PUD's - must ask

[Mainer03]

I know I am beating a dead horse...but from all the info I have read, and from HUD's cryptic description, my understanding of a PUD is that the homeowner owns the land beneath the unit and a partial interest in the common areas. I did a condo recently that the HOA stated that the project is a PUD...but the town also states the project is a PUD....BUT the owners of the individual units do not own the land beneath their units. So what makes it a PUD...HUD states

"A planned unit development 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.
Appraisals for PUD units that secure manually underwritten mortgages generally are documented on the Uniform Residential Appraisal Report (Form 1004) or the Desktop Underwriter Quantitative Analysis Appraisal Report (Form 2055). To ensure that all the specific eligibility criteria for a new PUD project are adequately addressed, it may be necessary to use an addendum to Form 1004 to provide information for appraisals related to attached units in new PUD projects (particularly when the developer is still in control of the owners' association). Desktop Underwriter will specify the level of property analysis and review for Desktop Underwriter-processed mortgages that are secured by PUD units.
The appraisal of an individual unit in a PUD requires the appraiser to analyze the PUD project as well as the individual unit. The appraiser must pay special attention to the location of the individual unit within the project, the project's amenities, and the amount and purpose of the owners' association assessment since the marketability and value of the individual units in a project generally depend on the marketability and appeal of the project itself."

In my area...you must join the HOA...PUD or not. Is my thinking wrong that you must own the land beneath your unit for it to be a PUD? Any input is appreciated.

DC

 

[Mike Kennedy]

PUDs can consist of condos, townhouses (with lots), detached homes (with lots) as well. In recent years (at least here locally) mixed uses within a SINGLE PUD have become increasingly popular.

" analyze the PUD project as well as the individual unit." - get the prospectus and the deed.

 

[Jo Ann Meyer Stratton]

And always remember--the top of the form is asking about private restrictions. What are the CC&Rs and deed restrictions that affect the subject property? The wording on the deed and in the CC&Rs that would be in compliance with Condo ownership would make the final determination of whether the property is a condo or a PUD. If there is no condo type wording and there is a mandatory homeowners association fee then it is a PUD.

Never mind what the city or county calls the zoning. Questions regarding zoning are not being asked in this section. Questions regarding zoning (public restrictions) are asked in the site section.

 

[Marcia Langley]

Mainer,

"PUD" is NOT the opposite of "condo", and any given subject can be either, both, or neither.


First you must answer the question of whether or not the subject is a condo. If it is, then you must use the condo form. If it is not, then you must use the 1004 form (or some other non-condo form).

You can not be 100% certain that a property is not a condo just because they own the land. You must read the FULL legal description that usually can only be found on the actual deed. If the legal description is not clear, you must check to see if there is a "Declaration Of Condominium" filed for the project with the planning department.

The deed and the project papers define the type of ownership, condo or non-condo.

Regardless of whether you have determined the subject is a condo or a non-condo, you must next determine whether the subject is in a PUD. You may follow HUD's definition for that. Most condos are in PUDs.

Freddie/Fannie/FHA use "PUD" as you have posted.

The common real estate meaning of "PUD" is a mixed use development.

Local zoning athorities can call anything they want to a PUD.

These are three totally different uses of the same term.

 

[Mainer03]

Thanks for the input...i get the fact that zoning doesn't matter and HOA dues are mandatory...i live in a Condo and I had to join the association but that doesn't make it a PUD....I don't own the land beneath my unit...I have read that in order for it to be a PUD...you have to own the land beneath your unit...is this wrong? As stated before...my condo is not a PUD...but I had no choice in whether or not to join the association...just because joining HOA is mandatory doesn't make it a PUD.:Eyecrazy:

 

[Marcia Langley]

I have read that in order for it to be a PUD...you have to own the land beneath your unit...is this wrong?

Mainer,

Yes, this is wrong. You are trying to say that a property can not be both a PUD and a condo at the same time. That is wrong.

I had no choice in whether or not to join the association...just because joining HOA is mandatory doesn't make it a PUD.

Per Freddie/Fannie/FHA your condo is in fact in a PUD. An appraisal of your condo would be done on the condo form but it is still in a PUD.

 

[Otis Key]

http://en.wikipedia.org/wiki/Condominium

A condominium, or condo for short, is a form of housing tenure. It is the legal term used in the United States and in most provinces of Canada for a type of joint ownership of real property in which portions of the property are commonly owned and other portions are individually owned. <snip>

Often, a condominium consists of units in a multi-unit dwelling (i.e., an apartment or a development) where each unit is individually owned and the common areas such as hallways and recreational facilities are jointly owned (usually as "tenants in common") by all the unit owners in the building. It is possible, however, for condominiums to consist of single family dwellings: so-called "detached condominiums" where homeowners do not maintain the exteriors of the dwellings, yards, etc. or "site condominiums" where the owner has more control and possible ownership (as in a "whole lot" or "lot line" condominium) over the exterior appearance. These structures are preferred by some planned neighborhoods and gated communities.
A homeowners association, consisting of all the members, manages the common areas usually through a board of directors elected by the members. The same concept exists under different names depending on the jurisdiction, such as "unit title", "sectional title", "commonhold," "strata council," or "tenant-owner's association", "body corporate", "Owners Corporation", "condominium corporation" or "condominium association." Another variation of this concept is the "time share" although not all time shares are condominiums, and not all time shares involve actual ownership of (i.e., deeded title to) real property. Condominiums may be found in both civil law and common law legal systems as it is purely a creation of statute.
The rules for condominium government or management are established in a document commonly called a declaration of condominium. The owners and occupiers of condominiums are subject to rules in the declaration of condominium or created by the condominium association, such as paying required monthly fees for maintaining the property's common areas. Condominiums are commonly owned in fee simple title, but can be owned in ways other real estate can be owned, such as title held in trust.

As you can see, condo is a form of ownership - you own air space and an undivided interest (or specific amount as prescribed in the records) of the common area. You do NOT own the land, as you said, but do own a percentage. You have a mandatory membership into the association and there is always, to the best of my knowledge, an HOA fee (management, insurance, repair savings funds, etc.). With a PUD, there may or may not be mandatory HOA fees and typically, in most PUDs, you own the site where the residence is situated. Some condos are built within PUDs so not only is there the condo fee but there is also the PUD fee.

 

[Tim The Enchanter]

This is always such a PITA. There don't seem to be any clear rules that apply nationally.

 

[jay trotta]

Each State will have it's own opinion as to how they want the "Legal Documents" to read; those documents (usually via State regulation) may be added to via the Local municipality, the State can only control so much.

Over the years I have seen "PUD" ownership take on a myriad of different formats; some the Land is taxable, with no Ownership rights; some have full Ownership rights, along with a proportional share of the "common" property.
It can be a True nightmare; your best bet is to obtain the prospectus and READ it, within the document you will find the answer (there is no easy answer) and it will pertain to that municipality "specifically".

Planned Unit Developments - are only "planned" on the basis of municipal regulation, therefore, the Ownership rights can vary.

Good Luck

 

[Mike Garrett RAA]

Thanks for the input...i get the fact that zoning doesn't matter and HOA dues are mandatory...i live in a Condo and I had to join the association but that doesn't make it a PUD....I don't own the land beneath my unit...I have read that in order for it to be a PUD...you have to own the land beneath your unit...is this wrong? As stated before...my condo is not a PUD...but I had no choice in whether or not to join the association...just because joining HOA is mandatory doesn't make it a PUD.:Eyecrazy:

Sorry, but because you have mandatory dues it makes it a PUD...as far as lending is concerned.