Thinking of buying an attached unit in a Multi-Unit Development?
Condominiums, Townhomes and Planned Unit Developments (PUD’s), are somewhat similar dwellings and at a quick glance they all look like Condo’s, but each are different in regards to ownership. Knowing the differences is important if you are thinking of buying one of these properties. Here is a brief explanation of each.
(1) a Condominium is a form of ownership which involves a separation of property such as the common area and what belongs to the individually owned unit. Each owner holds the fee simple interest to his or her individual unit – which consists only of the airspace (that is within the walls of your unit) – and also the owner will share in a percentage of the overall complex HOA fees for the common areas which may include patios, storage, parking areas, decks, a park, a pool and possibly a community center plus other common use areas. The legal description will have several parcels that include the unit you plan to buy. This consists and includes any and all common areas plus any easements. Most all these developments have governing documents known as Covenants, Conditions & Restrictions (CC&Rs). Any Liens affecting the homeowner’s association and/or common areas can affect each individual unit owner.
(2) a Townhome is a unit that generally has two or more floors which is “attached” to other similar units via party walls. Townhomes are often used in Condominium developments and Planned Unit Developments (PUD’s), which provide for “attached” housing and common open/area space. A Townhome is merely an architectural design; it has no bearing on type of ownership other than it may indicate that there are party wall agreements that may be recorded or be a part of the governing documents (ie: HOA’s).
(3) a Planned Unit Development (also known as a PUD), allows the grouping of housing units on lots smaller than usually allowed in comparison to a standard residential home lot size.. Within the PUD, the owner owns the land and structure plus any improvements and will also benefit from an association that provides common areas and amenities. Upon purchase you have an automatic membership and it is a requirement that each unit shares any mandatory improvement assessments to the association in order for the property to qualify as a PUD. A PUD can have multiple types of dwellings: single-family detached residences, townhouses (one party wall attached) and multi-family buildings. The legal description in the owners’ title policy will show the lot and size as created by the map, and there will be exceptions shown for the governing documents of the association (CC&Rs). Liens affecting the association and/or common areas do not attach to the individual land owners due to the separate ownership of the common areas by the associations.
Note: There are advantages and disadvantages to these types of ownership, make it a point to contact Oscar Castillo for further clarification.
Oscar Castillo : Broker Associate - Coldwell Banker