PUD vs. HOA

[Jo Ann Meyer Stratton]

Just remember to comment on one government restriction that is discussed at the top of the form. Property taxes and also special assessments by a government entity that are not included in the property taxes. For example: an irrigation district or a paving district or even a fire district--if the fee is paid separately from the real property taxes to a government agency.

 

[Mountain Man]

With no legal teeth in the by-laws and the possibility of eliminating the HOA, the development is still a PUD, isn't it?

I am not sure about that, guess it depends some what on state law. I will have to ax 'em. We have some former PUDs that are now just your typical neighborhood since the HO quit meeting, quit enforcing codes, and dedicated the commons area as "green space". They basically abandoned, dissolved, or what ever and it doesn't exist anymore. I have also seen former PUDs converted into Condos.

 

[Mike Garrett RAA]

It's nice to see an attorney who doesn't have a clue!

In my state, most Home Owners Associations (HOAs) have tremendous power and authority. The state legislature gave it to them. For that reason, the lender (Intended User) of your appraisal report needs to know if that situation exists BECAUSE the HOA can foreclose on a property for non-payment of dues and/or non-compliance with the associations Bylaws.

Planned Unit Developments were originally designed to be groupings of residential properties...could be condo, townhouse, or single family. The concept allowed a developer to create a more dense community usually with some common grounds or elements. Most municipalities created zoning classifications for this type of property. As an appraiser, you should realize that USE dictates whether or not it is a PUD, not zoning.

The government (VA/FHA) wanted further description so they created a classification called "Deminus PUD" which infers no common elements but controlled by an HOA with "mandatory dues". For years they published lists of those projects that were considered PUD. Now, they leave it up to the appraiser and the lender to make that determination.

As a final comment......the ability of the HOA to foreclose ahead of the first mortgage is the major consideration for the lender (Intended User).

I hope this helps. It might vary from state to state but generally it is the same.