management structures − The Danish case

• Published in: Land use policy 2022-09, Vol.120, p.106273, Article 106273
• Main Authors: Madsen, Morten D., Paasch, Jesper M., Sørensen, Esben M.
• Format: Article
• Language: English
• Subjects: 3D property right; Condominium; Hållbar stadsutveckling; Mixed ownership; Mixed-use development; Owner apartment; Second-generation condominium legislation; Sectional title; Sustainable Urban Development; Two-tier governance
• ISSN: 0264-8377; 1873-5754; 1873-5754
• DOI: 10.1016/j.landusepol.2022.106273

The concept of condominium in Denmark is traditionally associated with owner apartments used for residential purposes (individually owned by the resident). The condominium law translated from Danish: “Law of owner apartments” was primarily intended to support the housing market and was mainly introduced to allow renters to become owners of a rental apartment in a high-rise building, i.e., making it possible forthem to enter the housing market without having to invest in an (often more expensive) traditional house on a real property. However, the law also applies on other nonresidential rooms in a building, thus the expression, many faces, is appropriate. The ownership right to a condominium unit includes a share in all components of the common property. This share also includes the responsibility to pay for common expenses regarding the common components. In traditional high-rise (single-use) buildings the common components of the condominium property include e.g., the outer walls, roof, cellar and a staircase or an elevator. Because of the nature of (single-use) buildings it is often fair to say that all condominium units have an equal benefit of the common components. Thus, it is regarded as being fair that all condominium units contribute to expenses to maintain and renew those common components. Therefore, the condominium law is partly designed to support this benefit-all principle, and the allocation of rights and responsibilities is done mainly by using a co-ownership share, where each condominium unit’s share is calculated using the relative value and size of each condominium unit. The benefit-all principle does not consider the actual benefit of each condominium unit. However, the rise of mixed-use developments in Danish urban planning has made it necessary to further develop and customize the allocation of ownership rights in such mixed-use condominium schemes in order to specify the allocation of ownership rights and responsibilities of common components, mainly because it is not fair to accept that all units have the same benefit of the common components. Based on four case studies all representing mixed-use condominium developments we analyse various management structures used in Danish practice. In our conclusion we propose that condominiums are used broader than original intended for various non-residential purposes and in mixed-use developments. The effect of this, is more complicated condominium schemes that require a customized management