Builders, in an effort to combat the dual problem of an increasing population and a declining availability of prime land, are increasingly turning to common interest developments (CIDs) as a means to maximize land use and offer homebuyers convenient, affordable housing.
The two most common forms of common interest developments in many states are Condominiums and Planned Unit Developments, often referred to as PUDs. The essential characteristics shared by these two forms of ownership are:
Before continuing further, it may be helpful to clarify a common misconception about Condominiums and PUDs. The terms Condominium and PUD refer to types of interests in land, not to physical styles of dwellings. Therefore, when homebuyers say that they are buying a townhouse, it is not the same as saying that they are buying a condominium. When homebuyers say that they are buying a unit in a PUD, they are not necessarily buying a single-family detached home. A townhouse might legally be a condominium, a unit or lot in a Planned Unit Development, or a single-family detached residence. The terms Condominium or PUD will say a great deal about the ownership rights the buyer will receive in the unit and the interest they will acquire in the common properties or common areas of the development.
Common interest developments offer many advantages to homebuyers, such as low maintenance and access to attractive amenities. However, there are restrictions and duties which come with ownership of a Condominium or PUD that buyers should be aware of prior to purchase.
To acquaint you with various aspects of ownership in common interest developments, the Land Title Association has answered some of the questions most commonly asked about Condominiums and PUDs.
What are the basic differences between ownership of a Condominium and ownership of a PUD?
The owner(s) of a unit within a typical Condominium project owns 100% of the unit, as defined by a recorded Condominium Plan. As well, they will own a fractional or percentage interest in all common areas of the Condominium project.
The owner(s) of a lot within a PUD owns the lot which has been conveyed to them-as shown in the recorded Tract Map or Parcel Map-and the structure and improvements thereon. In addition, they receive rights and easements to use in common areas owned by another-frequently a Homeowner’s association-of which the individual lot owners are members.
The above are basic descriptions and should not be considered legal definitions.
Besides ownership of my unit, what other amenities (common areas) will I be acquiring use of and how will I own them?
Common interest areas may span the spectrum from the ordinary-buildings, roadways, walkways and utility rooms-to the extravagant-equestrian trails and golf courses-with more usual amenities including community swimming pools and clubhouse facilities.
Your ownership rights in common areas will be spelled out in your project’s Declaration of Covenants, Conditions and Restrictions (CC and R’s). The subject of CC and R’s will be expanded upon later in this brochure.
As we stated in the answer to the previous question, Condominium owners own a fractional or percentage interest in common with all other owners in the Condominium project, in all common areas. PUD owners receive rights and easements to use of common areas through their membership in a Homeowner’s association, which typically owns and controls the common areas. Some PUD projects, however, provide that the individual homeowners will own a fractional interest in the common areas. Again, in this case, a Homeowner’s association will have the right to regulate the use of the common areas and to assess for purposes of maintaining the common areas.
Check your CC and R’s and association Bylaws (basically, rules governing the management of the development) to insure that you understand your rights to use of your unit and common areas.
What services will my Homeowner’s assessments help to finance?
Your Homeowner’s assessments support not only the easily recognizable-building and swimming pool upkeep, landscape maintenance-but also the unseen-association management and legal fees and association insurance.
As well, reserves must be factored into your assessments, including reserves for replacement of such items as roadways and walkways. In the case of condominiums, where ownership is usually limited to airspace within the walls, floors and ceiling of the unit, reserves will frequently fund replacement of such items as roofs and plumbing.
Each member of the Homeowner’s association, upon purchasing their unit, must receive a pro forma operating budget from the association. Basically, this will be a financial statement of the income and obligations of the association, which must include an estimate of the life of the obligations covered under the assessments and how their replacement is being funded.
What happens if I fail to pay my Homeowner’s assessments?
Delinquency fees will be added onto the unpaid assessments.
Should your delinquency continue, the association has the right to place a lien upon your property. The lien may lead to a foreclosure if the delinquency is not paid.
Of what importance are CC and R’s and Bylaws?
CC and R’s and Bylaws are the rules and regulations of the community, meant to guide the use of individual properties and common areas. Buyers should be aware that CC and R’s and Bylaws may be written so as to restrict not only property use, but also to restrict owners’ lifestyles, for instance, spelling out hours during which entertainment, such as parties, may be hosted.
CC and R’s and Bylaws are highly important and should be thoroughly examined and understood prior to purchase. They bind all owners and their successors to the rules and regulations of the community. Failure to follow those rules and regulations can be considered a breach of contract. Legal action may be taken against the homeowner for any such breach.
At what point in the real estate transaction will I be allowed to review a copy of my CC and R’s and Bylaws?
Legally, it is the responsibility of the owner to provide the prospective purchaser with the governing documents of the development (CC and R’s and Bylaws), the most recent financial statement of the Homeowner’s association and notice of any dues delinquent on the unit.
The law states that these items should be delivered as soon as practicable; however, the prospective buyer should request to see them as early as possible. If you do not fully understand what is stated in these documents, consult a real property attorney.
