PUDs - what is your definition.

[Joe Abell]

I was browsing the board and noticed some comments about PUDS and it seems that depending on where people live - the definition of a PUD might be different. The definition I've always used is:
"A type of community zoning classification that is planned and developed within a city, municipality and/or state that contains both residential and non-residential buildings (such as shopping centers). Open land, such as for parks, is also often included in the zones"
But some posters in a few of the threads seem to think it is akin to a condo (which is a form of ownership). I've even seen some ask questions such as "is the property a SFR or a PUD" - that one makes no sense to me - per my definition, a SFR (construction type) can exist either inside or outside of a PUD which is a zoning classification for a community.
that being said, here in KY, I often get looked at like I'm crazy when I ask someone at planning and zoning whether or not a development is a PUD - I always get the response "what's a PUD"? It's irritating, as I often can't tell if a development is a PUD or not. Sometimes, there are homeowners associations, but that doesn't necessarily mean the property is in a PUD does it?
what's everyone's take on this? I'd be interested in reading some replies.
Joe

 

[Jo Ann Meyer Stratton]

For Fannie Mae and Freddie Mac mortgage purposes (and any time you use the 2005 version of the 1004/1004C) there are two very distinct and different types of PUDs.

The question in the subject section at the top of the 1004/1004C is asking about private restrictions to the title to the property. If there is a mandatory homeowner's association fee--the answer is that yes the property is in a PUD. That question and that section has absolutely nothing what so ever to do with zoning or any other governmental restriction. It is to report that the subject is or is not in a PUD--box is checked if yes. And if the box is checked yes the amount of the HOA fee has to be provided. The homeowner's association could file a lien against the property if the fees are not paid.

Then further down on the 1004/1004C in the site section you have to report zoning. Zoning for that specific area may be Planned Unit Development or PUD, which would then report however the city or county titles the zoning. This zoning designation has absolutely nothing to do with the private homeowner's association and does not have any HOA's fees as a result.

Just remember the two different sections are asking questions about two completely separate items that have absolutely nothing to do with each other.

 

[Lee Lansford]

What Jo Ann said.

 

[VolcanoLvr]

10-4 with Jo Ann.

PUD = Planned Unit Development

However, a PUD may not necessarily have 'commercial uses' within it.

The HOA could be constituted to maintain only the roadways, street lights and other common areas within the PUD subdivision.

A good review of your state's real estate laws should be done, as KY apparently does not have a legal term as 'PUD' that exists in other states. (Reason for the blank stares!) But they may have another term that legally means the same thing as we have discussed here. It's important to use correct terms!

By the way...sometimes a HOA exists, but the subdivision is not a legal PUD. Often in that case the HOA is for payment of voluntary dues for some common area maintenance issue(s), but since it's voluntary, a legal lien can't be recorded against the property that does not pay dues. (At least that's how I understand this type of situation.)

 

[Mztk1]

Here's the definition I use for a PUD. It comes direct from Fannie Mae Guidelines:

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.

We have several projects here that have common property, mandatory fees to maintain that property as a special assessment in the taxes, voluntary HOA membership with voluntary dues, and they are zoned PUD (PD-MU). But these projects do not meet the definition of PUD above and I do not consider them PUD projects.

 

[Jo Ann Meyer Stratton]

If the fee is paid through property taxes the PUD box in the subject section of the report would not be checked, as they are not private assessments that could create a separate lien against the property. If there is a homeowner's association but the fees are voluntary, the PUD box in the subject section of the report would not be checked either.

The PUD box in the subject section is only marked with an X when there is a mandatory homeowner's association fee paid to the HOA (private party).

Zoning should not be the basis for classifying a project as a PUD.

 

[Doug Meyer]

Being from Indiana, I would not dare make fun of Kentuckians!!! :icon_lol:

Joann is correct and that is also the standard on how I judge a property to be a PUD or not.

 

[Mztk1]

If the fee is paid through property taxes the PUD box in the subject section of the report would not be checked, as they are not private assessments that could create a separate lien against the property. If there is a homeowner's association but the fees are voluntary, the PUD box in the subject section of the report would not be checked either.

The PUD box in the subject section is only marked with an X when there is a mandatory homeowner's association fee paid to the HOA (private party).

Zoning should not be the basis for classifying a project as a PUD.

That's exactly what I said Jo Ann. Thanks for clarifying if it didn't read that way. I edited it to avoid the confusion.

 

[Mike Garrett RAA]

If there are MANDATORY dues then it is classified as a PUD. Why? Because if the property owner doesn't pay the dues the HOA can foreclose on the property. Zoning has nothing to do with it.

 

[Dennis J. Black ASA IFAS]

Joe,

Have you ever read the FNMA Selling Guide? You should.