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To Be A Pud Or Not To Be

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Ted Markow

Junior Member
Joined
Nov 14, 2003
Professional Status
Licensed Appraiser
State
New Hampshire
I did an appraisal on a SFR for a HELOC. the water for the subject is supplied by a single well for the neighborhood an managed by a home owner association solely for the management of the well. The fee for the water is currently $500 per year. I reported it as a fee for water only as that is how it was explained to me. I did not report is as an home owners association fee because it's sole purpose was for water. Now after the fact the bank has come back and asked me to report it as an association fee and mark it as a PUD. There is no evidence that it is a PUD in my research and the Title insurance they provided after the fact. Any thoughts???
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Is the shared well owned by the group of property owners?
 

Ted Markow

Junior Member
Joined
Nov 14, 2003
Professional Status
Licensed Appraiser
State
New Hampshire
Is the shared well owned by the group of property owners?
Yes it is but it is not on common land. It is on one of the home owners property with an easement. There is no land in common to the association. The sole purpose of the association is to maintain the well. They have no reason or need for any type of insurance.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
There is no evidence that it is a PUD in my research
Is there a recorded declaration or ccr's that establish the hoa? If so, your lack of diligence is not the client's fault. If it is just a shared well agreement then, no PUD.
 

Riick

Elite Member
Joined
Aug 14, 2007
Professional Status
Certified Residential Appraiser
State
Delaware
There's room for discussion.
Ask them to have their attorney review the situation, and if attorney will send you written opinion that it's a PUD, include that in revised report.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
A mandatory home ownership fee is what describes a pud, so if all owners must pay a fee , it's a pud.
 

GA Benny

Junior Member
Joined
Oct 19, 2007
Professional Status
Certified Residential Appraiser
State
Georgia
A mandatory home ownership fee is what describes a pud, so if all owners must pay a fee , it's a pud.
Not just mandatory, but lien supported. Does the HOA have the power to place a lien on the property or do they have the power to shut off the water to the property for non-payment?
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
PUD Project Definition A PUD is a project or subdivision that consists of common property and improvements that are owned and maintained by an HOA for the benefit and use of the individual PUD units.

For a project to qualify as a PUD for the purposes of this policy, all of the following requirements must be met:
• each unit owner’s membership in the HOA must be automatic and nonseverable,
• the payment of assessments related to the unit must be mandatory,
• common property and improvements must be owned and maintained by an HOA for the benefit and use of the unit owners, and
• the subject unit must not be part of a condo or co-op project.

Zoning is not a basis for classifying a project or subdivision as a PUD. Units in projects or subdivisions simply zoned as PUDs that include the following characteristics are not defined as PUD projects under Fannie Mae’s policies.
These projects
• have no common property and improvements,
• do not require the establishment of and membership in an HOA, and
do not require the payment of assessments
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
How are the homes listed on MLS? Do they show an HOA fee? Ask some RE agents as well who sell in the community. Ask the lender/client, do they have a deed or docs that support
 

Riick

Elite Member
Joined
Aug 14, 2007
Professional Status
Certified Residential Appraiser
State
Delaware
How are the homes listed on MLS? Do they show an HOA fee? Ask some RE agents as well who sell in the community. Ask the lender/client, do they have a deed or docs that support
LoL... 86% of Agents are giving the rest a bad name.

My experience has been that most Agents can't be bothered to differentiate between a fee simple townhouse, and a condo townhouse.

AGENT: PUD?, Isn't that something people pull, or whatever?
 
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