Chic vs. Geek: Condos and Townhomes and PUDs – Oh, my!

You might think they’re all the same, but there are some important differences every homebuyer needs to know before getting started. Good thing we’re here!

CHIC (PEARL)

We’ve all seen condos listed as townhomes and vice versa. And then there’s planned unit developments (aka PUDs), which could be advertised as either one, but are more like single family homes. How do you know what you’re getting before you get too far down the road? If you want to know for sure, you have to look at the preliminary title report that sellers provide to buyers in their disclosure.

GEEK (KEVIN)

Okay, so what’s the difference between a PUD and an HOA? Well, PUDs are basically detached single family homes in a subdivision or other master plan community that offers additional amenities. In a PUD, you own the home, lot, and common area, and PUDs offer a more traditional landowner rights structure than HOAs do, given that HOAs impose particular regulations on residents.

Chic vs. Geek: HOA Fees

How can we avoid paying too much – or paying at all?

CHIC (PEARL)

You typically run into HOAs when buying a condo, townhouse, or single family home in a PUD (Planned Unit Development). HOAs are governed by Covenants, Conditions, and Restrictions (CC&Rs), which define the requirements and limitations of what you can do with your property based on standards agreed upon by the homeowners in the development. The goal of CC&Rs is to protect, preserve, and enhance property values in the PUD. Homeowners pay HOA fees to have a say in the rules and for collective maintenance of the community.

GEEK (KEVIN)

Ironically, HOA dues can go up if the HOA itself is poorly managed, especially in a self-governed community. As a buyer, you should look carefully at the governance of any HOAs you encounter in your search. For a quick stress test, check to see if they have a reserve fund or other contingency plans. It’s also common for self-governed HOAs to misforecast or underestimate future costs for maintenance, security, and other neighborhood concerns. All of this can lead to higher fees and more headaches. Here’s some more helpful info.