Jun. 5, 2008 - Checking Out The Make And Model
Basically, the are three different types residential community associations. Some of them even have sub species. Allow me to expound.
First you have your Planned Community. In this type of community the homeowner owns their dwelling and the piece of land the dwelling is built on. All of the common areas and usually the amenities such as swimming pools, roads, clubhouse, tennis courts, etc., are owned by the community. If you live in, or are considering a community like this then you will be a member of either a Homeowners Association (HOA), an Owners Association, a Townhouse Association, a Property Owners Association (POA), or a Planned Unit Development (PUD).
The next model is the Condominium. When you live in one of these you are the proud owner of your living unit and an undivided interest in, or a percentage of the common elements. The common elements are everything except the actual living units. They can include things like the pool, the lobby, the corridors, the garage area, etc. The community association as a whole does not own any real estate.
That brings us to the third type, the Cooperative. What you own if you live in one of these is stock in the cooperative and a proprietary lease, also know as an occupancy agreement for your living unit. This lease defines your rights and obligations as they pertain to the living unit. The community association, which is usually set up as a not for profit corporation, owns all of the real estate.
Any one of these three types of associations can be stand alone or clustered. If they are clustered they are general either a Master or Umbrella Association, or a Mixed Use Development. The former would consist of more than one residential community association and the latter would consist of a mixture of residential, commercial, and maybe industrial use properties.
So you see, because each of these different associations depend upon a different form of ownership, it is very important that you, and more importantly your REALTOR®, know what you are getting into before you decide to buy in. Everybody will be happier if you know what you are getting into.
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