PUD or Condo

[Laughing Heir]

Mike - yep, it was an exterior only, I think the Condo EXT. is a 1075. I tried to fill in the form for the 1075 last night but it just didn't make any sense given the information that I've culled from Rec. of Deeds. I just merged it with a 2055 just so it would be complete if the client came to their senses today...

I have three lawyers in my family and they all agree that it's a PUD. I'm going to take Mike and TJSum's advice and get documentation from those sources.

 

[Kevin A. Spellman]

Her in MA we have master deeds, unit deeds, we have 60A certificates that are recorded stating the common fees are paid. If your deed does not reference a master deed and or discuss the percentage of ownership, then your subject may not be a condominium. There must be a definition of the common elements. The assessor’s office/records are not the authority. It is the recorded documents for the subject’s legal description. The percent of ownership must add up to 100% for all of the units. Is there a master insurance policy for the complex? For FNMA just the presence of a monthly or yearly fee creates a PUD in their definition.

 

[Couch Potato]

Fannie say 1004 is fine.

Doug,

I believe that Fannie wants these site condos done on the condo form.

You can check the selling guide, Section XI. Let us know what you find.

Brad

In the past Fannie has said a 1004 with a condo addendum was fine for a site condo in XI, 301; it gives a clearer description of the property. The language was removed from XI, 301; but is now found in XI, 203 in the paragraph about the 1004.

Uniform Residential Appraisal Report (Form 1004) for appraisals of one-unit properties and units in planned unit developments (including those that have an illegal second unit or accessory apartment) based on interior and exterior property inspections. Form 1004 also may be used for two-family properties, if each of the units is occupied by one of the co-borrowers as his or her principal residence or if the value of the legal second unit is relatively insignificant in relation to the total value of the property (as might be the case for a basement unit or a unit over a garage). In addition, appraisals for units in condominium projects that consist solely of detached dwellings may be documented on Form 1004, if the appraiser includes an adequate description of the project and information about the owners’ association fees and the quality of the project maintenance.

 

[Laughing Heir]

Master Deed w/ Declaration/Covenants

After spending the last two days trying to make sure that I grasp this concept, I'm finally at peace with it. Everyone that posted has been a tremendous help!

I've attached the section of the Declaration that spells out the insurance requirements and easement descriptions.

Please let me know if my logic is flawed for this:

Condo owners have a % interest in the common areas (i.e. they actually own X% of the condo project including the common areas). One, or several, owners within the project could own large percentages of the project; this is a more complex form of ownership and appears to present more risk to the lender. Thus the necessity and increased scope of work for the Int. or Ext. condo forms.

PUD owners are granted easements to all of the common areas; all common areas are owned by the development's HOA (be it non-profit or corporation). One person or entity could own 5,000 lots in the development and yet only have as much interest in the development as a person that owns one lot.

The client has placed this order on hold pending confirmation of the ownership type by their title company. Thanks to the advice and guidance from your replies I was able to stand my ground and put the ball in their court.


I forgot to initially ask this:

Can you use the description of easements to determine the form of ownership?

Please remember that this situation began with the client telling us one thing and the legal description in the deed is extremely vague.

 

[Laughing Heir]

Kevin,

What you're describing is what I have been trained to look for (at least the legal instruments). A new feather in my cap is the insurance aspect - nice angle!

I know the assessor's offices intimately in my region. I can assure you that out of the 6 counties we cover there is maybe one chief assessor that is certified as an appraiser also. I'm in NorthEastern PA, and around here incompetent people in political jobs is called NEPAtism (as I'm sure MASS. is no different).

And I found out very early on that FNMA treats every property with dues as a PUD regardless of the real world implications. We have hundreds of small lake communities around here that are not CID type projects. That debate with underwriters (LOs?) occurs weekly at my firm.

ML

 

[Couch Potato]

Sure reads like a PUD to me.

 

[Laughing Heir]

CP -

The level of research and discovery involved with Condos seems to certainly exceed that of a PUD, do appraisers in your market typically charge more for the increased SOW?

Like I wrote earlier, we have very few Condo Developments in this region. It seems to me, after trying to fill in the 1075 in vain, that it should be worth at least 100-200 more clamshells than the 2055 or 1004URAR.

 

[Couch Potato]

I figure the time saved not looking at the cost approach is about equal to the extra time for the condo. Part of it is just having enough practice at them. There were so many condo's in FL when I was working down there that I got very efficient at doing them.

 

[Brad Ellis]

Couch,

Thanks for the reference.

Now, given that they require the data contained in the 1073 and will accept the 1073 or the 1004, why would anyone want to use the 1004 when the 1073 is a relatively concise form for reporting that data?

Brad

 

[Couch Potato]

Couch,

Thanks for the reference.

Now, given that they require the data contained in the 1073 and will accept the 1073 or the 1004, why would anyone want to use the 1004 when the 1073 is a relatively concise form for reporting that data?

Brad

The 1073 has numerous sections that just don't apply to a site condo and lacks any place to describe the site. The 1004 does a much better job of facilitating the description of a stand alone condo building. The software vendors (at least Bradford and a la mode) have taken the "relatively concise" part of the 1073 that contains the project information and placed it on a one page addendum to be used with the 1004.

A 1004 with Condo Addendum gives a much clearer picture of the property, IMHO. It takes quite a bit of narrative in an addendum to a 1073 to do the same job and avoid a misleading report.