The Collaborative Knowledge Article and Video Project about Buying and Selling a Home. With your writings, edits and uploads we can help people successfully complete what is probably the largest transaction in their lives, and avoid making costly mistakes. Both agents and consumers, we need your help to build this free resource.
Understanding Condominium And Planned Development (Pud) Ownership
By Matt Unangst, 23 Jan 16:02
• Types of ownership, not types of dwelling
• Plusses and Negatives to condominium/PUD ownership
• Ownership rights spelled out in CC and Rs
• CC and Rs should be studied prior to purchase
• Consult an attorney for any questions regarding CC and Rs
• Extreme difficult to affect any change to CC and Rs
• Homeowner’s assessments cover common costs and reserves
• Failure to pay could result in late fees, or even foreclosure
Common interest developments (CIDs) have become increasingly popular in recent years as developers have struggled against the twin problems of an increasing population and a scarcity of available prime land. The two most common types of CIDs in California are Condominiums and Planned Developments (PUDs). These offer the attractions of being low maintenance and having access to shared facilities, but they also come with some restrictions.
Contrary to what many people believe, neither Condominiums nor Planned Developments refer to a specific type of dwelling, rather, they refer to a form of ownership which can be held over a great variety of properties. Condominiums and Planned Developments have their differences, but they also share a number of characteristics. First, they both utilize common ownership of private property to share costs and responsibilities. With this comes the requirement that people living in the development join an association which controls the common property. These associations have governing documents which not only govern the association and common property, but also establish rules and bylaws for the use of individual lots or units within the development. Also included are rules for assessing owners for the costs of the association’s operation and maintenance.
The homeowner’s association must provide individual owners with an operating budget, stating the association’s income and financial obligations, the life of these obligations, and how they are to be replaced. The budget will include the expected payments for maintenance and upkeep of communal facilities. Also factored in will be reserves. For condominiums, reserves often go to fund parts of the house in which you live, such as plumbing and roofing, since these are not personally owned.
Condominium owners usually own their entire unit and a portion of communal facilities. The owners of a lot within a PUD own the lot and the structure and improvements on it. They also receive rights and easements to use common areas owned by an association of in which they have a membership. The difference between the two is in the ownership of common areas.
There can be huge differences in what is meant by common areas from development to development. Some developments have little to no real common area, while others feature world-renowned golf courses and the like. What you have rights to as a condominium or PUD owner will be spelled out in the CC & Rs (Declaration of Covenants, Conditions, and Restrictions) for your community.
Prior to purchasing a condominium or PUD, you should make a careful inspection of the CC & Rs for the development. The CC & Rs contain bylaws regulating the development. These laws can be things that drastically impact your life. For instance, some developments have limitations on noise that can pretty much prevent you from ever having people over at night. Failure to follow the community’s bylaws as set out in the CC & Rs can result in legal action against you by the community association. It is not worth the trouble of trying to change anything in the CC & Rs, which requires a long and expensive process, and may require litigation.
If you are late in paying your homeowner’s assessments, you will be charged a late fee by the homeowner’s association. If this does not have the desired affect, the homeowner’s association has the ability to place a lien upon your property, which may lead to foreclosure should you not meet your payments.
KEYWORDS: condo, condominium, PUD, homeowner’s association, community association, CC & Rs, CC & R’s, cc&r
SEE ALSO: Understanding Subdivision Public Reports
Tags: condo townhome condominium