Pud Change To Condo

[Paul Ness MAI]

Here's the deal...

First - Condo -vs- PUD is not an either/or proposition. Condo is a type of ownership interest whereas a PUD is a "planned unit development" that typically falls under special municipal zoning for development approvals, design and construction requirements. PUD is NOT a form of ownership interest.

Second - Within a PUD there can be any combination of ownership interests, i.e. there can be a section of condos and a section of fee simple homes and there can even be a leased fee interest in the doctor's office that sits on the corner that is leased to a proctologist and the commercial property happens to be located within the PUD. Further, a PUD will have one or more property owner's associations. You may have a huge PUD of hundreds of acres divided into sections that include an area of single-family homes known as billybob acres and a townhouse section known as billybob condos, and both may have their own association.

Third - Don't confuse architectural style with ownership interest. A single-family home can be a condo or fee simple interest. A townhouse or villa can be a condo or fee simple interest. One easy tipoff (at least in the market I used to work in as a former resi appraiser) is to look at the assessment map. If each unit had a separate site or ground "footprint" it was fee simple. If it was a condo, it showed one large site with only the building outline(s) and orientation on the site.

 

[Don Clark]

B) This has been said, on may threads, and may times.....a CONDOMINIUM is a form of ownership, not a style or type of ARCHETECTURE. I have at least 20 variations of condominiums in my market.

 

[Howard Klahr]

Originally posted by bradellis@Jan 27 2006, 10:11 AM
Owning a plot of land in fee simple is not longer the test if that site is part of a condo.

If a plot of land is owned in fee simple then it can not be a condo by definition. I believe the description you intended was for homes within a development that have deliniated parcels of land for the exclusive use of the adjoining property owner. Often this area is described within the condo docs as "Limited Common Area" as the actual ownership interest in the land is actually vested with the condominium.


In regrd to Paul's referance to PUD's as a zoning classification ... this may or may not be the case for a particular piece of property. However, the reference within the typical URAR or Condo form report to being part of a PUD is actually a defined term by Fannie Mae. A PUD as it relates to the form report has to do with association fees - see definition below:

"XI, 302: Units in PUD Projects (06/30/02)

A planned unit development (PUD) is a project or subdivision that consists of common property and improvements that are owned and maintained by an owners' association for the benefit and use of the individual units within the project. For a project to qualify as a PUD, the owners' association must require automatic, nonseverable membership for each individual unit owner, and provide for mandatory assessments. Zoning should not be the basis for classifying a project as a PUD."

Source: Fannie Mae Single Family Selling Guide
Part XI: Property and Appraisal Guidelines (06/30/02)
XI, Chapter 3: Special Appraisal Considerations (06/30/02)
XI, 302: Units in PUD Projects (06/30/02)
Link to source document for above reference

 

[Carnivore]

Heres is something to consider:

The Dictionary of Real Estate Appraisals, 4th Addition, Appraisal Institute

fee simple estate
Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.

fee simple titleA title that signifies ownership of all the rights in a parcel of real property, subject only to the limitations of the four powers of government.


Heres my question.

Does a condo form of ownership fall under either one of those definitions?

What about attached Townhomes with there own land and no mention of a undivided interest?

 

[Tim The Enchanter]

The reason I think that the subject is a PUD is :

All the public records says that the property type is PUD.
In addition, the subject is detached, and has its own large backyard.

However, the legal description states as "... LOTS 1-3 CONDO UNIT 20 ".

Thanks in advance for any advice.

We have a lot of these. <_<

There's attached and detached condos, and attached and detached PUD's. The prelim should hopefully clarify things. Maybe. It's a real PITA. In a pinch for comps I've used detached condos for comps to detached PUD's. No real difference as far as the buyer is concerned. imho, attached versus detached is what matters to a buyer.

Some people don't like the one mans ceiling is another mans floor thing. :lol:

 

[Roseann Dufala]

I guess I am lucky here is SC: Our deeds are documented with a legal ownership of "Horizontal Property Regime" which means CONDO ownership. If that phrase is NOT on the deed, then it is NOT a condo--(we pull a deed for every property--attached and detached)--just in case anything!!

 

[bradellis]

Howard,

Your quote, "If a plot of land is owned in fee simple then it can not be a condo by definition. I believe the description you intended was for homes within a development that have deliniated parcels of land for the exclusive use of the adjoining property owner. Often this area is described within the condo docs as "Limited Common Area" as the actual ownership interest in the land is actually vested with the condominium."

That has not been the case since Michigan invented the site condo. Site condos typically have individual ownership of the land under the home and perhaps some additional land- could even be a full sized parcel, but it belongs to a condo associations with all that is attendant to that.

If the legal description says condo- it is a condo.

However, I am certainly willing to read any sort of actual definition that is is not- IF you can produce one.

But you will now see these all over Michigan and all over California. They are condos- declarations, covenants, etc. apply.

Brad

 

[Ms. Janet]

Originally posted by bradellis@Jan 29 2006, 10:23 AM
Site condos typically have individual ownership of the land under the home and perhaps some additional land- could even be a full sized parcel, but it belongs to a condo associations with all that is attendant to that.

 

[Howard Klahr]

Brad,

I believe you and I are saying the same thing, if there is a declaration of condominium then the property is a condo. If I was unclear in my earlier post I apologize.

This isn't a complicated concept and has been addressed over this forum numerous times. Condominium is not an architectural style but rather a form of ownership. As such, a condominium is not a fee simple estate whether there are private yards or detached structures.

Your reference to certain developments as having individual ownership of the underlying land is not accurate but is rather owned in common by the condominium development as you go on to indicate. The exclusive use of these lots by the respective unit owners is what defines these areas as "Limited Common Area".

 

[The Warrior Monk]

We have some condo and PUD setups here that confuse lenders. It's very important to get everyone on the same wavelength as to what it is. If the lender thinks it's a PUD, the appraiser does it is a PUD, and then the lender finds out they were wrong in the first place, that means another report will need to be done.