Purchasing Condominiums and Planned Developments
Cities continue to grow, and prime land becomes scarcer for planned developments. Builders are starting to maximize the use of land by offering home buyers common interest developments. These are in the form of condominiums and planned developments.
Keep in mind that these types of developments do not refer to a type of dwelling but to the interest in the land itself. The terms “condominium” and “planned developments” have a bearing on ownership rights that the buyer receives in the unit or property. It also pertains to the interest received in the common areas of that development.
These types of developments are convenient and affordable for first-time home buyers. Generally speaking, planned developments are characterized by a couple of things:
- Common ownership of private residential property.
- An established board that controls and governs the use of the common property. All owners must be members of the association.
- Documents that outline procedures and rules that run the association. All of the owners must follow the rules since they dictate each lot or unit as well as common or shared property.
- Owners finance the operation of the association. Additionally, the maintenance of the building or common properties is included as well.
Limitations of Condos and Planned Developments
There are advantages for homeowners when it come sot common interest developments. This can include low-maintenance living and access to some amenities that aren’t typically associated with owning a home.
On the flip side, there are limitations and restrictions that buyers will want to be aware of when they consider buying this type of property.
Rules of Shared Development Properties
- Condo owners typically own 100% of their unit and a fraction of common areas within the project. Common areas, however, can vary from project to project. Ownership rights are specified in the project’s declaration.
- Owners of planned developments will own the lot and the building. This makes them responsible for their own maintenance and improvements. Owners have the right to use common areas, but those areas are owned by a separate homeowner’s association. The lot members are members of this association. There are instances where planned development owners can have a percentage of common areas but typically just use them.
- A reserve fund is necessary to finance maintenance and upkeep. The reserve pays for associate management, legal, and insurance fees, too. Reserves tend to be factored into the homeowner’s assessment. When the purchase is made, the owners receive an operating budget or a financial statement. This is to give owners an estimate for what they will have to cover under the assessments.
- Fail to pay the assessment and you will be charged late fees. Keep not paying, and the association can place a lien on the unit or property which can lead to foreclosure.
- The community runs on the rules and guidelines of the association but can be restrictive. There might be curfews or bylaws, but these are important to this type of living. Buyers need to be aware of the rules before purchasing since failure to comply can be deemed breach of contract. The seller must provide a copy of all of the governing documents for the entire development.
- Rules for these developments are tough to change or challenge. Getting a restriction removed requires majority vote by the members of the association and can even mean legal proceedings.
Questions Answered for Condos and Property Developments
Should you have any questions about these types of developments or condos, call Super Brokers today. Our team has the expertise and experience that is necessary to answer any of your questions in a timely and accurate way.
The important part is that you understand everything laid out before you. This can be a complicated and confusing process, so don’t go it alone.