Condominium Land Units (vacant land lots) - Tilted Forum Project Discussion Community

Felicity · 02-03-2006, 04:58 PM

I posted this in the New Home Building thread I started in the "How To" forum, but maybe I could get an answer here...

Does anyone have info about "Condominium Land Units?" The "property lines" are the unit divisions. What is the difference between a land development that is a regular subdivision, and a condominium land unit development? Why would a developer chose to do it that way? Are there risks or things I should consider before buying a lot that is contracturally structured this way? Any info is appreciated--web searches haven't been very productive.

The_Jazz · 02-04-2006, 08:18 AM

I could be misinterpreting this, but I think I can help. Having read the other thread, I'm making some assumptions.

Condominium land units basically mean that you have the right to build on a piece of land, but you don't own it. The land that your house is on, as well as all the other houses in the neighborhood and any common property (clubhouse, pool, entrance, etc.) are all owned by the homeowners association. You are beholden to the association in what you can and cannot build and how it looks, but you get the benefit of lower property taxes. I'm not sure what state you're in, but there could be a very good legal reason to do it, especially if you are in a "construction defect" state, generally meaning NV, CA, AZ, OR, WA, TX, CO, FL and SC. I would make sure that you read the bylaws very carefully before purchase, especially if you plan anything out of the ordinary and that you talk to the developer at length about what you plan on building and what the finished product will look like. For instance, if you're planning to build a Cape Cod and only one story stucco houses are allowed, there's going to be a problem. Depending on the state, the courts generally find for the association if they have given you plenty of warning, etc.

Cynthetiq · 02-04-2006, 08:52 AM

it's looks like a community of homes, smells like a community of homes, but it's a condo complex, so street maintenance, snow removal, gardening are all community type expenses as if you lived in a condo.

Felicity · 02-04-2006, 09:03 AM

Thanks for the responses...here's the deal...As I understand it...a condo is where you own the interior walls of your unit and you own a share of the community's common areas. In a "land unit"--your "4 walls" are the lot's property lines plus 15 feet underground and 50 feet overhead. The land and everything on it are owned by the lot owner, but the association can dictate such things as what types of fencing (the one we're looking at says no chain-link, for instance), shutters, b-ball hoops--it depends on the by-laws of the community. I've read through the "by-laws" and it all seems acceptable--I just am curious about the pros and cons of such a contract. Somebody's got to be benefitting from this type of contract--I just want to know who--and what makes it more or less appealing to prospective buyers.

Any more thoughts?

BTW--we did put an offer in and we received a counter offer...so there is nothing to lose at this point if we decide not to go through with the purchase. We're getting the written counter offer on Monday, so we have a bit of time...

Thanks again for any and all comments.

The_Jazz · 02-04-2006, 09:06 AM

What state are you buying in? Believe it or not, that could make a major difference in the benefits for the developer, especially if they are trying to avoid litigation down the road.

Felicity · 02-04-2006, 09:07 AM

Quote:

Originally Posted by Cynthetiq

it's looks like a community of homes, smells like a community of homes, but it's a condo complex, so street maintenance, snow removal, gardening are all community type expenses as if you lived in a condo.

And the community has been added to the county roads, so the city we're near does plowing--and there is city water and city sewer as well as other ammenities.

Felicity · 02-04-2006, 09:07 AM

Quote:

Originally Posted by The_Jazz

What state are you buying in? Believe it or not, that could make a major difference in the benefits for the developer, especially if they are trying to avoid litigation down the road.

North West lower Michigan...

Rodney · 02-04-2006, 10:07 AM

My mother lives in a similar community, although it's a mobile home / modular home community. Everybody owns their own lot and the city maintains and polices the streets, but there is a common meeting hall, park, and RV parking lot maintained by the homeowners association. The homeowner's association (HOA) has control over use of the common areas, general appearance of the homes and use of the property, and (and this is a big and), _who lives there._ It was originally commissioned as a 45- and older community, and a few years ago it was changed to 55-and-older because the primarily older population wanted mainly retired people who weren't doing inconvenient, disruptive things that increased traffic -- like commuting to and from work.

As to value: since an HOA can intrude on what an owner can and can't do to a house, some people are not as eager to buy in. There is also the matter of the monthly fees, which can be substantial. And frankly, HOA politics are not always fun: there can be factions, favoritism, backbiting, all sorts of things. All the things that happen in any community organization -- only these people have control over how you live. And can even -- as in my mother's case -- control who you can or can't sell to.

