Condo or zero lot line property?

[Don Clark]

8)

Tom:

Great post. I can understand the confusion. The post on this forum are a microcosim of the problem. I believe, and will continue to believe that it is a very simple issue. A condo is a form of ownership, not archetecture. However, it is often, as you point out, confused by realty agents, assessors, and court house staff. In my case, i bought a townhouse in kitty hawk. The agent listed it as a townhouse(he built them), but called it a condo. The town records in Kitty Hawk have them as a townhouse but some of their staff refer to them as a condo. The appraiser who did the appraisal, thank God, knew the difference. To make matters complicated we have a common roof on both buildings(15 units total), and we own only the footprint land site. The rest is common area owned by the HOA in which we all have a common interest. The association(I am on the BOD) takes care of yard, street, exterior lighting, swimming pool, etc. Now, to some that sounds like a condo. Ah :idea: But wait. It is legally titled as a townhouse, not a condo. My personal experience with the board is that many of the members lack personal competence in the markets that they have oversight of. The investigators lack the same competence. If not for one lone board member in the meeting I attended, an appraiser would have been sanctioned. That one board member understood the issue, a local issue, before the board. That really is poor. It would be far better to hire local, competent appraisers to do a STD-3 review and submit his/her findings to the board on a complaint. The board could ask for a blind review of the appraisal(name, address of appraiser withheld), pay the appraiser for the review. The appraiser could be commissioned on a case by case basis as a consultant. To send untrained, incompetent investigators into a market makes little sense. Just as an example, I have over 12 years of experience and expertise in doing appraisals in Knotts Island and Gibbs Woods, North Carolina. I have had to reappraise several properties that were appraised by an appraiser out of Edenton and Elizabeth City, many miles away. There were very important things about these two isolated areas that were never mentioned. Ah, but I digress.

Major point-----A Condo is a form of ownership. It may or may not include ownership of land. Depends on state law, and what is approved by state in the Condo Doc's. BTW, we have several major hotels where each room is a condo unit. Public does not know that. GP owns 1/3, 2/3 owned by investors. Just another condo style I thought I would mention.

Don

 

[Dee Dee]

I usually look at the same way that Will does...if it's unit and building #'s or if it has 'Condos' or 'Condominiums' anywhere in the legal description, it's a pretty safe bet that it'll go on a condo form. Don't think I've ever run across an exception to that rule in this area.

 

[wyecoyote]

Gee didn't think this was going on for so long as a discussion. However, this is what I found. In washington state the Laws state that a condominium may own the interior of the structure and an undivided intrest in common grounds. They can not own a "lot" therefore, the subject is a attached zero lot line property not a condominium.

Ryan

 

[KD247]

Wow, talk about confusion!

Condominium ownership includes: A severally owned unit (air space only) plus an undivided interest in jointly owned grounds and buildings.

PUD ownership includes: A severally owned site and structure plus an undivided interest in jointly owned common grounds and buildings.

That's my take on it. Am I wrong? Are there exceptions to these rules? Is it different outside of California?

Finding examples of the confusion is easy. There are many properties in my area labeled as "condominium" on the Recorder's map that are actually PUD's. Some agents call any attached structure a condo and any detached structure a PUD.

If there are clearer or more precise definitions of Condominium and PUD ownerships - pleeeeeeze share them with me.

I made it through all 32 posts - Where do I apply for my 11 minutes of continuing education?

 

[Anonymous]

Tom, good post. How about this. Tom, in Buncombe county, the tax department lists all attached units as condo's with no land. One must use the recording doc's and plats to determine what the development is. In the case of the "townhouse condominiums" I guess the appraiser should have read past that to see if the unit owners owned the lot and checked the plats. I would love to slap the person who wrote that doc. I believe this has been a good thread as it will make those who havent read their states law go find it. In my area, I have all ready researched all of the existing developments and have their data on file. When a new one is started, I go get it.

Here is another question to be posed. Would you use comparables from a townhouse development for a condo subject? Suppose you are doing a high quality condo, and have selected 2 or 3 comps from its development. Across the street there is a similar high quality development of attached units, yet it is actually a townhouse or a PUD. Would you use them as comps?

My answer is yes I would. Since we are measuring market reactions to properties and how buyers react, I have talked with several brokers who specialize in attached unit sales. They state that the typical buyer doesnt care if they own the land or not. They look at the units and the development as a whole. We have the senario described above in my area and the two developments are highly competitive for buyers. Agents tell me that buyers look at both and usually make offers on one or the other, based on their preference of the units layouts and the developments.

What would you all do?

 

[bradellis]

Tom,

A very good example of why I have been advocating federal licensure only, and taking it out of state hands.

That being said, I am told that the NCAB is one of the best around. Pity it took them so long to figure out such a basis thing as form of ownership. Perhaps they need better investigators, but to be fair, we do not know what these folks were faced with either.

Brad

 

[Pat Butler]

Here in Illinois even townhouses where the owner owns the underlying land will sometimes have a recorded declaration of condominium. That's because there's no such legal ownership in our state known as a 'townhome.' If you read the declaration of condominium for a townhome it will be very similar to what you would see for a condo, but it will mention the ownership of the underlying land (footprint) and possibly joint ownership of other common elements, and limited common elements. I had to confront this issue years ago as a real estate broker who was selling REO properties. We had acquired about twenty unit in a townhouse project where we had to figure out all of the ownership details from scratch. The lender provided us with an excellent real estate attorney and we dealt with these same issues. What you have to remember with property ownership rights is that sometimes they can't be neatly labled. That's why sometimes the only way to adequately describe the form of ownership is to quote directly from the title report, deed, etc. Lenders usually want to have us check a box on a form, but many forms of ownership don't fall neatly into one category but are a combination of multiple forms of ownership.

 

[Tom Hildebrandt]

Bradellis

Who has told you that the NCAB is the best around? You need to read the Improving the Profession Forum. The NCAB is the leading board in the negative realm.

They do some things well. They are proactive in the area of mortgage lending fraud.

They are abysmal in others. They have low levels of understanding of USPAP. At a recent hearing, the board investigator said that if you used a hypothetical condition or an extraordinary assumption, the report was either limited or restricted. In another hearing, the investigator stated that there were only two reporting options, complete and limited. In another hearing, one board member said it was a USPAP requiremnt to put the page references for Marshal and Swift in the cost approach.

Their disciplinary process is a farce. They are very proactive finding appraisers guilty of bad work product, but the charges are based on subjective issues which are never proven. The investigators who are appraisers seldom do standard three compliant reviews, but they freely express opinions as to the merits or lack thereof of the appraisers work product. Given the proven limited ability of the NCAB to assimilate USPAP and typical appraisal practice, it is no wonder that the investigators work product is so poor.

The board appointments are purley political, and have nothing to do with the members appraisal competence or judicial bearing.

In short, the NCAB talks a great game publically but on examination, their work is inferior and often is an embarrasment to the profession.

Regards.

Tom Hildebrant GAA

 

[bradellis]

Tom,

I did not say they were the best around- only that they were supposed to be one of the best. Comes from folks nationallly who have looked at these things.

Clearly, some of that data is not true based upon your info. So, thanks-

And again, it supports my position thqat licensing shold be federal.

Brad