What Determines If Its A Pud?

[Leon Stewart]

What happens when the Appraiser is not informed that the Property is a PUD? The Sales Contract doesn't indicate such, the Lender doesn't indicate such when the Order is placed, the Seller dosen't say anything, the Public Records doesn't indicate PUD, and the Appraiser doesn't usually ask the Owner or anyone else if the Property is a part of a PUD, but the Property is found to be a PUD during Title Search. What's the Appraisers options?

leon

 

[Mountain Man]

Leon, the UW will let you know when they get the title work back from the attorney.

 

[jtrotta]

OK; welcome to quirk City/State - because we have so many various towns, each having their own "Zoning Laws" over the years it has come to pass that if there were No Regulations determining if a PUD could be developed or not, it was left up to the Developer and his attorney to write up the regulations as to how they would interpret the "New Zoning".

Now, each town has it's own Zoning Law regarding a "PUD" and you basically have to read the regulation to see what it encompass's; some have common area's and others donut; some have "zero lot line" encorporations and some don't; most have a "Common Fee" for a portion of the maintenence aspect of the PUD. Having read numerous documents developed for these PUD's - they basically are similar to a condominium document, with express language regarding the "land use" and what the common fee will be used for.

Good Luck in your State :mrgreen:

h34r:

 

[jeff samolinski]

In Florida a PUD is directly related to zoning. In my immediate area, if zoning district is not PUD then it is not a PUD. Zoning rules what it is. Can be zoned any type of residential use with hoa's or not and it is still not a pud unless zoned PUD. Therefore, I call zoning department, if they do not say zoned PUD then I will not put PUD period.

 

[Jo Ann Meyer Stratton]

The question at the top of the URAR and 2055 is in regard to private restrictions on the subject property and has absolutely nothing to do with governmental restrictions. There has to be a private restriction within the CC&Rs or deed restrictions for a PUD with a mandatory home owner's association fee that would become a lien or the property for the PUD box to be marked. If there isn't a private restriction on the property that would create a lien on the property if the fees are not paid then it is NOT a PUD. If there are private restrictions but the home owner's association fee is voluntary, then it is not a PUD and the PUD box would not be marked.


Govenmental restrictions are noted in the site area and zoning might use the term PUD, but a zoning of PUD by the local government does not affect the information at the top of the form. Just because the government restriction is termed PUD does not make the subject a PUD with mandatory HOA fees that would become a lien on the property. If the zoning is PUD, but there are no private restrictions and no mandatory homeowner's association fees, then the PUD box at the top of the form is NOT marked.

There are two completely separate types of PUDs, one is a private restriction and one is a governmental restriction (police power). The top of the form is for private restrictions and the site area is for governmental restrictions.

 

[jeff samolinski]

If there are common areas that require maintenance etc there will be mandatory hoa fees for those areas as part of the pud approval process with the government. I do not see or have not seen anything about the top of the URAR form that says anything about private resrictions. It asks if it is in a pud. That term is a zoning designation. Some zoning laws are more specific about maintanance of common areas that are allowed to be created by the zoning code. It is a zoning issue at least in my area. Would be misleading to call it a pud if not zoned pud and visa versa. pud's are the result of renogiating the original underlying zoning district regulations before development. lot sizes setbacks, amenities, green areas etc are changed per pud agreement. You can bet that if taxes not paid on those common areas that there will be a government lien put on them. private liens are not the only consideration here.

 

[Jo Ann Meyer Stratton]

If there is a private homeowners association that is has mandatory fees then the box is marked PUD at the top of the form.

If there is a governmental PUD zoning, but no private home owners association, the box would not be marked as PUD, but PUD would be indicated in the zoning blank in the site area. If the government is assessing a fee for some type of maintenance/benefit that fee is indicated in the special assessment blank not in the HOA$ blank.

Governmental information/liens are on the one line:
Assessor's Parcel No. R.E. Taxes $ Special Assessments $

Private information/restrictions/liens, etc is on the next line:
Property rights appraised Fee Simple Leasehold Project Type PUD Condominium HOA$

The PUD zoning you are describing is a special assessment by the local government. The appraiser would note the amount in the Special Assessment blank. That Special Assessment blank would be also used for any other governmental costs/fees/charges that are not included in the tax bill reported under R.E. taxes--for example irrigation district, paving or lighting district, a fire district, etc. If the local government includes that PUD assessment within the real estate tax, then the special assessment box would be blank.