In today's tight real estate market, people have been less picky in some areas about buying property that falls under an HOA. But if the market ever slacks off (_when_ it slacks off), a whole lot of people will chose an unregulated home over an HOA-regulated home, all other things being equal. That's my opinion, based on the experiences of my friends and myself. And I live under an HOA and am okay with it; but if I moved, I'd look for a non-HOA controlled home. There's just an extra layer of hassle, even in a good group like the one we belong to, that it would be nice not to have.

Also, if there are restrictions in the convenant as to who can buy in there -- seniors only, adults only, etc. -- that's going to restrict the pool of people who _can_ buy your house; and restricting the pool of potential buyers means there's less demand and, potentially, a lower price.

Why would the developer do this? I'm not sure. There could be a lot of different reasons. Maybe he wants to get the HOA maintenance contract for himself, which can be a pretty penny. If the development includes some kind of group-owned feature like a golf course, he could make a pretty penny by running it. Maybe the lot sizes are below standard for the area, but smaller lot sizes are allowable for certain types of planned unit developments (like in my mother's, and in my own). That would allow him to cram in more units than otherwise. Maybe he wants to market the community in a certain way to a certain group of people, and the convenants are written in such a way to discourage certain _other_ groups of people -- young families, etc. -- from settling there.

The_Jazz · 02-04-2006, 10:20 AM

Quote:

Originally Posted by Rodney

Why would the developer do this? I'm not sure. There could be a lot of different reasons. Maybe he wants to get the HOA maintenance contract for himself, which can be a pretty penny. If the development includes some kind of group-owned feature like a golf course, he could make a pretty penny by running it. Maybe the lot sizes are below standard for the area, but smaller lot sizes are allowable for certain types of planned unit developments (like in my mother's, and in my own). That would allow him to cram in more units than otherwise. Maybe he wants to market the community in a certain way to a certain group of people, and the convenants are written in such a way to discourage certain _other_ groups of people -- young families, etc. -- from settling there.

You are correct that a developer may want to keep ahold of the maintenance contract for himself, assuming that he owns a maintenance contractor. All of these are very valid points as to the "why" for this kind of development. There's one other that I should point out - the owners may want to hand over control of the landscaping and other kinds of maintenance. With a larger project, the fees for this kind of thing go down pretty drastically. The larger the assocation and common areas, the lower the per square foot price for the maintenance which would be covered under your dues. Also there are potential benefits for other kinds of maintenance, like window washing, street sweeping, etc. The streets and roads become private property instead of public, and the assocation can decide to fence itself off. Given that you're in Michigan, there's no reason to believe that they are doing this to avoid future litigation, like they would in say Nevada. Another reason for going this route would be to assure that the developer gets first right of refusal to build any or all of the homes, so they'll keep you from bringing in your own contractor, who may or may not do a better job or build it substantially differently than what they have in mind.

Felicity · 02-04-2006, 10:23 AM

Per your post, Rodney, I think the "calibre" of home is a main issue. The lots are big, and there are square footage minimums for the constructions as well as a few things concerning natural tones and out buildings (although there are a few blue and green houses, and almost everyone has a shed)--so I think a major issue is maintaining similar sized houses and maintaining property values by having home plans "approved" before building. On the one hand--that's a good thing: I think--it will make sure a two room purple and lime manufactured home with an 8 foot rusty chain linked fence surrounding isn't built next to a half-million dollar mansion....but it also has the downfall of having to run what you want to do by a group of strangers who get a vote in what your home looks like.

Your point about the "market" affecting the sellability is well noted.

Thanks!

Felicity · 02-04-2006, 10:25 AM

Quote:

Originally Posted by The_Jazz

You are correct that a developer may want to keep ahold of the maintenance contract for himself, assuming that he owns a maintenance contractor. All of these are very valid points as to the "why" for this kind of development. There's one other that I should point out - the owners may want to hand over control of the landscaping and other kinds of maintenance. With a larger project, the fees for this kind of thing go down pretty drastically. The larger the assocation and common areas, the lower the per square foot price for the maintenance which would be covered under your dues. Also there are potential benefits for other kinds of maintenance, like window washing, street sweeping, etc. The streets and roads become private property instead of public, and the assocation can decide to fence itself off. Given that you're in Michigan, there's no reason to believe that they are doing this to avoid future litigation, like they would in say Nevada. Another reason for going this route would be to assure that the developer gets first right of refusal to build any or all of the homes, so they'll keep you from bringing in your own contractor, who may or may not do a better job or build it substantially differently than what they have in mind.

