Condo Complex in a PUD Zone

by Rosie Walter
(Michigan)

Visitor Question: Good Morning, I am an Appraiser working on an assignment within a condominium complex that is located in a zoned PUD district.

The condo complex is brand new, which is why I am so surprised that it is within a PUD. I thought that a PUD development must be such that the homeowner owns the land front and back of their dwelling.

Is it just considered to be "non-conforming" for the condo development?

I would really appreciate your help with this answer.
Best,
Rosie Walter

Editors Reply: The two things, condominium development and PUD (planned unit development) sometimes work together, but not necessarily. At the simplest level, let's think of condominiums as a legal form of ownership and the PUD as a way of seeking and obtaining local government approval to build in a certain pattern.

We did a very cursory check to make sure Michigan wasn't drastically different in some way, but it certainly doesn't look as if that is the case. So we can say with some confidence that a condo complex means that some property is owned in common and is called common ground. Typically that might be some open space, streets, and maybe a clubhouse or other amenities, but it also may be the exterior of buildings including that of private homes.

In a condo complex, there are usually deed restrictions spelled out in a master deed, and almost always there is a homeowners association that is set up and perhaps loosely governed by the covenants in the master deed. A developer sets up the condo arrangements, although of course it can only be built when approved by the local government.

But primarily keep focused on condo as meaning a form of ownership.

Now let's contrast that with the PUD, which is solely a type of development approval format that a local government permits in some or all circumstances. The rules for a PUD are either established within the zoning ordinance, where PUD is simply a distinct zoning district just as Residential is a zoning district, or sometimes there is a freestanding PUD ordinance that explains both the process for approval and any rules for PUDs.

What you understand about a PUD requiring front and back yards must be strictly a local law provision in either the zoning ordinance or PUD ordinance. There is nothing customary on a nationwide basis about this.

Typically a developer will apply for a PUD when what he or she wants to do would not be allowed otherwise in the zoning district. For example, they might want smaller lots, narrower setbacks from the street or property lines, or groupings of units close together with interspersed green space instead of evenly spaced subdivision-style houses. The purpose of a PUD is to allow flexibility due to unusual site conditions, non-traditional subdivision or development design, perhaps greater density than might otherwise be allowed, and creativity.

A PUD might feature condo style ownership, in which there are some common areas maintained by the homeowners association, or it might have no association at all and function like a typical subdivision in which no areas are owned in common.

So a condo complex could lie within a PUD, or it could be approved by the local government through any number of other arrangements. A PUD might consist of condos, or every homeowner might own an individual lot and nothing else. You can have a condo that is not in a PUD, and you can have a PUD that is not condo style.

In sum, don't get those two things tangled up in your mind.

It is also possible that in a condo complex, people might be the sole owners of their front and back yards. Typically this is not true if they are large front and back yards, but it's pretty common to have some small yards that belong to the individual home owner, with the condo association only owning and maintaining any larger green spaces in the development and maybe some common features such as streets, tennis courts, club houses, swimming pools, and the like.

In summary, we think you are just encountering a development arrangement that you haven't seen before, and there is nothing illegal or inappropriate in what you are seeing. If you keep in mind that condos are about ownership and PUDs are about flexible development approval rules on the part of the local government, you will do well.

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