Condo/Townhomes

[Joyce Potts]

This is why this is so confusing for so many

Wrong, Wrong, Wrong! Since when do condominimums not own the land??????

Hold this for the semantics thread, Fred. They own the land, just not 100%, and that's a difficult concept for many.

The UNIT owner does NOT own 100% of the footprint or lot/dirt directly underneath the improvement, but rather shares an interest in the collective ownership--as you said an indivisible interest in the land and common elements. That's why most legal descriptions for condos usually say Unit XX and not Lot XX.

Fred, lighten up on some of the new ones. This is a concept that still perplexes many experienced appraisers, I'm sorry to say.

I've also owned an office condo (building) where I bought the lot, and then built the building, but the legal read (UNIT). Ok, I bought a % of the common amenities <sigh>.

There are many who typically confuse architectural designs with ownership or zoning styles. Condos and duplex/tri's/quads.

How many can't walk past two attached single family properties and not automatically refer to it as a duplex because of the physical appearance?

:new_all_coholic:

 

[TC]

Thanks for the input, information, and for the mostly warm welcome. I think the best answer thus far, was the one I came to as well.

From TC.
I will say that do some leg work, knock on some doors, find the HO president, the on-site manager, talk to the agent, contact a fellow appraiser.

Hey, this guy definitely has potential, great 4th post, and no missspellings. I love this guy, his post was clear, concise, and cogent. (Bingham, cogent means convincing).

Ah, then again, he'll probably become a stinkin' review appraiser.

Ok, Mikew, here is a Geek of the Week tip on doing PUD/Condo developments. I recently appraised a PUD quad in a development that also had detached dwellings. I asked the on-site manager for total number of units. She was sure there were 20 quads, but not about the detached dwellings. So I grabbed her computer, went to Google Satellite maps, and we counted the houses. Damn, I'm a Geek.

TC

 

[Frederick R. Ruffell]

So now it is "Semantics" Joy???? give me a break. "perplexed"??? How about IGNORANT?
While I do remember a time when I did not know the difference between a condominium, a co-op, a townhouse, a P.U.D., a mobile home, a manufactured home, a modular home, etc.. I did know that at that time I had better find out BEFORE I accepted an assignment that delt with such things.

So what if it is this persons first time posting here, nobody ever cut me any slack when I first posted. I remember way back then that Wayne forced me to use my real name or get banned from the forum. Boy how things have changed.

 

[Don Clark]

The UNIT owner does NOT own 100% of the footprint or lot/dirt directly underneath the improvement, but rather shares an interest in the collective ownership--as you said an indivisible interest in the land and common elements. That's why most legal descriptions for condos usually say Unit XX and not Lot XX.


Joyce,

That's not true in all cases. In Virginia we have single family detached homes on their own lot's with 100% ownership of the lot, and they are condo's. Two Examples attached:



[URL="http://appraisersforum.com/redirector.php?url=http%3A%2F%2Frein.mlxchange.com%2F%23001"]

 

[Kevin Keck]

Anyway, needless to say, despite the realtor having multiple clients willing to pay much more then any comparable in a 2 mile radius could prove, (This is an densely populted area of Houston, (Galleria area, just outside the loop) I was forced to cut the deal, due to the fact that true condominiums comparables, were selling for 80k less that were very similiar quality wise, and similiar views. All of this is day to day life for an appraiser, except one major problem. Realtor's, LO's, and probably quite a few appraisers do not understand the difference between condo's and townhomes in this area. I spent a full day weeding through a ton of condo "comparables" that were in fact townhomes, and attempting to explain to all parties involved the difference between the two.


As far as comparable selection goes I think you really have to consider the best available purchase alternatives to the subject despite how the ownership is legally classified. As evidenced by your experience, it is clear that most market participants can't tell the difference therefore buyers probably aren't basing their purchasing decisions on this factor. Given the uniqueness of the subject property, townhomes may have been "comparable." I would not have ruled them out only because of legal ownership classification. That said, most of the time when folks throw comparables at you it is only because they are simialr in the value that they are "targeting" and not because they are more comparable.

 

[Pat Butler]

This is certainly an issue that is mostly state specific. But I'd think that ultimately there'd have to be something recorded somewhere that would precisely identify what you are working with.

Here in Illinois all condos have a 'declararation of condominium' recorded as one of the first documents in the chain of title. There are some variations on what an individual unit owner actual owns. Sometimes the unit owner has sole 'use' of collectively owned property, and that would be referred to as a 'limited common element.'

In our area it's also common for a property to be called a townhouse when it's similar to a condo, yet they own the underlying land. In other areas, the term 'townhouse' refers to a architectural style.

Assuming that there would had to have been some sort of legal documents filed somewhere in order to create this form of ownership, it seems that you need to access those. Does your client have a title report, or is that something that is different in Texas?

Whether or not the own the land would affect the type of insurance needed by everyone (unit owners and association). So the Mgt. Company who pays the insurance bill should most definitely know what they are dealing with. You might have to get the homeowner involved by having them produce documents that they should have from their purchase, or by having them place pressure on the Mgt. Co. to get your questions answered.

 

[Kenneth Reynolds]

A newbie can learn a great deal reading these threads.
I guess I really new that condo was a form of ownership and townhouse was a reference to a design "usually an attached two story" in my market.
But it really didn't sink in until Mike's post. A townhouse is really nothing more than an attached SFR with ownership of the dirt.
You can not believe how much more clear things are here than in many of the classrooms I've sat in.
Thanks all.

 

[Kenneth Reynolds]

Don
The two examples of condos that are detached SFR's that are not the ones that come to mind here in Florida really has me scratching my head.
Since someone other that the condo owner owns the land....what kind of ownership is involved?

 

[Frederick R. Ruffell]

Don
The two examples of condos that are detached SFR's that are not the ones that come to mind here in Florida really has me scratching my head.
Since someone other that the condo owner owns the land....what kind of ownership is involved?

OK, I don't know about other states but here in CA in San Diego County, I sometimes have to look a 4 different items before I can determine if a particular property is or is not a Condominimum.

MY First step is to look at the 10 digit APN. IF the last 2 digits are 00 then I am 98% sure the property is NOT a condo. If the last 2 digits are anything but 00 I am 98% sure it is a condo.
My second step is to look at the assessmentfor that APN. If there is a 2 part assessment, Land and improvement, I become 99% sure that it is NOT a condo, if an Improvement assement only I become 99% sure it is a condo.
My third step is to look at the legal discription if I have one. If it consists of metes and bounds, or lot block and tract I am 99.999% sure it is not a condo. If there is a lack of those things and something like "Per US DOC xyz-123 and an undivided interest in lot 1...." I become 99.999% sure it is a condo or a Co-op (have yet to find a co-op in San Diego).
My fourth and final step (I call this one "the nail in the coffin") is to look at the plat. I always bring it to the inspection with me. If there is land associated with the property the plat will define it and label it with th APN. In the case of a condominium the larger parcel that contains the phase is defined and labled, and then off to the side or on a seperate sheet the building(s) are drawn and the individual units labled next to the building drawing. You just gotta look and know how to read it.


Now maybe I have it easy here in S.D. but I just don't know. At some point somewhere the property ownership has to be defined and the appraiser needs to know where and how to get it. Maybe you can try my method?

 

[Couch Potato]

Don
The two examples of condos that are detached SFR's that are not the ones that come to mind here in Florida really has me scratching my head.
Since someone other that the condo owner owns the land....what kind of ownership is involved?

Remember, a condo owner is part owner of all the land of the condominium; it's just not divided up. Most of the time, but not always, townhouse and detached style condominium units include rights to the land underneath that are defined as "limited common area." In practice, this is not distinguishable from "ownership" of the land with a townhouse or SFR in a PUD. The rights provide the same functionality in both cases.

One has to consult the declaration of condominium to see exactly how the unit and any limited common area is defined. It is not unusual at all in a townhouse owned as a condominium for the unit to extend midway through the wall and meet the adjoining unit. A unit owner that owns adjacent units might then be allowed alter the common wall. In other cases the same units may stop at the "unfinished surface" of the common wall. It is never safe to ***ume how the unit is defined in a condominium.