how does one determine if property is a PUD or Condo?

[KJR2008]

I know this has been beaten to death, but there seems to be no concensus, I done a report on a condo form, and now the lender wants me to confirm that it is not a PUD and if it is change to the 1004, Is there a sure fire way of telling that the proprty is either a PUD or Condo.

 

[Jo Ann Meyer Stratton]

Depends on the laws in your state.

Here in Arizona there has to be a clause regarding a horizontal property regime in the CC&Rs for the subdivision; if there is one the subject is a condo.

If there is no clause and a mandatory home owner's association fee it is a PUD.

 

[VolcanoLvr]

Who owns the land & lot the dwelling sits on? The homeowner, or the HOA?

Did you check that before completing the report on a condo form?

Condo is a form of ownership. PUD is a form of management for maintenance & operating purposes, which may have an HOA.

Unfortunately, some PUD developments may have 'condo' in their legal description (like site condos) in order to establish a HOA for management and dues collection. But the actual ownership of the mortgaged property is held in Fee Simple because the land and dwelling are owned by by a private party, not the HOA. [There are 'condo' subdivisions out in my area that are actually PUD's. Attorneys who first wrote the property descriptions, CC&R's, and the legal descriptions are the ones who have caused the confusion. Some times state laws are not very clear.]

This confuses many U/W's, and some appraisers.

 

[Couch Potato]

Was the property built before or after January 1, 1994?

Once that is established, we can discuss the applicable law.

 

[Lee Lansford]

I know this has been beaten to death, but there seems to be no concensus, I done a report on a condo form, and now the lender wants me to confirm that it is not a PUD and if it is change to the 1004, Is there a sure fire way of telling that the proprty is either a PUD or Condo.

What's the wording in the legal description?

I suppose some areas of the country must be different from IL, because in IL, if the form of ownership is condominium, "condominium" is a part of the legal.

 

[3 Putt]

In our area, all condo's have unit # in the description and PUD's typically show a lot #.

 

[DWiley]

Is there a sure fire way of telling that the proprty is either a PUD or Condo.

In my area the only way to do that is to read the deed, and read it very carefully. Some units developed under our Horizontal Property Regime Act are condos and some are PUDs. It often comes down to the definition of "unit" in the deed.

Even then, it is often unclear. We have some units that are PUDs, but their legal description refers to them as a condominiums. We have done appraisals in several complexes where one closing attorney rendered the opinion that the units were condos and another attorney rendered the opinion that the units were PUDs.

According to Murphy's Law for appraisers, you will have to reprint the appraisal on another form no matter what steps you take to prevent that.

 

[Restrain]

A condo is a type of a PUD, but the level of maintenance, site ownership, etc varies from a typical residential neighborhood with a HOA. It depends on the docs. There are "site condominiums" where there is an owned site.

So, from a form viewpoint, if this is a "site condominium", which is a SF condo unit on an individual site, they want it on the 1004. If it is not a "site condominium", then you should use the 1073.

 

[Couch Potato]

A condo is a type of a PUD, but the level of maintenance, site ownership, etc varies from a typical residential neighborhood with a HOA. It depends on the docs. There are "site condominiums" where there is an owned site.

So, from a form viewpoint, if this is a "site condominium", which is a SF condo unit on an individual site, they want it on the 1004. If it is not a "site condominium", then you should use the 1073.

It is all about the documents used in creating the development. With less than one minute of research, I found the applicable laws governing the documents required for a condominium. Which one applies depends on when the condominium was constructed/formed, and the documents filed subsequent to construction/formation.

A Chapter 81 condo could be much harder to identify since the documentation can vary much more than a Chapter 82 condo, but then I don't have to tell you that since you actually appraise in Texas. :new_all_coholic:

 

[VolcanoLvr]

Couch...
I respectfully disagree. It's not about the 'docs'...it's about ownership of the property being appraised.

As an example, here's a legal description for a property I appraised:
"COUNTRY MANOR 1,A CONDOMINIUM BLK 000 D-00 UNIT 18 TGW EQUAL & UND INT IN COMMON AREAS & FACS PER DECL REC AF 9703180267"

This property is actually an attached townhouse (twin home, duplex, etc.), individually owned along with the dirt under it. The 'condominium' association is actually a PUD for HOA purposes to maintain the parks and other common areas in the subdivision of these dwellings.

This is part of the property description: "Neighborhood is a PUD of att. twnhse & det. SFR's. HOA does not own subj. site land or SFR exteriors."

The report was on a 1004, not a 1073.

This concurs with Restrain's post.

Here's another one I did:

STONEBRIDGE CONDOMINIUM, LOT 22, FOURTH AMENDMENT TO SURVEY MAP AND PLANS FOR STONEBRIDGE CONDOMINIUM RECORDED UNDER AF#200210110206, (FORMERLY STONEBRIDGE CONDO AND SECOND AMENDMENT TO STONEBRIDGE CONDO AND THIRD AMENDMENT TO STONEBRIDGE CONDO)

"The subject's development is constituted as a 'condo', however, the individual improvements and the sites (the land), are not owned by the HOA. The HOA collects monthly dues. Dues are used for common area maintenance, upkeep of landscaping within the development, and maintenance of the exteriors of the individually owned improvements.

This development is designed for people age 55+ per its covenants and bylaws."

Again, this is on a 1004 form.