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This website does not mention setbacks in its definition of a patio home. Also, searching for "what is a patio home" on Google doesn't mention the setback.
I am not a real estate expert but I think that a patio home does not always imply that the land is held collectively. In some locales (the Houston, TX area for example) patio homes are on small but individually owned plots of land (possibly with a zero setback on one side) with the goal of minimizing land costs and yard work while still providing free standing (no common walls) single family housing.
I agree. Patio Home does not require common ownership of the land. We develop patio homes on fee simple land. The definition should be a small lot (5,000sf or less lot size) single family detached home with limited yard space allowing for a patio and sufficient landscaping to soften the exterior or buffer adjacent homes or uses. The intent is to allow for a detached home with some level of privacy while minimizing exterior maintenance responsibilities of the home owner.
As a licensed real estate broker, I also agree this article has several flaws in regards to how a "patio home" is generally defined, at least in North American real estate terms. In general, we are (or should be) using this classification for detached single family homes on small fee simple lots, which may (or may not) also be clustered around a common patio area or a courtyard, but each homeowner also owns the land immediately under the home. The other flaw is that a true patio home would generally NOT share common wall(s) with other units. That is the classic definition of a townhome, or townhouse, and the two should not be confused.
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