Posted by ToniK on 6/21/12 5:49pm
Msg #424274
A dilemma and weird situation
First and foremost I'm not a lawyer nor title abstractor.
I just did a signing in my community and the home is a townhouse BUT there was no PUD instead a condominium rider was attached. There is ONLY one condo community within my community which is listed on our HOA site. The homeowner states his home is not a condo. He attempted to find his previous title docs to compare. He didn't want to sign the condo rider. Now I called the after hours hotline and the rep said he needs to sign it and the community is classified as a condo.
Anyone have any takes on this? Homeowner wants to know how can he fix this if Title says they are correct...
| Reply by Carol Graff on 6/21/12 6:03pm
Msg #424277
I used to live in a TH in Maryland, however, it was classified as a condo. I did a loan the other day which was in a single family home, however, had a condo rider att'd. She said technically, these are condos.
| Reply by ToniK on 6/21/12 6:46pm
Msg #424287
Well Carol now there are townhome style condos. My ex husband has one but this home doesn't have a unit underneath or above it. Maybe townhomes and condo styles are becoming blurred but I haven't seen a condo with a basement nor attic.
| Reply by HisHughness on 6/21/12 6:15pm
Msg #424280
Townhomes and condos share much in common. The condo rider should work for either. The primary feature of each is community-owned property; both also usually have shared walls. The major difference is that condos typically don't extend individual ownership past the walls of the residence (patios sometimes excepted), whereas townhomes usually have inidividually owned yards.
Is the HO just being a butt, because he thinks condos are lower class than town homes? What is his objection, and how is the rider -- other than the name -- supposedly inapplicable?
| Reply by ToniK on 6/21/12 6:44pm
Msg #424286
Well the guy states condos don't have land. He has land and is assessed every year on his parcel of land. I'm no expert so I told him I'll voice his concerns with Title. He wants to know if he signs it the way it is how will that affect him when he attempts to sell it.
| Reply by Susan Fischer on 6/21/12 8:11pm
Msg #424296
Years ago, the insurance sold for condos was an HO3, if
memory serves. Anyway, bottom line, the buyer purchased a unit from the "paint in." Even the common walls were community property - hence the need for HOA fees. Everyone in the common-community contributes to the structural maintenance, common-areas, and appropriate insurances for the safety, liability, security of the owners, plus the responsibilities of local impacts on the larger community as to public services, local residential challenges (flooding, etc.) and compliances.
Townhomes seem a horse of a different color, but I'm old.
| Reply by MW/VA on 6/21/12 8:26pm
Msg #424298
A condo ins't classified by the type of structure, but by
the way the builder/developer set it up. If it's a condo he's paying condo fees. There are also PUD's that are set up as an HOA, and those also have fees.
The tc should have the accurate info. It would be my call to have him sign it & get it worked out with the tc during the RTC period.
He'd have to know if it's a condo though, because disclosure pkgs. are required prior to purchase.
| Reply by ToniK on 6/21/12 8:40pm
Msg #424303
Re: A condo ins't classified by the type of structure, but by
He does not pay condo fees. He pays the same HOA I pay. He said there are no additional fees. Either way he didnt sign it. Ill let Title handle it. Luckily for me if I need to go back out, he is a .5 mile walk from my home.
| Reply by pan/nd on 6/21/12 10:00pm
Msg #424311
Re: A condo ins't classified by the type of structure, but by
I agree with MW/VA...if he doesn't want so sign it...send the pkg back without his signature on
the form (and include a sticky note) and let them figure it out during the RTC period.
I've done enough of these to know that different title companies have different takes on
this situation.
| Reply by HisHughness on 6/21/12 11:36pm
Msg #424315
What is the definition of townhouse (versus condo)?
http://www.zillow.com/advice-thread/what-is-the-definition-of-townhouse-versus-condo-for-this-site/382181/
| Reply by JanetK_CA on 6/21/12 11:57pm
Msg #424316
Re: What is the definition of townhouse (versus condo)?
I always thought that with a town home you own the land and the air space above it. The explanations in the link (at least the last one) make a lot more sense to me, though, as far as a clear cut definition.
