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CHAPTER 23: Condominiums, Cooperatives, PUDs, and Timeshares
I. Discuss the history of shared facilities housing
II. Define Condominium in your state These are statutory in every state. Discuss whatever pecu-
A. Separate and Common Elements liarities your state may have in its statute. Use Internet.
B. Owners’ Association
C. By-Laws
D. CC&Rs
E. Deed
F. Voting Rules
G. Board of Directors
H. Annual Meetings
III. Explain Condominium Management Stress the importance of professional management.
A. Maintenance Fees
B. Reserves are necessary Discuss whether or not maintenance fees are a part of the
C. Discuss Property Taxes and Insurance lender’s escrow accounts.
IV. Discuss the unique character of Condominium
Financing
A. Loan Terms
B. Deposit Practices
V. Define and give example of Condominium
Conversions
VI. Discuss the growing popularity of Carefree?
Condominium Ownership
A. Advantages of Condominium Living Too close?
B. Disadvantages of Condominium Living Spend time on this and warn of insurance issues and liabil–
C. Explain what to inspect before buying ity issues. Question condo owners in your class.
VII. Define Cooperative Ownership in your state Emphasize the “exclusionary” structure of co-ops and ben-
A. Financing e&ts of co-op living. Expense items are important for low
B. Default income (cheap) as well as high income (exclusive).
C. Resale
D. Government
E. Differences
F. Similarity
G. New Legislation
VIII. Define Planned Unit Development
IX. Explain the history and applicability of Resort
Timesharing
A. Define Right-to-Use Discuss the specialized market for timeshares and whether
B. Define Fee Simple or not your state’s licensing act requires licensure for sales
C. Define Costs personnel.
D. Define Benefits
E. Define Commitment
F. Define State Regulation
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397 419 Opening Remarks Start with a history of shared community ownership. Many think
condominiums are a new concept. Stress their history.
398 421 Condominium Local Distinction: Acquire a copy of your state’s condominium
act (if any) and address its most important features, such as rescission
periods. Consult your state’s attorney general for a copy.
Expanding the text: Distinguish a condominium (the owner does not
acquire title to any land) from a townhome (the owner does acquire title
to land, although it may be only that which lies directly beneath the
foundation wall of the separately owned dwelling).
400 422 Separate and Common Summary: Separate property is individually owned. The common
Elements elements are jointly owned by all of the individual owners.
401 423 Deed Stress: The deed used to convey a condominium is the same as
any other deed, e.g., warranty deed.
402 425 Property Taxes Stress: The difference between the hazard and liability insurance
and Insurance required for the common elements (which is purchased by the
Association) versus the insurance that an individual owner should
acquire.
If the unit is being rented, the owner of the unit should have
landlord insurance and the tenant should have tenant insurance.
404 427 Advantages of Stress: Discuss the advantages and disadvantages of condominium
Condominium Living living. As future salespeople, students should be aware that there
are just as many reasons to buy as not to buy.
405 428 Before Buying Expanding the text: As future licensees, students should be aware
of buyer’s needs, especially during the purchase of a condominium (or
cooperative).
It is particularly important for buyer’s agents to help the buyer locate
the CC&Rs, by-laws, and articles of incorporation before purchasing
the unit.
Examples: A buyer who will be driving a company vehicle (with attached
advertising logos) may not be allowed to park overnight. Likewise,
motorcycles and RVs may be prohibited.
405 429 Cooperative Stress: Distinguish cooperatives from condominiums, especially
Apartments that co-op purchasers do not receive a deed.
The term proprietary lease may appear contradictory to the students.
Explain that proprietary means ownership (of stock) and lease means a
right to use (an individual dwelling).
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406 430 Default Stress: The fact that other cooperators must pick up the tardy
cooperator’s share is one of the main reasons why co-ops are not
as popular as condominiums.
408 432 Planned Unit Stress: A PUD can be defined as a “subdivision of sub-divisions.”
Development That is, most fully developed PUDs are made of mixed-use
development, i.e., single-family and multi-family residential,
commercial, and light manufacturing.
408 432 Resort Timesharing Local Distinction: First, address the general concept and rapid
growth of the timeshare industry. Second, address your specific
state laws and last, cite both good and bad examples of time
sharing within your state (or elsewhere).
410 435 Wrap-Up 1. Condominiums are governed by state statute, not traditional
real property law? (True)
2. Condos are generally conveyed with warranty deeds? (True)
3. In a cooperative, each unit dweller owns his unit (apartment)
in severalty? (False. The unit is generally owned by a corpora–
tion. The unit dweller has a proprietary lease.)
4. Nearly all timeshares fall into one of two formats. Name
them.
(Right-to-use and Fee simple ownership, conveyed by a
recordable deed.)
This chapter covers the methods of dividing the land. The
condominium declaration is covered in some detail. Other
topics include management, maintenance fees, taxes,
insurance, and &nancing. The advantages and disadvantages
of condominium living are listed along with a list of things to
check before buying. Other condo topics include a discussion
of legislation, condo conversions, and physical appearance.
Cooperative apartments, PUDs, and timesharing are also
covered.
Comparison of Estates
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