There’s quite a bit of confusion around the difference between common interest developments (CID) , condominiums, and planned unit developments (PUD). What do these labels mean, and how does anyone know which one is which? Where do townhomes fall in this list? And more importantly, why do they matter?
CID, PUD, and Condo: Ownerships Explained
Part of the confusion stems from the fact that there are two things to consider: the architecture of the buildings and the type of ownership.
- What is a condominium or condo? A condominium is a type of ownership of the real estate, not an architectural style. Condo ownership means that the purchaser has 100% rights to the unit and a percentage of ownership in the common lands (fractional ownership in common areas). Buyers of a condo are buying the space between the walls (and a fraction of ownership elsewhere).
- Condos can architecturally be a unit that resembles an apartment (what we colloquially refer to as a condo), a townhouse, or even a house.
- What is a townhouse (or townhome)? A townhouse is a type of building or architectural style, not the type of ownership involved. A townhouse could be a planned unit development (PUD) or it could be a condominium.
- Townhouses are often 2 stories and attached on at least one side, but they don’t have to be. They could be one story and they could be detached.
- A townhouse that’s a condo can look exactly the same as a townhouse that’s a PUD.
- What is a PUD? A planned unit development is architecturally either a townhouse or a house in which 100% of the unit plus the land under it is owned and the ownership of the unit also provides for a membership in the homeowner’s association or HOA. The HOA in turn owns all the common elements (such as private roads and amenities such as a pool, tennis court, parking lots, etc.). With a PUD, homeowners have an easement and rights to use the common area through their HOA membership.
- What is a CID? A common interest development, or CID, is a general term meaning the ownership of property in which there are “common areas” such as private roads, a pool, parking, tennis courts, utility rooms etc. These could be condo complexes or home owners associations with houses, townhouses, or other types of homes.
Local examples: In Los Gatos we have some freestanding houses (or properties with the only common wall being at the garage) which are in condo ownership on Ohlone Court. Same with the beautiful Villas of Almaden community. Both have “common areas” and mandatory membership in the home owner’s association.
How can you tell if the townhouse is in a PUD or Condo CID?
Sometimes the info is right in a property profile, which is very easy for most real estate agents to obtain through their preferred title company. More often, though, to be certain of the ownership type it’s necessary to review the preliminary title report.