"Fannie Mae guidelines (6/30/2002) Section 401 - The Subject Property: The appraiser must identify the property rights to be appraised as "fee simple" or "leasehold". In addition, the appraiser must indicate whether the subject property is located in a PUD or Condominium project." Then the mandatory fees charged by the private association is noted in the HOA$ blank because the private restrictions affect the property rights of the subject.

So yes, there could be a property that is not a PUD, without any private restrictions, would not have the PUD box checked, would not have a HOA fee and zoned as a PUD, in that case the Special Assessment blank would be filled in, if the local government is assessing a fee separate from the tax bill.

There could also be situations where the zoning is not PUD but a Special Assessment (government restriction) would be indicated and because of a private homeowner's association mandatory fee the PUD box would also be checked (private restriction) and the HOA fee would be noted.

 

[jeff samolinski]

The fact that a subdivision has mandatory hoa fees does not make it a pud. I believe that the form is not clear as to the definition of a pud at the top of the form. Yes under site it is clear that there it is about the zoning designation. But at the time i have never seen any reference citing that the pud box refers only to private resrictions. The form sets us up to be potentially misleading. best way to go for me seems to be to explain in addendum, the nature of any fees under the hoa box whether they are mandatory or not and what those fees are for.

Guess my 10 years as a city planner are tripping me up here. If you have something that clearly indicates that top part of form regarding pud box refers only to private resrictions I will have learned

 

[Jo Ann Meyer Stratton]

The Appraisal Guide, published by Fannie Mae, Fall 1992, page 53
Appraising units in a planned unit development (PUD)
Generally, a planned unit development (PUD) is a multi-unit real estate project in which the owner of each unit has title to a residential lot and building, a nonexclusive right to use the common elements of the overall project for specific purposes, and, sometimes, an exclusive right to use certain portions of the common elements.

Zoning is not a basis for classifying a project as a PUD. We consider a project to be a PUD if the owner's association requires automatic, nonseverable membership for the owner of each individual unit and may establish mandatory assessments when necessary for the maintenance of the property.

Fannie Mae Guidelines effective 6/30/2002
Section 302 - Units in PUD Projects
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.

Appraisals for PUD units that secure manually underwritten mortgages are generally documented on the Uniform Residential Appraisal Report (Form 1004) or the Desktop Underwriter Quantitative Analysis Appraisal Report (Form 2055). To assure 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.

FHA 4150.2, Protocol, Property rights Appraised:
Select the appropriate ownership rights for the subject property as of the date of the appraisal. For HUD/VA mortgages, indicate the project type. Is it a Planned Unit Development or a Condominium? If there are monthly association dues to cover common property, enter this information in the HOA$/Mo. space. If the subject is a form of condominium ownership and maintained by an association, report the monthly fees in this space.

Section 3-Planned Urban Development (PUD)
The appraiser must complete this section if the subject property is part of a Planned Unit Development.
A PUD is a project that includes common property an improvements owned and maintained by the owner's association for the use and benefit of the individual units in the subdivision.
Select whether or not the developer/builder is in control of the Home Owner's Association (HOA)
Enter the approximate total number of units in the subject project and the number of units currently for sale.
Describe the common areas and recreational facilities of the PUD, including all areas accessible for use by PUD owners.

There are two types of PUDs. One is a term that some city/county government agencies use for a specific type of zoning. When describing the subject site, anything and everything involving government entities would be discussed there. Any mandatory special assessments that are collected by a local governing agency and not included in the real property tax bill would be noted as a special assessment at the top and discussed in the site section. If part of the total tax bill, there would be no separate special assessment. The police power restriction on the bundle of rights that can be imposed by local government.

The other type of PUD is a type of private limitation/restriction that affects the fee simple ownership of property; deed restrictions, subdivision restrictions, etc imposed by individuals rather than a governing entity. That is the type of PUD that would be noted at the top of the form and the fee filled in the HOA$ blank. And described in more detail in that specific section toward the middle of the URAR on page one.

 

[Joshua Fookes]

You asked for it Jeff :lol: