What's the difference between a condo and a PUD?
Many of my clients who are looking at condos will assume that all more-densely populated developments are condominiums, whether they are looking at converted apartment buildings, new townhouse developments, duplex or triplex communities, or planned single-family homes with very small lot sizes.
However, the appearance of the community does not determine whether a complex is a condo or a PUD (planned unit development); it is a matter of ownership and how the community was set up. Some communities look like PUDs, but are actually condominiums. For example, Lakewood in South Windsor, CT is a PUD (sometimes called PAD for Planned Area Development) whereas Whitney Crossing in Vernon, CT (which is a community of detached homes) is listed as a condominium.
In a condominium, the individual units are owned by each tenant, but all the common areas are owned by the tenants jointly (as tenants in common). In a planned unit community, each tenant owns the unit and may have rights and responsibilities to the property the unit sits on; ownership of the common areas is shared among the association.
The Homeowner Association fees vary widely among condos and PUDs; some PUDs have very low fees, but not always. A prospective buyer should find out exactly what amenities are available and what the HOA fees cover. Some condominium communities seem to have higher fees but may include heat, hot water, basic cable, etc. Communities with very low fees may only pay for snowplowing and maintenance of common grounds.
In addition, don't rely on MLS to find out if a community is a condo or a PUD/PAD. I have seen some units in the same complex listed as condos, while other units are listed as PUDs/PADs.
A prospective buyer must delve deeper into the bylaws and written documents of the community to find out the extent of one's rights and responsibilities. Both types of ownership may have restrictions on such things as pets, maintenance, improvements, subleasing, insurance, etc. The legal documents will tell you the boundaries of your property, your responsibilities for repairs (as well as the community's responsibilities), what changes if any you can make to the exterior, etc.
Why does this matter to a buyer? You will want to know this information before making a decision about purchasing, so don't wait until you have written a contract before getting the information. The type of ownership will have a great impact on the type of financing and insurance you will need.
This post describes very general distinctions between condos and PUDS, but prospective buyers should be aware that the terms are not interchangeable. Please verify type of ownership to see if the property would be right for you.
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Peggy Chirico, REALTOR®
Serving the Greater Hartford Area
Prudential CT Realty
peggychirico@gmail.com
860-748-8900
If you are buying or selling a home in Hartford County or Tolland County, please call me, email me, or visit my website. I would be happy to help you with your home search or provide a market analysis for your home.
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Wow, there seems to be a very fine distinction between the two. I guess your would have to do the extra investigating you mention for each place so that you would be passing the right information of to your client. Again, wow!
That's a great post, Peggy! I remember many years ago I had a transaction on a PUD here in Medford. The file went to underwriting and the underwriter said I needed to change some of the loan parameters since this was a "condo". I insisted that no, the unit was NOT a condo, but rather a townhouse located in a planned unit development. Underwriter response: "Well it LOOKS like a condo!"
My husband is guilty of the same thing and I have to gently remind him..."dear, a condo is not an architectural style"... :-)
Hi Brenda - You are right! Whether it's a condo or a PUD, each can be so different from others in that category that the best approach is to read the legal documents. There is so much variability.
Hi Karen - And these days with all the changes in the mortgage business, it definitely makes a difference as to whether the unit is a condo or a PUD. I really appreciate your comments.
Peggy, the general public does not know the difference, and you have spelled it out quite plainly! GREAT post!
Hi Joan - Thanks! And as Karen pointed out above, some people in the business don't know either!
Very nice job on this blog Peggy! This is definitely very helpful information for somebody looking for a home!
Thanks, Carolyn! I appreciate your comments.
Peggy, very well written! Thanks so much for sharing!!!
Hi DeeDee - Thanks--and thanks to Joan for reblogging!