As population increases and available land becomes scarcer, Common Interest Developments (CIDs) have become a popular solution for builders and homebuyers alike. These developments offer efficient land use, convenient amenities, and affordable housing—but they also come with specific rules, responsibilities, and ownership structures that buyers should fully understand before purchasing.
What Are Common Interest Developments?
CIDs include communities where homeowners share ownership of certain areas and must follow rules set by a homeowners’ association (HOA). The two most common forms are:
- Condominiums
- Planned Unit Developments (PUDs)
While similar in some ways, they differ in how property and common areas are owned.
Key Features Shared by Condos and PUDs:
- Shared ownership of common areas
- Mandatory membership in a Homeowners' Association (HOA)
- Governing documents (CC&Rs and Bylaws) that outline rules, procedures, and responsibilities
- Monthly assessments used to fund maintenance, operations, and reserves
Important Distinction: Style vs. Ownership
Many buyers confuse physical design with ownership structure. For example:
- A townhouse can legally be a condo, PUD, or single-family home—it depends on how ownership is defined, not how the home looks.
- Terms like “Condo” and “PUD” refer to legal ownership interests, not building style.
Condo vs. PUD Ownership – What’s the Difference?
Condominium Owners:
- Own 100% of their unit’s interior (typically the airspace within walls, floors, and ceilings)
- Share fractional ownership of all common areas (e.g., hallways, pool, parking)
PUD Owners:
- Own the land (lot) and physical structure
- Gain access to shared amenities through HOA membership
- May or may not have fractional ownership of common areas, depending on project terms
What Do HOA Fees Cover?
Your monthly HOA assessments help fund:
- Maintenance of common areas (landscaping, amenities, walkways)
- Repairs and replacements (roofs, driveways, plumbing—especially in condos)
- Property insurance and legal fees
- Association management and reserve funding for future repairs
You’ll receive a pro forma budget outlining expected expenses and reserve needs prior to purchase.
What If I Don’t Pay My HOA Dues?
- Late fees will be added to your balance
- The HOA may place a lien on your property
- Continued delinquency could lead to foreclosure proceedings
Why Are CC&Rs and Bylaws So Important?
CC&Rs (Covenants, Conditions & Restrictions) and Bylaws define how you can use your property and the common areas. They may include:
- Use restrictions (e.g., no short-term rentals, no commercial activity)
- Lifestyle rules (e.g., quiet hours, pet limitations, exterior decor)
- Enforcement and penalty procedures
These documents are legally binding and apply to all owners and their successors. Violating them may result in legal action or fines.
When Will I Receive These Documents?
Sellers are legally required to provide:
- The CC&Rs and Bylaws
- The latest financial statement from the HOA
- Notice of any unpaid dues related to the property
These should be delivered as early in the transaction as possible. However, buyers are encouraged to request them up front and review them carefully—preferably with an attorney, if needed.
Can I Change the Rules After I Buy?
In most cases, no—at least not easily.Changing CC&Rs or Bylaws typically requires:
- A majority vote by HOA members
- Sometimes legal action
- Time and financial investment
It's best to understand and accept the rules before purchasing.
Final Advice: Ask Questions Before You Buy
Don’t wait until closing to discover restrictions that could affect your lifestyle or resale value. If you have concerns about ownership rights, HOA obligations, or specific rules within a CID, ask your real estate agent, title representative, or a real estate attorney before moving forward.