Interesting thread...
| Reply by snowflake/PA on 6/22/12 1:22am
Msg #424318
Re: Similar situation two evenings ago
PUD rider attached to mortgage. Explained what that was to B. "I don't live in a community and I don't pay HOA dues." After my going 25 minutes back and forth with title and lender, they requested he sign and they would fix the problem in the RTC period. B did sign and mentioned "I don't care what I have to sign to get the loan." Apparently, both title and lender went by what appraiser submitted. - - Lives in a communty and pays HOA dues. Quite truthfully had it been my loan, I would not have signed until a new title search was performed to be certain appraiser valued the right property
| Reply by VT_Syrup on 6/22/12 5:53am
Msg #424319
Re: Similar situation two evenings ago
I'm not an attorney and don't give advice on specific situations. As I understand it a condominium unit owner owns the inside of the unit. The exact part of the wall/ceiling/floor that constitutes the boundary could vary from state to state or as declared in the document that creates the condominium, but in my state the default is the unit owner would own the wallboard but not the studs for the ceiling and walls, and the tile/rug/finished flooring on the floor but not the subfloor. The unit owner would not own the land under the unit. If, for example, the condo were condemned for a new highway, there would be one deed from the condo association to the government for the whole condo, and the owners would divy up the payment according to their ownership interest; there would not be one deed for the common areas and a deed from each unit owner.
| Reply by sigtogo/OR on 6/22/12 11:08pm
Msg #424400
title and lender went by the appraiser? that would be scary!
I know I am a little late to this game but am very curious how you came to the conclusion that title and lender went by the appraisal? title examines all past recorded documents. The property was evidently found to have been organized as a PUD. PUD's can be condos, townhomes, single family, common wall, etc. Being in a PUD does not require the formation of a HOA unless it was organized as such. There could easily be both a condo and PUD rider to a TD or Mtg.
Someone in this thread mentioned that perhaps the lines have been blurred between condos and townhomes and that is most definitely the case. Townhomes historically have included the ground they sit on, condos did not. Both have common areas which vary from project to project, locale to locale. But now we have townhome style condos, condo style townhomes and every combination you could likely imagine. One reason for the blurring happened because developer/builders took existing or “canned” plans and tacked on their own specifics to create a not so clear condo, pud, townhome plan. They submitted them to planning departments that hadn’t really worked with that type of project, they were approved and so many new variations and definitions were spawned.
The naming of the project is not so important come time to sell or transfer as is the chain of title. The value of the property will be determined by the marketplace, not the title.
As an owner, I would certainly want to be knowledgeable about the development document, declarations and cc&r’s and understand the type of ownership interest. However, in the case presented by the OP, I would have suggested they sign and let title clear if needed. The good news is that when title makes an error in the type of rider that is attached, it can always be cured and at title’s expense. Also, it would be unusual for a lender to tell title that they used the wrong rider, not impossible, but unusual.
fyi: my backgound includes appraising, real estate development, loan origination and underwriting. I don't claim to be an expert just opinionated!
| Reply by RJE/MI on 6/22/12 6:10am
Msg #424320
Possible Site Condo?
This may be a site condo. The master deed of the development normally will state"Site Condo" in the description. The following is how a site condo works in Michigan: SITE CONDOMINIUMS IN MICHIGAN:
They have become a popular part of Michigan's Real Estate Development, because they allow developers to cut expensive government red tape and subdivision costs of the 1967 Michigan Subdivision Control Act.
You own your real estate lot and building, but usually things like parks or roadways are in common ownership by the condominium pooled ownership feature and they may or may not have monthly costs associated with them (they usually do not), that are the shared ownership items and the cost of their upkeep and finally what control over the common elements or private sections is empowered, but mainly it is a way to control the style and quality of housing within the varios "Site Condo" Communities.
Until the "plat act" is revised you can expect site condominium popularity to grow. In fact many new developments are " site condos " to the point that the local home buying market has become familiar with the term and accepting of the price benefits. Site Condominiums are Owned by Fee Simple Ownership and should not be confused with Other Condominium developments that have common Home Owner Associations and Common Elements. It is most appropriate to compare them with Subdivided, parceled and condominium lots.
This may be a site condo. The master deed of the development normally will state"Site Condo" in the description. The following is how a site condo works in Michigan: SITE CONDOMINIUMS IN MICHIGAN:
They have become a popular part of Michigan's Real Estate Development, because they allow developers to cut expensive government red tape and subdivision costs of the 1967 Michigan Subdivision Control Act.