Should I object to items included in the CC and R’s and/or Bylaws, will I have the opportunity to terminate those items prior to taking ownership?
No. The process required to terminate these restrictions is often complex and costly. Termination of restrictions will require, at least, a majority vote by members of the Homeowner’s association, and may require litigation.
What if I have further questions regarding Condominium and PUD ownership?
Ask any questions you may have before you buy! Don’t wait to take ownership to find out about restrictions and regulations affecting your Homeownership rights.Back to Table of Contents
Home | About Me | Contact Me | EXIT Internet Par... | Beaufort SC Real ... | Beaufort County F... | Real Estate Training | Empty Nest? | Selling Your Home? | 27 Selling Tips | Real Estate Inves... | First Time Buyers | Expired Listings | Moving | Buyers Agent | What is a Short Sale | | (HAFA) Short Sale | Dataw Island Fees | Retirement Specialis | Best Beaufort SC ... | | Lowcountry Fish Camp | Real Estate For Sale | Beaufort County S... | Richard Neill Rea... | Office | Open Houses | Search Properties | Advanced Search | Map Search | Million Plus | Search Port Royal | Search Lady's Island | Search Fripp Island | Search St. Helena | Search Harbor Island | Search Dataw Island | Moderate priced | $200,000-$400,000 | $400,000-$600,000 | Search Beaufort City | Waterfront Homes | Search All Beaufort | Search Burton | Foreclosures | Short Sales | Historic Homes | Condos | Beach Properties | $600-One Million | Okatie | Jasper County | | South of Broad River | Sellers | Digital Marketing | Moving Help | Mar.2011 Sales | Bft. Sales Report | What to Know Befo... | Sell Your Home | Seller Mistakes! | 15 Questions to A... | 27 Free and Easy Fix-ups | Mortgage Rates | Bft SC Top to Retire | Bft. Phone Numbers | About Coffin Point | Bluffton Community | Hunting Island St... | Foreclosure Tips | Beaufort Co. Taxes | Water View of Home | Neighborhood Fees | Cat Island Community | Beaufort Activities | Harbor Island SC | Short Sale | SC Tax Information | Lands End Communi... | Buyers | Guide to Upscale ... | Featured Listings | Port Royal | Port Royal SC Lots and Land for Sale | Port Royal SC Townhomes and Condos for Sale | Port Royal SC Short Sale Properties for Sale | Port Royal SC Foreclosures for Sale | Port Royal SC Waterfront Homes for Sale | Port Royal SC Homes for Sale Under $100,000 | Port Royal SC Homes for Sale Between $100,000-$200,000 | Port Royal SC Homes for Sale Between $200,000-$300,000 | Port Royal SC Homes for Sale Between $300,000-$400,000 | Port Royal SC Homes for Sale Between $400,000-$500,000 | Port Royal SC Homes for Sale $500,000 and Over | Lady's Island | Lady's Island SC Homes Under $100,000 for Sale | Lady's Island SC Homes Between $100,000 to $200,000 for Sale | Lady's Island SC Homes Between $200,000 to $300,000 | Lady's Island SC Homes Between $300k to $400k for Sale | Lady's Island SC Homes Between $400,000 to $500,000 for Sale | Lady's Island SC Homes $500,000 and higher for Sale | Lady's Island SC Waterfront Property for Sale | Lady's Island SC REO's/Foreclosures for Sale | Lady's Island SC Short Sale Property for Sale | Lady's Island SC Condos/Townhomes for Sale | Lady's Island SC Lots and Land for Sale | St Helena Is. | St Helena Island SC Homes Under $100,000 for Sale | St Helena Island SC Homes $100,000 to $200,000 for Sale | St Helena Island Homes $200,000 to $300,000 for Sale | St Helena Island SC Homes $300,000 to $400,000 for Sale | St Helena Island Homes $400,000 to $500,000 for Sale | St Helena Island Homes $500,000 to One Million for Sale | St Helena Island SC Homes One Million and Higher for Sale | St Helena Island SC Waterfront Properties for Sale | St Helena Island SC REO's/Foreclosures for Sale | St Helena Island SC Short Sales Homes for Sale | St Helena Island Condos/Townhomes for Sale | St Helena Island SC Lots and Land for Sale | Beaufort | Beaufort SC Homes $500,000 and Up | Beaufort SC Homes for Sale $400,000 to $500,000 | Beaufort SC Homes for Sale $300,000 to $400,000 | Beaufort SC Homes for Sale $200,000 to $300,000 | Beaufort SC Homes for Sale $100,000 to $200,000 | Beaufort SC Homes for Sale Under $100,000 | Beaufort SC Lots and Land for Sale | Beaufort SC Short Sale Properties for Sale | Beaufort SC Townhomes and Condos for Sale | Beaufort SC Foreclosure Properties for Sale | Waterfront Properties for Sale in Beaufort SC | Beaufort SC Historic Homes for Sale | Beaufort SC Homes for Sale Million Plus | Blog