You have been MOST helpful Jazz on both of these theads I started.. Bless you for your generous assistance

The_Jazz · 02-04-2006, 10:42 AM

Quote:

Originally Posted by Felicity

You have been MOST helpful Jazz on both of these theads I started.. Bless you for your generous assistance

No problem. Just let me know if I can be of any assitance in the future.

Rodney · 02-04-2006, 11:57 AM

Quote:

Originally Posted by Felicity

Per your post, Rodney, I think the "calibre" of home is a main issue. The lots are big, and there are square footage minimums for the constructions as well as a few things concerning natural tones and out buildings (although there are a few blue and green houses, and almost everyone has a shed)--so I think a major issue is maintaining similar sized houses and maintaining property values by having home plans "approved" before building.

Thanks!

Well, that all makes sense if the developer isn't planning on building all the homes himself -- either because he doesn't want to, or can't afford to. If you're marketing lots to an upscale crowd, you want to assure them that the neighborhood they're building in will also be upscale, because nothing less than a home of a particular type will be tolerated. He's selling a certain kind of dream and, since he's not building it himself, he needs the HOA convenant to enforce that dream.

There's a very famous planned development on the north coast of California called Sea Ranch, in which everyone buys a lot and build their own home. _But_ all the aesthetics for the project were worked out in advance by the developer in consultation with a famous architect/artist, and all homes have to comply with those aesthetic rules to ensure that they continue the Sea Ranch look -- which, I must say, is pretty unique. The point being, you only buy a lot at Sea Ranch if you're ready to build a Sea Ranch-style house. And if fact, that uniform "look" is the selling point for the entire development.

Felicity · 02-04-2006, 12:45 PM

Thanks to you too Rodney. Your input was also helpful--and Shakran gave some very good info on my other thread..' Preciate it, all!

02-03-2006, 04:58 PM	#1 (permalink)
Felicity Upright	Condominium Land Units (vacant land lots) I posted this in the New Home Building thread I started in the "How To" forum, but maybe I could get an answer here... Does anyone have info about "Condominium Land Units?" The "property lines" are the unit divisions. What is the difference between a land development that is a regular subdivision, and a condominium land unit development? Why would a developer chose to do it that way? Are there risks or things I should consider before buying a lot that is contracturally structured this way? Any info is appreciated--web searches haven't been very productive. __________________ *I know God will not give me anything I can't handle. I just wish that He didn't trust me so much.* --Blessed Mother Teresa

02-04-2006, 08:52 AM	#3 (permalink)
Cynthetiq Tilted Cat Head Administrator Location: Manhattan, NY	it's looks like a community of homes, smells like a community of homes, but it's a condo complex, so street maintenance, snow removal, gardening are all community type expenses as if you lived in a condo. __________________ I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not. What's the best nation in the world? DO-NATION!

02-04-2006, 09:03 AM	#4 (permalink)
Felicity Upright	Thanks for the responses...here's the deal...As I understand it...a condo is where you own the interior walls of your unit and you own a share of the community's common areas. In a "land unit"--your "4 walls" are the lot's property lines plus 15 feet underground and 50 feet overhead. The land and everything on it are owned by the lot owner, but the association can dictate such things as what types of fencing (the one we're looking at says no chain-link, for instance), shutters, b-ball hoops--it depends on the by-laws of the community. I've read through the "by-laws" and it all seems acceptable--I just am curious about the pros and cons of such a contract. Somebody's got to be benefitting from this type of contract--I just want to know who--and what makes it more or less appealing to prospective buyers. Any more thoughts? BTW--we did put an offer in and we received a counter offer...so there is nothing to lose at this point if we decide not to go through with the purchase. We're getting the written counter offer on Monday, so we have a bit of time... Thanks again for any and all comments. __________________ *I know God will not give me anything I can't handle. I just wish that He didn't trust me so much.* --Blessed Mother Teresa

02-04-2006, 10:23 AM	#10 (permalink)
Felicity Upright	Per your post, Rodney, I think the "calibre" of home is a main issue. The lots are big, and there are square footage minimums for the constructions as well as a few things concerning natural tones and out buildings (although there are a few blue and green houses, and almost everyone has a shed)--so I think a major issue is maintaining similar sized houses and maintaining property values by having home plans "approved" before building. On the one hand--that's a good thing: I think--it will make sure a two room purple and lime manufactured home with an 8 foot rusty chain linked fence surrounding isn't built next to a half-million dollar mansion....but it also has the downfall of having to run what you want to do by a group of strangers who get a vote in what your home looks like. Your point about the "market" affecting the sellability is well noted. Thanks! __________________ *I know God will not give me anything I can't handle. I just wish that He didn't trust me so much.* --Blessed Mother Teresa Last edited by Felicity; 02-04-2006 at 10:26 AM..

