SFR or Condo?

[davetheappraizer]

It sounds like you may have a "site condo." They are quite common here in Michigan, although there has been a trend within the past few years to develop projects as PUDs, which is a relatively new concept in these parts. Developers began using the "site condo" form of land development when they realized that they could cut the approval process time nearly in half by utilizing the "site condo" concept in place of "platted subdivisions" and the entire project site is recorded as a whole, like a "condo project" and then the individual sites are drawn up later, as opposed to a platted sub where each individual site is drawn up prior to the submission of the project development plan. As a result, "site condos" (in some states called PUDs) have become a very popular form of land development for the past thirty years. In appraising these properties, a convention has become common to treat "site condos" and "platted subs" as though equal. Certainly, to the casual observer, one usually cannot tell the difference just by driving through the developments. In a "site condo" each home sits on a parcel of land which is private to the homeowner - just like in a platted subdivision. There are not any commonly owned lands surrounding each unit as in detached condos, nor do adjacent units share building walls as in attached condos. The lot sizes are recorded individually within the Master Deed. The subject is a "condo" in name only; the homeowner owns the site, the building, and everything on it. There may or may not be common areas in some "site condo" subdivisions such as traffic islands, street lighting, subdivision ponds, subdivision parks, subdivision entry signage, subdivision street signage, or wetlands which may or may not require a home owner association fee to help maintain those common areas. This is also true of some "platted subdivisions" that have a HOA and/or common areas. Because the real estate market treats "site condos" and "platted subdivisions" alike, appraisers have, likewise, treated them similarly, and use the 1004 appraisal report form for both types of properties. When a "drive by" appraisal is requested, the 2055 report form is completed, not a 1075, using the same thinking as when using a 1004 instead of a 1073 for a full appraisal.

 

[al002kim]

Some newer constructions in Los Angeles area near Valencia/Santa Clarita, I find assignments which lender says its a Condo but later you find out it is either a Pud or Condo... The best way to find out is asking the lender if they have a Premilinary Title report, it will be able to tell if its a condo or pud... If the lender insists it's a Condo or Pud, do as they say, and later, if they change their mind, charge another full price for change of form...

 

[Marcia Langley]

al,

I'm amazed that your clients go along with that strategy.

Not only are you charging them double due to complications arising from your own lack of due diligence, but you risk having an eroneous report "out there" for others to complain about later. Just like in the OP's story.

Regardless of what form is used or what sort of comparables are appropriate, an appraiser is obligated to discover and report the form of ownership when developing/reporting his appraisal.

 

[Kevin A. Spellman]

Here is MA, the first deed as a condominium has to be recorded with a floor plan. The registry of deeds also labels condominiums as a Unit Deed to separate the deeds from each other. The unit deeds also state the master deed reference. If your subject is a condominium then the land area should be described as exclusive use. Here in MA condominium assessment do not have a land value assessment.

Is there a master insurance policy for the development? Does the subject’s home have restriction in respect to expansion or change the exterior décor? Is there a trust recorded in the name of the development? Can you review mortgages that are recorded in this development, most mortgages last page have exhibits indentifying the unit or the property receiving the mortgage.

The appraisers here in MA appear to have it easier with the identification of the subject than other parts of the country. We have state code for use in the assessment. A condominium in MA is coded 102. A single family is 101, two family 104 and a three family 105.

 

[Carnivore]

... I find assignments which lender says its a Condo but later you find out it is either a Pud or Condo...

Can a condo form of ownership be located within a PUD?

Inquiring minds want to know.

Appraoximately four weeks ago I was in Daytona Beach
I stayed at a place: https://www.wyndhamvacationresorts.com/ffr/resort/details.doorida.

Within this complex there are numerous forms of ownership, i.e. condo, time interval, condotel, and hotel From the pictures all of this is on one site within two high-rise towers.

Does this example give anyone pause for thought when it comes to identifying your subject?

 

[Vivian Bachner]

Some newer constructions in Los Angeles area near Valencia/Santa Clarita, I find assignments which lender says its a Condo but later you find out it is either a Pud or Condo... QUOTE]



al002kim: Condominiums and PUDs are not mutually exclusive. One is a form of ownership; one isn't. Here in New Jersey, we have condominiums, single family residences, commercial properties all in planned unit developments.

 

[Couch Potato]

Not only can a condo be in a PUD, occasionally a PUD will exist inside another PUD. The most convoluted I've seen was a condo near Disney where there were four different associations receiving fees, and responsible for various parts of the maintenance and operation of the development.

Some jobs require the appraiser to work harder than others.

 

[Ray Miller]

Can a condo form of ownership be located within a PUD?

Inquiring minds want to know.

Appraoximately four weeks ago I was in Daytona Beach
I stayed at a place: https://www.wyndhamvacationresorts.com/ffr/resort/details.doorida.

Within this complex there are numerous forms of ownership, i.e. condo, time interval, condotel, and hotel From the pictures all of this is on one site within two high-rise towers.

Does this example give anyone pause for thought when it comes to identifying your subject?

Yep, that's about right, mix and match for the buyer.woohoo

 

[Marcia Langley]

Vivian is right, the terms are not mutually exclusive. When appraisers try to distinguish condo form of ownership from non-condo form of ownership they resort to shorthand terms that do not literally mean what they intend.

The only term that really means it is not a condo is "not a condo".

"PUD" does not mean "not a condo" any more than "townhouse" or "single family" does.

Most condo units are single family properties located in PUDS.

It's OK to use non-exact terms when in casual conversation with others when you are sure they know what you mean.

It is not OK to do so when inexact terms could be misunderstood, like in an appraisal.

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Does this example give anyone pause for thought when it comes to identifying your subject?

Andrew,

Your example fits the classic original definition of a PUD. The term originally meant that there were mixed uses within the development. Fannie Mae used that pre-existing term to define their own use of it. Unfortunately.

But even Fannie's definition of "PUD" does not mean "not a condo".

There can be mixed uses, mixed forms of ownership and/or mixed building styles in any project. The appraiser has to do their due diligence.