You own your real estate lot and building, but usually things like parks or roadways are in common ownership by the condominium pooled ownership feature and they may or may not have monthly costs associated with them (they usually do not), that are the shared ownership items and the cost of their upkeep and finally what control over the common elements or private sections is empowered, but mainly it is a way to control the style and quality of housing within the varios "Site Condo" Communities.
Until the "plat act" is revised you can expect site condominium popularity to grow. In fact many new developments are " site condos " to the point that the local home buying market has become familiar with the term and accepting of the price benefits. Site Condominiums are Owned by Fee Simple Ownership and should not be confused with Other Condominium developments that have common Home Owner Associations and Common Elements. It is most appropriate to compare them with Subdivided, parceled and condominium lots.
I took this directly from Appraisersforum.com because the explanation is worded better than I could explain it.
This may be a site condo. The master deed of the development normally will state"Site Condo" in the description. The following is how a site condo works in Michigan: SITE CONDOMINIUMS IN MICHIGAN:
They have become a popular part of Michigan's Real Estate Development, because they allow developers to cut expensive government red tape and subdivision costs of the 1967 Michigan Subdivision Control Act.
You own your real estate lot and building, but usually things like parks or roadways are in common ownership by the condominium pooled ownership feature and they may or may not have monthly costs associated with them (they usually do not), that are the shared ownership items and the cost of their upkeep and finally what control over the common elements or private sections is empowered, but mainly it is a way to control the style and quality of housing within the varios "Site Condo" Communities.
Until the "plat act" is revised you can expect site condominium popularity to grow. In fact many new developments are " site condos " to the point that the local home buying market has become familiar with the term and accepting of the price benefits. Site Condominiums are Owned by Fee Simple Ownership and should not be confused with Other Condominium developments that have common Home Owner Associations and Common Elements. It is most appropriate to compare them with Subdivided, parceled and condominium lots.
This may be a site condo. The master deed of the development normally will state"Site Condo" in the description. The following is how a site condo works in Michigan: SITE CONDOMINIUMS IN MICHIGAN:
They have become a popular part of Michigan's Real Estate Development, because they allow developers to cut expensive government red tape and subdivision costs of the 1967 Michigan Subdivision Control Act.
You own your real estate lot and building, but usually things like parks or roadways are in common ownership by the condominium pooled ownership feature and they may or may not have monthly costs associated with them (they usually do NOT), that are the shared ownership items and the cost of their upkeep and finally what control over the common elements or private sections is empowered, but mainly it is a way to control the style and quality of housing within the varios "Site Condo" Communities.
Until the "plat act" is revised you can expect site condominium popularity to grow. In fact many new developments are " site condos " to the point that the local home buying market has become familiar with the term and accepting of the price benefits. Site Condominiums are Owned by Fee Simple Ownership and should not be confused with Other Condominium developments that have common Home Owner Associations and Common Elements. It is most appropriate to compare them with Subdivided, parceled and condominium lots.
I took this directly from Appraisersforum.com because the explanation is worded better than I could explain it.
| Reply by RJE/MI on 6/22/12 6:14am
Msg #424321
Sorry for the repeated info. Droid isn't user friendly today n/m
| Reply by Jessica Ward on 6/22/12 9:53am
Msg #424333
In my neighborhood, we have a planned community, with houses, condos, townhouses and apartments. I close a LOT of loans in this same neighborhood. I see condo riders on everything except the houses, and then a pud rider on the houses.
I live in a condo, over my neighbor's house. I have a small shared flowerbed space outside, I get assessed on land and building separately as well. I get assessed on land at 1/120th of the total 2.5 acre plot that the 120 units are built on.
| Reply by jnew on 6/22/12 3:00pm
Msg #424362
The first place to look is the real estate legal description. I realize that a lot of lenders do not put it in the loan package. The legal description normally references the Declaration of Condominium and will describe the unit along with the owner's fractional interest in any common elements. If the description does not include a Declaration of Condominium, you are not dealing with a condominium. Another thing to keep in mind is that a Condominium is all of the units and common areas and is not one single property. Most owners have a property interest in a single unit within the condominium.
| Reply by sigtogo/OR on 6/22/12 11:00pm
Msg #424399
true, jnew, but no doubt there are exceptions to that rule n/m
| Reply by sigtogo/OR on 6/22/12 11:12pm
Msg #424401
Toni, if you haven't had enough opinions, see my reponse
to snowflake.
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