Dwellings defined: Is it a Condo, a Co-Op or a PUD?

For many people, the first step in home ownership is to graduate from being an apartment renter to owning your own apartment in the form of an apartment-like home: a Condo, a Co-op or a PUD.

Suppose you're in the market for a home, and you've decided against a single-family, stand-alone house. In that case, you'll want to understand the differences between condos, co-ops and Planned Unit Developments, aka PUDs. Unlike ownership of a single-family home, where it's all yours, owning a Condo, a Co-op or a PUD is more complex and involves joint ownership with other neighbors and shareholders.

These places usually want safety and uniformity, and because you live in close proximity to — and share a lot of common space with — other owners, there are a lot of rules you have to follow and not a lot of privacy. 

Let's compare a condo to a co-op and a PUD

WHAT IS A CONDO?

Because a condominium complex consists of multiple units, it's kind of like an apartment building and can be one story, two stories, or multiple floors in a high rise. It could have dozens of units or be as simple as a two-unit building. 

Condos are popular in urban, high-density areas, with many shopping, dining, recreation and entertainment choices. Each will typically share a wall or two with other units, but they can also be in planned communities, like the ones you see surrounding a golf course out in the desert or rural areas.

With condos, each unit owner has the following:

• A deed to the unit purchased and individually owned.
• Ownership of the “air space” and interior walls within an individual unit.
• An undivided interest in ownership of common elements of the property

Additionally, condos have homeowner associations (HOA), requiring residents to pay monthly or yearly dues.  The HOA will have by-laws and something called CCRs (covenants, conditions and restrictions). These are basically rules that govern the exclusive use of lobbies, laundry, parking areas, and other common areas and dictate how unit owners are to share those areas.

The best part about living in a condo is that there isn't much responsibility on the homeowner's part to do any upkeep or maintenance. For example, if the roof needs repair, you share the financial burden with all the other condo owners instead of paying for the whole thing yourself. Additionally, some condos offer gyms, lounge areas, pools and other amenities that you might not be able to afford or have space for in a single-family home.

IS A CO-OP OR A PUD THE SAME AS A CONDO?

Co-Ops 

Like condos, co-ops (short for housing co-operatives) are multi-unit dwellings. The difference is that, with co-ops, all residents jointly share ownership in the entire building, including any common areas and the land it sits on. Co-ops are much less common than condos.

• Residents do not own real estate. Instead, they purchase stock in a non-profit corporation and occupy a specific unit allowed by contract. 
• Prospective “shareholders” must be approved by the Board of Directors, who may request extensive information regarding finances and employment.
• As part of the approval process, which can be very time-consuming, the board may also conduct interviews to screen for an applicant's background. 

PUDs

Short for Planned Unit Development, PUDs are usually townhouses, with each owner owning their unit and the land beneath it. Common areas are owned by an association of unit owners.

• In a PUD, the unit owner owns the interior and exterior of the unit.
• In addition to owning the land beneath the unit, they may also own space in front of or behind it.
• The HOA owns and is responsible for the upkeep of common interior areas and exterior concerns like landscaping, driveway maintenance and roof care.
• Like condos, PUDs typically have CCRs and rules that dictate how townhome neighbors share the common areas.

WHAT ABOUT DETACHED CONDOS?

There are always variations on a theme, and the real estate world is no different. In your search for a new place to live, you may hear of condominium complexes described as “attached” or “detached.” 

• Attached condos are units with one or more common walls adjoining another dwelling. These can be found in an urban high-rise building or a side-by-side townhouse. They can even be garden-style units with just a common wall between garages. 
• Detached Condos could be mistaken for freestanding single-family homes. They're structured like a condominium, where all owners pay for the upkeep of common areas, but each unit sits on a distinct parcel of land, which is not considered common property.

Now let's dig into condo loans! 

Movement Mortgage has condo loans specifically designed for homeowners interested in buying a condominium. 

Want to discuss condo financing options where you live?

Reach out to one of our local loan officers. We're here to help! 

Or, if you're ready to start now, you can always apply online!