Condos, Coops, PUDs & Timeshares

Chapter 23

Desire of Land-Use Efficiency

Land Scarcity: Incentive for Multi-unit configurations Houses= 4 to 5 per acre Cities: Little space w/in reasonable distance

Benefits: Carefree living – few chores Security Pools, tennis, etc. not affordable individually Americans want to own not rent

Condominiums Must be legal framework for condo ownership Address the subdividing of airspace Can take any number of configurations

50 stories, two story garden apt, row houses, etc Combine condos with retail & office space

Separate & common elements Master deed for development w/ deeds for each unit Self Gov’t (all are members) w/ Board of Directors

Owners’ Association: Can be trust or unincorp’d Controls, regulate, maintain the common elements Rules for OA are bylaws – recorded w/ master deed

Covenants, conditions & restrictions: i.e. house rules Many were rental apartments: Often w/ deferred

maintenance

Condo Management & Finance OA employs a management company

Care day-day & duties set by OA OA assesses maintenance fees Each unit pays property tax & insurance

Generally no assessment for common area Each unit’s value reflects common area ownership

Each unit financed separately Terms are separate; Foreclosure separate

Advantage: More units, more homeowners Disadvantage:

Close proximity; Collective decisions; Problem to building is everybody’s problem; Often have to serve on BOD, etc.

Cooperative Apartments Formed where condo laws were unavailable Formed a not-for-profit corporation Shares sold to tenants (cooperators) $ = down pmt & mortgage loan established

Often the cost and debt is very large & difficult Some states have tried to make this easier

This and cost of maintenance & insurance is very high Title in the name of the corporation Owners get lease to apartment Gov’t of building=Board of Dirs of corporation

Articles of incorporation + by laws + covenants, etc. No sale of unit, just sale of shares Few are being formed now that condo laws are in

place

Planned Unit Development (PUD) Owners in PUD get: Land House on land Ownership in community assoc. that owns common areas

Covenants & restrictions are in place for each unit Association can dictate many aspects of your house and

lot CCRs are meant to maintain value of all properties Density restrictions (e.g., 8-10 uynits per acre

PUDs are detached houses, common wall houses & row houses & townhouses

Resort Timesharing Dividing and selling living units at vacation facilities

for specified lengths of time ea year Marketed by resort developers Timeshared: Hotels, motels, condos, townhouses,

lodges, villas, RV parks, campgrounds, houseboats and cruise ships

Right to use format: Set fee for set time & all rights cease for buyer

Fee simple: Buyer obtains a fee ownership in unit & owns unit for set

time into perpetuity & sale is like any RE sale Problems: Same place year after year; Costs; Fraud

(e.g., projects not completed, deeds not sent, multi-sales of same unit & time)