American Institute of Certified Planners (AICP) Practice Exam

The legal arrangement in which a dwelling unit in an apartment building is individually owned but common areas are maintained by an organization is called?

1. Eminent domain

2. A condominium

3. Cluster housing

4. A planned unit development

The correct answer is: A condominium

The correct answer is a condominium. In a condominium arrangement, individual units within an apartment building are owned by separate individuals, while the common areas—such as hallways, pools, and lobbies—are collectively owned and maintained by a homeowner's association or another managing organization. This structure allows owners to have private ownership of their living space while sharing responsibility for the upkeep and maintenance of communal facilities, creating a balance between individual ownership and community living. In contrast, eminent domain refers to the power of the government to take private property for public use, with compensation provided to the owner. Cluster housing is a type of residential development where homes are grouped closely together, often sharing common open spaces, but it does not specifically define ownership structures like a condominium does. A planned unit development (PUD) involves a mix of residential and non-residential uses and can include various housing types and shared amenities, but it differs from the condominium model in terms of ownership and governance structure. Thus, the ownership and maintenance framework of a condominium is distinct and well-defined, making it the correct answer to the question.