do we own the land for townhome/condo with a HOA? (West Jordan: short sale, real estate market)

[hueimo]

Need some help again. In regards to purchasing a condo or townhome that has a HOA in Utah, I heard that we only own 0.01 arches when it comes to owning the land portion and per what I have heard, this basically means that this really is just a corner of a living room….*confused..*
‘If’we don't own anything in regards to the land portion, then who does? The HOA or the builder? In case of an earthquake or whatever reason the building goes down, will the 'real' land owners, whoever that is get to take away the land and rebuild something else and hence we wouldn't not own anything at all if the building is gone? Can I rebuild my condo unit in case the building is gone in these situations? I would think the HOA would need to get involved....? so sorry for our inexperienced questions. Anyone had similar questions who lives in a townhome/condo?

Second question is, I heard that 20% of whatever percentage of homeowners that are allowed to rent out their units only applies to those who purchased the units as an investment property. What if I live here for 2-5 years and move out, rent it out, would that be a ok? I know different HOA is different, but was wondering if you have any similar experience in general to share. Thanks for sharing.

[kwm03160]

Originally Posted by hueimo

Need some help again. In regards to purchasing a condo or townhome that has a HOA in Utah, I heard that we only own 0.01 arches when it comes to owning the land portion and per what I have heard, this basically means that this really is just a corner of a living room….*confused..*
‘If’we don't own anything in regards to the land portion, then who does? The HOA or the builder? In case of an earthquake or whatever reason the building goes down, will the 'real' land owners, whoever that is get to take away the land and rebuild something else and hence we wouldn't not own anything at all if the building is gone? Can I rebuild my condo unit in case the building is gone in these situations? I would think the HOA would need to get involved....? so sorry for our inexperienced questions. Anyone had similar questions who lives in a townhome/condo?

Second question is, I heard that 20% of whatever percentage of homeowners that are allowed to rent out their units only applies to those who purchased the units as an investment property. What if I live here for 2-5 years and move out, rent it out, would that be a ok? I know different HOA is different, but was wondering if you have any similar experience in general to share. Thanks for sharing.

1. You don't "own" the land. You own a fractional portion of the common area (which includes the land). For example, if there are 200 units in your condo development, you own 1/200th of the condo common area (land, clubhouse, sidewalks, driveways, etc). You own an undivided percentage - that is, you can't specify what part of the condo common area you want to own. The homeowner's association technically "owns" the land, and you "own" a portion of the homeowner's association.

2. What you own is the inside of your condo (or townhouse, etc). Typically, the HOA owns the area outside of the inner walls (such as the exterior, roof, etc). You are also responsible for electrical/plumbing that only serves your unit.

2. The CC&R's (Condo Covenants & Restrictions) dictate what you will do in case the building needs to be rebuilt. Most of the time, they will rebuild unless it isn't cost feasible. The HOA has insurance in the case of fire. If you want to see what CC&R's typically look like, go to Rules & Regulations. It's a townhome community that I'm familiar with in West Jordan (no, I didn't live there). Towards the bottom of the page is a link to their CC&R's. The website also gives a good description of what a condominium association is and what they do.

3. The CC&R's or management rules will dictate how many units can be rented out. It all depends on the HOA. Most HOAs try to limit rentals as much as possible. Also, if there are too many rentals, it gets difficult getting an FHA loan. The rental number or percentage is not set in stone - it can be changed by the HOA. It's hard to answer whether you'll be OK living there a few years and then renting it out - it depends on what your HOA decides to do. As you may have noticed, I moved to Las Vegas, and decided to sell my condo unit rather than rent it out. HOA's in general don't like rental units, and more heavily enforce the rules for rented units.

Let me know what other questions you have!

[SouthernBelleInUtah]

Kwm03160 gave a great explanation. You really have to read the CC&Rs b/c some smaller townhomes might be set up a little differently and you would own the land under your townhome and part of the common areas. You might be restricted in fence height for the patio or type of fence to be used or what landscaping you can do to your individual unit or what outdoor decorations you can or must put up. I know someone in Calif. who HAS to put out the candellaria just like everyone else. It really pays to check things out!

