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HOA vs. PUD – What’s the Difference?

When purchasing a home in an urban area, you may recognize there are alternatives to the traditional HOA communities known as PUDs. But what is a PUD and is it the right fit for your needs?

HOA vs PUD – Is one better than the other?

When on the market for a new home, you may run across a variety of properties offering either a community with an HOA (Homeowners Association) or a PUD (Planned Unit Development). While HOAs are the most common type of community association, a PUD may be a better fit for your needs. When deciding between the two, it is important to have a full understanding of the pros/cons and differences of the communities to make the most informed decision.

What is a PUD?

PUD stands for Planned Unit Development and can be compared to a self-contained, small town. They are usually formed in condominium buildings but can also include single-family and townhome communities. PUDs can include unique amenities and can

be organized for commercial residential units. The commercial properties can include stores and restaurants to serve the need of residents for added convenience, as well as the public. PUDs also typically offer maintenance services to include exterior cleaning of the property and landscaping.

What is an HOA?

Many residents are weary about living in a community with an HOA, or Homeowners Association, as they are typically complex organizations with extensive regulations that make it hard for new homeowners or individuals not originally from the U.S. to understand. However, HOAs are widespread across the United States. These associations actively enforce the regulations set forth for the community to keep the neighborhood or building looking relatively uniform. They are typically formed at the construction of the community or condominium and transferred to the owners. It is important that prior to investing in a particular property within an HOA community that you are aware of the exact stipulations of the HOA and ensure there are not any regulations that could potentially cause issue for you down the road.

With that said, having an HOA can be very beneficial to residents, as it sets forth standards that help preserve property value and keep up the condition of the community.

So, what is the difference?

Distinguishing between an HOA and a PUD can be confusing because on the surface they look similar. However, in a PUD the individual unit owners have ownership of their home, lot, and common area. In the traditional HOA, there are additional and stricter regulations on ownership that all residents must abide by related to home exteriors, pet ownership, parking, and other community specifics. Like mentioned before, these rules are targeted at maintaining a certain uniformity and prestige to preserve or increase property value. HOAs are usually run through a Board of Directors composed primarily of volunteers from the community or outside experts brought in on a case-by-case basis.

In summary, the main difference between PUDs and HOAs is the owner of the land which the property sits on. PUDs offer a more traditional landowner rights structure than HOAs do, given that HOAs are imposing strict regulations on its residents. Therefore, when choosing between the two, you are essentially choosing how much

regulation you are looking for from your community.

How do you find out what type of community the property you are interested in is part of?

The best way to find out whether a certain property is part of an HOA or PUD is to ask your realtor and request a copy of the community bylaws. It is custom to present these documents to the prospective resident during the process of purchasing the property to sign and acknowledge the rules. By reviewing these bylaws, you will know exactly what is expected as a resident and you can make an informed decision on whether you wish to proceed with the purchase.

Pros & Cons of living in a PUD

The convenience offered to residents living in a PUD is seen as the top benefit for this type of community. They offer private amenities that go beyond the typical park, gym, or pool that most developments have. PUDs may offer restaurants, drug stores, specialty shops, privately owned roads, 24-hour security, and more. They are ideal for residents that want everything in one place. And while each PUD is different in its own respect, some may have stricter rules than others. It is wise to review the regulations with scrutiny so you avoid any surprises in the future that could cause you to incur more expenses than expected or keep you from making the renovations to the unit you had planned.

Keep these tips in mind during your home search to ensure you find the community that best fits your lifestyle. If you have any further questions regarding HOA vs PUD, reach out to your real estate agent or our team to learn more!

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