02-04-2006, 12:45 PM	#14 (permalink)
Felicity Upright	Thanks to you too Rodney. Your input was also helpful--and Shakran gave some very good info on my other thread..' Preciate it, all! __________________ *I know God will not give me anything I can't handle. I just wish that He didn't trust me so much.* --Blessed Mother Teresa

02-04-2006, 08:18 AM	#2 (permalink)
The_Jazz Asshole Administrator Location: Chicago	I could be misinterpreting this, but I think I can help. Having read the other thread, I'm making some assumptions. Condominium land units basically mean that you have the right to build on a piece of land, but you don't own it. The land that your house is on, as well as all the other houses in the neighborhood and any common property (clubhouse, pool, entrance, etc.) are all owned by the homeowners association. You are beholden to the association in what you can and cannot build and how it looks, but you get the benefit of lower property taxes. I'm not sure what state you're in, but there could be a very good legal reason to do it, especially if you are in a "construction defect" state, generally meaning NV, CA, AZ, OR, WA, TX, CO, FL and SC. I would make sure that you read the bylaws very carefully before purchase, especially if you plan anything out of the ordinary and that you talk to the developer at length about what you plan on building and what the finished product will look like. For instance, if you're planning to build a Cape Cod and only one story stucco houses are allowed, there's going to be a problem. Depending on the state, the courts generally find for the association if they have given you plenty of warning, etc.

02-04-2006, 09:06 AM	#5 (permalink)
The_Jazz Asshole Administrator Location: Chicago	What state are you buying in? Believe it or not, that could make a major difference in the benefits for the developer, especially if they are trying to avoid litigation down the road.

02-04-2006, 10:07 AM	#8 (permalink)
Rodney Observant Ruminant Location: Rich Wannabe Hippie Town	My mother lives in a similar community, although it's a mobile home / modular home community. Everybody owns their own lot and the city maintains and polices the streets, but there is a common meeting hall, park, and RV parking lot maintained by the homeowners association. The homeowner's association (HOA) has control over use of the common areas, general appearance of the homes and use of the property, and (and this is a big and), _who lives there._ It was originally commissioned as a 45- and older community, and a few years ago it was changed to 55-and-older because the primarily older population wanted mainly retired people who weren't doing inconvenient, disruptive things that increased traffic -- like commuting to and from work. As to value: since an HOA can intrude on what an owner can and can't do to a house, some people are not as eager to buy in. There is also the matter of the monthly fees, which can be substantial. And frankly, HOA politics are not always fun: there can be factions, favoritism, backbiting, all sorts of things. All the things that happen in any community organization -- only these people have control over how you live. And can even -- as in my mother's case -- control who you can or can't sell to. In today's tight real estate market, people have been less picky in some areas about buying property that falls under an HOA. But if the market ever slacks off (_when_ it slacks off), a whole lot of people will chose an unregulated home over an HOA-regulated home, all other things being equal. That's my opinion, based on the experiences of my friends and myself. And I live under an HOA and am okay with it; but if I moved, I'd look for a non-HOA controlled home. There's just an extra layer of hassle, even in a good group like the one we belong to, that it would be nice not to have. Also, if there are restrictions in the convenant as to who can buy in there -- seniors only, adults only, etc. -- that's going to restrict the pool of people who _can_ buy your house; and restricting the pool of potential buyers means there's less demand and, potentially, a lower price. Why would the developer do this? I'm not sure. There could be a lot of different reasons. Maybe he wants to get the HOA maintenance contract for himself, which can be a pretty penny. If the development includes some kind of group-owned feature like a golf course, he could make a pretty penny by running it. Maybe the lot sizes are below standard for the area, but smaller lot sizes are allowable for certain types of planned unit developments (like in my mother's, and in my own). That would allow him to cram in more units than otherwise. Maybe he wants to market the community in a certain way to a certain group of people, and the convenants are written in such a way to discourage certain _other_ groups of people -- young families, etc. -- from settling there.