[hueimo]

kwm03160, didn't know you moved, are your family all in SLC? what made you move, job? thanks.

[kwm03160]

I have some family in Salt Lake, but I was looking for something a little more liberal. I have a job where I can live wherever I want, as long as it has a good airport. With the Vegas real estate market being in the dumps, I was finally able to afford a home instead of a townhome/condo. So far, I'm happy. Who knows? I may end up moving back someday.

[hueimo]

Originally Posted by kwm03160

I was finally able to afford a home instead of a townhome/condo. So far, I'm happy. Who knows? I may end up moving back someday.

is that the bad townhome purchase experience you were talking about (not using a realtor) from the other forum subject? so sorry to hear about that....I'm trying to go for a short sale property, the sell agent told me if I don’t bring in a agent, I could save 3% of the sale price, if I do bring in one, there’s no bargaining space on the price, the bank will only take the listing price. I had my realtor dad in Hawaii speak to her and even he says it might be ok to not bring in an agent, but I read your experience and others, it still seems to be a bad idea….any comments on this? By the way, this realtor is related to the short sale property seller. My dad said that the title search is done by the same title company in Utah, the place will be sold as is due to the short sale, and the price is set by the bank, so there’s basically nothing to bargain about. the agent contract states that if bring in my own home inspector, so she really can’t hide anything. And if she doesn’t follow the contract which she’ll be prepping for me, isn’t she going to ruin her own rep? My dad will look over our contract on the side for me, even though he’s a realtor in Hawaii…any other drawbacks on not bringing in a buyer’s agent, what can they do differently other than looking over the contract? I assume they can be like a police officer and watch over the process to make sure and see if the seller is following the contract accordingly? Thanks for helping.

[kwm03160]

Originally Posted by hueimo

is that the bad townhome purchase experience you were talking about (not using a realtor) from the other forum subject? so sorry to hear about that....I'm trying to go for a short sale property, the sell agent told me if I don’t bring in a agent, I could save 3% of the sale price, if I do bring in one, there’s no bargaining space on the price, the bank will only take the listing price. I had my realtor dad in Hawaii speak to her and even he says it might be ok to not bring in an agent, but I read your experience and others, it still seems to be a bad idea….any comments on this? By the way, this realtor is related to the short sale property seller. My dad said that the title search is done by the same title company in Utah, the place will be sold as is due to the short sale, and the price is set by the bank, so there’s basically nothing to bargain about. the agent contract states that if bring in my own home inspector, so she really can’t hide anything. And if she doesn’t follow the contract which she’ll be prepping for me, isn’t she going to ruin her own rep? My dad will look over our contract on the side for me, even though he’s a realtor in Hawaii…any other drawbacks on not bringing in a buyer’s agent, what can they do differently other than looking over the contract? I assume they can be like a police officer and watch over the process to make sure and see if the seller is following the contract accordingly? Thanks for helping.

You'll be OK if you have done your research and don't believe anything they tell you... Always research what they say yourself. Make sure you get EVERYTHING in writing. It's a good idea to have your own home inspection done, even though the bank probably has also had one done.

My problem is that I'm not very good at negotiating and would rather just pay a fair price. It sounds like that since the bank names the price, you don't have much wiggle room anyway.

Good luck on finding your short sale! There are TONS of them out there right now.

[TWariner]

I live in a townhouse with an HOA, which I love. It keeps home values up. We own our lot. The front, backyard, and what the house sits on. I can't imagine not owning that. As for the common grounds, we just have rights to use the common areas and we all vote about what happens to them.

[newtoutah]

I never heard of not owning the land your house sits except a condo...of course here people call townhomes condos which i will never understand

[hueimo]

Originally Posted by TWariner

I live in a townhouse with an HOA, which I love. It keeps home values up.

why would a HOA keep up the home value? thanks.