Fee Simple VS Condo Fee Simple --- for a townhome ?

[glenn walker]

Hello... seeking your input & thoughts; builder's sale office is telling me ownership is CONDO Fee Simple while I think it's FEE SIMPLE

Here's the scenario:
- appraising a 3-story new construction townhome [one of first units built] within a larger "PUD-like" community/village consisting of 4 phases and the following types of properties/units
a) true stacked "condo" units (i.e. block appears like townhomes from outside, but there are 2 separate units - one on top of the other - and each having separate accesses, etc.)
b) 3-story townhomes (rows/blocks of 4-5 attached & semi-det units)
c) mixed-use buildings (comm on ground level with resid rentals above)
d) misc. comm pad sites
e) 3-4 story apartment buildings
- only residential units are in process right now... rest of community yet to be built; so for resid units... the first appraisals (incl mine) will be "the dominos" / benchmarks for establishing value for subsequent units that are built --- which is why I need to be careful in identifiying what I'm working with and need to make sure the correct "property type" is identified, the correct form is used, etc.
- builder's lender provided "Offering memo" (draft / yet to be approved / unsigned copy) indicating that community is to be under a master condo assoc; however - although I'm no legal expert - a general read of it shows clear conflicting definitions, etc. and the language appears to directly contrast with how the 3-story townhomes are assessed by the muni (i.e. similar to typical residential props, the 3-story townhomes each have their own sites)
- bottom line is that Buyers of the 3-story townhomes will 1) own their individual lots (+/- 3,000 sf) on which their homes are situated, 2) own and are responsible for maintaining the roofs/exteriors of their dwellings, and 3) own the space between the walls; they will also own an undivided interest in the common elements

Given the above --- by definition relative to the bundle of rights --- aren't the 3-story townhomes FEE SIMPLE ownership (i.e. within a PUD -> and having a shared interest in the common elements ) rather than CONDO-FEE SIMPLE?

What do you think?

Thanks in advance for your input

You are correct , a PUD never has anyone above them because on a PUD you own the lot in fee that your property sits on. On a Condominium you do not own the land in Fee but along with how many other owners are sitting on it and thats why a Condo project and go 50 stories high but a PUD cannot, can only have its own floors above the ground and thats its rare to see one go higher than three levels. As far as a Townhouse or Town home that is a design and has nothing to do with the form of ownership. 95% of all Realtors think if something is attached and if it looks like a Condo that its a Condominium, because they cannot differentiate the difference they both are a different form of ownership. If =-it's still a debate ask the lender for a copy of teh Title Report it will clearly say Condo or-have a PUD rider attached.

 

[glenn walker]

There are ‘site condos’ in where the property is a condominium per the condo declarations but they own the underlying land. You need to read the condo declaration.

If these are site condo's-then its form of ownership is Condominium - A site condo is where a developer in order to save money does not have to subdivide each individual lot. Unfortunately 90% of the buyers and owner dont realize what they own. The OP needs to clarify if this is a site condo ?

 

[TJSum]

It could also be both a PUD and Condo. These end up paying two fees, a condo fee and a PUD fee. Sounds like a site condo to me located within a larger PUD.

 

[Terrel L. Shields]

he's describing common ownership (i.e. undivided interest) in the 'green areas' and common elements - not in the land under the home.

So OK, let's find out.

ppraising a 3-story new construction townhome

Is this a CONDO with all common elements? Or, does the residence own the FOOTPRINT under the home...i.e- that is fee simple. like this.

Our local Realtors love to call these "condos" but they are not - they have ownership of the footprint of the house, porches and garage.

 

[NJAPRAZE]

Update -- I read thru the offering memo, definitions, etc.; for whatever reason... they chose condo fee simple for entire community (made up of various housing types). The offering memo defines each unit... and clearly states that the 3-story townhome includes ownership of the site (which conflicts with the state's definition of a condo - also included in the memo). Thus -- there apparently is such a thing as a "site condo"! Will certainly be interesting to do the SCA grid with a site and associated adjustments for a condo, for direct ownership of their site + an undivided interest in common elements = higher contribution value [attributed to the site] than a typical, comparable "condo" unit (i.e. attributed to "enhanced" bundle of rights and potentially less imposed community restrictions).

 

[Dublin ohio]

Have never heard of an attached site condo. Every definition of a site condo I have seen is for a detached free standing unit.

 

[nstanbru]

Might be too soon to get it yet, but it is what the legal description says it is. You really need to see the actual legal description for the property you are appraising.

 

[NJAPRAZE]

Might be too soon to get it yet, but it is what the legal description says it is. You really need to see the actual legal description for the property you are appraising.

It came down to legal structure in the offering which defined what weach "unit" encompassed...

 

[sputnam]

Artemis is correct. Condominium is a type of ownership.. NOT a style of building.

 

[Mark K]

It could also be both a PUD and Condo. These end up paying two fees, a condo fee and a PUD fee. Sounds like a site condo to me located within a larger PUD.

I owned a couple of condos for rentals in the past. I had monthly condo fee and an annual PUD fee for the overall subdivision. $175/month and $450/year.