When you are looking to buy a home, condominium or townhome that shares common ownership, common areas and has governing documents, it is very important that you understand the difference between condominium and planned unit development (PUD) in Greater Palm Springs and the Coachella Valley.
A PUD is a home where you own both the home and the “Lot”, ( unless it’s lease land ). It is inside of a community, with HOA Dues for upkeep of the common areas which are owned by all of the homeowners together, ( or the homeowners have easement rights ), such as possibly swimming pool(s), clubhouse, tennis courts, surrounding security wall, gate access, etc.. A PUD traditionally does not have a condominium plan referred to in the legal description, though rarely some PUD’s might have some elements that are governed similarly to condominium rules.
A condominium ( condo ) is a “Unit”where you own the air space inside of the unit, ( “Walls-In”, meaning you have ownership of the interior of your unit. ) and where HOA dues are paid by the unit owners for rights to use the common area of the condominium amenities such as possibly swimming pool(s), clubhouse, tennis courts, surrounding security wall, gate access, etc., including your unit “walls out”. A condominium has a condominium plan referred to in the legal description.
You should also carefully read all the Covenants, Conditions & Restrictions (CC&Rs) and Bylaws that you will receive from the title company. CC&Rs and Bylaws have limits and rules placed on a group of homes or condominium complex. These documents are the rules and regulations of the community that you as a buyer are agreeing to live by.
Buyers should be aware that CC&Rs 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; how many pets you can have; your rights to rent your home and more. CC&Rs and Bylaws are very important and should be thoroughly examined and understood prior to purchase.
As part of the escrow process, you will be asked to acknowledge receipt in writing of the CC&Rs and Bylaws so be sure to read them before you release your inspection contingencies! Any specific questions regarding the CC&Rs should be answered by a real estate lawyer.
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 own 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.
Also a buyer can get a better interest rate on an PUD compared to an HOA subject to the buyer’s credit. The above are basic descriptions and should not be considered legal definitions.
The terms Condominium and PUD refer to types of interests in land, not to physical styles of dwellings. Though the townhouse is the most common style of structure found in common interest developments in California, a townhouse might legally be a Condominium, a unit or lot in a Planned Development, or a single family detached residence. Article Source: clta.org
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