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Condominium Declaration and Definition

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Tejus

Member
Joined
Nov 1, 2002
Professional Status
Certified Residential Appraiser
State
Texas
When creating a condominium for detached units, can the Creator specify each unit will own their lot's land/improvements and have an equal shared interest in the common area(s)?

I thought the land was required to be a shared interest in a condominium.

I'm working on a "mobile home community condo". The original neighborhood restrictions included a min lot size of 2 ac. The mobile home developer wanted to have a higher home density, so he made 15 acres into a "mobile home community condo" with approx 0.5 ac lots. In his condominium declaration, he states each unit owns their lot's land/improvements and an equal share interest in the common areas such as an undeveloped park.

The Condominium's Owner's Association has been inactive. Potential sellers in the community have encountered problems selling because Lender's refuse to provide financing when the Owner's Assoc is inactive. There may also be issues related to the Condo setup. Cash sales have been made.

I've talked with several of the condo owners and neighbors. Most claim they own their lots, some claim this may not be correct for a condo.

The condo creation is an obvious scam to get around the original neighborhood restrictions. I'm trying to clarify if it was only unethical or if it was done improperly.

muchas gracias.
 

Joyce Potts

Elite Member
Supporting Member
Joined
Feb 6, 2005
Professional Status
Certified Residential Appraiser
State
Florida
Owner owns each lot? Own a common interest in the common areas = PUD.

Here's my initial take. You're right--it's a scam or close thereto, IMO.

There are multiple manufactured home projects in Florida where retirees buy the manufactured homes and pay RENT or condo dues on the use of the land.

Let me think--I'll have to go back and re-check but go look up Country Meadows in Polk County.

If only many of those retirees were made fully aware that they were not purchasing the fee simple interest, but came to a rude awakening when they found out they only had title to the manufactured improvement and a commitment for lot/site rent.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
Alan,

There is such a thing as a site condo where the homeowner actually individually owns some land under his unit, seperately from the common elements. I guess it's possible that this would be outlawed in some jurisdictions, maybe it is in Joyce's.

The definitive answer is in the Declaration of Condominium. If you are certain you have a true copy of that (from the jurisdictional planning department, not the owner/developer) then you have the info "from the horse's mouth". You must describe the elements of the subject just as they are in those legal documents.

For clarity, also get a copy of the deed.

I see nothing in your post to indicate a scam. If the planning department approved the Declaration of Condominium, then I would assume they are legal. If you think the department of planning has been duped, just ask them about it. But that does not change "what is" on your effective date.

There are many different configurations of ownership and of PUD arrangements. Almost all of them are designed to achieve higher density than would be otherwise permissible. The jurisdictional authority is usually happy to approve these plans because they get some other tradeoff, like more green space for example.

But regardless of anything else, you must report the ownership elements as they are described in a true copy of the legal documents.
 

jay trotta

Elite Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Connecticut
1st will agree with Marcia; the forms of Declaration's can be made to Fit a Town PZC requirement, or if there is not one already in place by the Town, the developer can have his/her attorney draft a Document to fit the needs of the association.

2-what do you mean by the association is "inactive" ? From what I've gathered over the years, during the "start up" process there needs to be a "Fidelity Bond" in place for Development - is it still in place ?

3-contact the attorney who drafted the documents of association and see what exactly is going on, and you need to know for Mortgage purposes.

Let us know how you made out, cheers
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
There have been two other threads on this same subject in the last two months. You should search the forum and you will find a varity of opinions on this subject. I still don't know if it is possible to own the land and it be a condo. Several appraisers on this forum in Michigan say they have those in their state. I don't know. We don't have anything like that here in East Tennessee.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
RSW,

If one has the legal documents in hand, it is not a debatable issue. A Declaration of Condominium is a legal document approved by the planning department.

Why would anyone reoprt something different than what the legal document says?
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
I guess it just goes against everything I have ever been taught in real estate and appraisals classes about condominiums. I've been appraising since 1986 and have never seen anything like that. I'm not saying they don't exist. Just that I have never seen one.
 

Tejus

Member
Joined
Nov 1, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Thanks for the comments and suggestions. I'll do the following:

- Document what I've found.

- Provide the condo related documents to the Client.

- State the condo mess resolution is outside the scope of the appraisal.

- Suggest the Client resolve the condo mess with an appropriate party.

- Make extraordinary assumptions where needed to complete the assignment.

- Document the extraordinary assumptions.

- Clearly state the appraisal is dependent on the EA's and the condo mess resolution.

- Move on.

buena suerte y buenas dias.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
RSW,

I've never run accross one in my market, either and when I first learned of them I was quite surprised.:flowers:

But I was not nearly as surprised about that as I have been about some other regional things I've heard about especially from this forum that includes appraisers from all over.

But the best thing I have learned here is to keep an open mind to facilitate my own education.

If I ever do run accross a site condo here, I'll understand it for what it is and not embarrass myself by arguing with the client or the homeowner. I'll know that before I get too skeptical I'll need to obtain true copies of the legal documents and be able to speak professionally about the subject property.:clapping:
 

Mike Boyd

Elite Member
Joined
Jan 18, 2002
Professional Status
Retired Appraiser
State
California
RSW,

If one has the legal documents in hand, it is not a debatable issue. A Declaration of Condominium is a legal document approved by the planning department.

Why would anyone reoprt something different than what the legal document says?

It is an issue of semantics that, apparently, differ from state to state. Even some planning departments can interpret the word "condominium" differently. In California, for example, a true condominium involves only the improvements, AIR SPACE where the condo is built, and a joint tenancy ownership of ALL the land. If in doubt, call a local title company.

Haha. Using your statement, I should DECLARE my home to be a condo and restrict residents to those members of the opposite sex who favor old white haired men.
 
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