A friend recently gave me a copy of the August Condominium Owners Association of Sun City newsletter referring to my letter (“COA should advise they are not condos,” Sun City Independent, July 7, 2021).
Today, I opened the Independent and found more misinformation in a letter to the editor by Mr. Walczak, COA president. I take issue with both writings. It states that Realtors are misrepresenting what the COA claims are condos and calls them PUDs because it is “easier to sell a PUD.” Realtors do not misrepresent what a property is!
There is often confusion when an homeowners association board member believes they are a condo HOA. These homes are not condos, they are legally planned unit developments or townhouses. The COA is spewing false and detrimental information to its members and others. There are differences between financing or refinancing a PUD or condo. He cites Maricopa County and Arizona state statutes but states no supporting facts to support his assertions. The Arizona Department of Revenue Land Manual determines land use for all properties in Arizona and the definitions of Condominium and PUD are found in Chapter 5, page 5.2. That is fact! All counties follow this Land Manual.
Mr. Walczak claims to have read the Manual, but he must not have understood what he read. Here is link to the Land Manual, bit.ly/3rKnXOi.
This is a direct quote from the Arizona Department of Revenue Land Manual, Chapter 5.
“In condominium projects, all of the land in the project is commonly owned, with an undivided interest in the land vested in each parcel or unit. In townhouse (PUD) projects, the owner of the unit individually owns the land under each unit. In some cases, the owner of a townhouse (PUD) unit will also own a small area directly in front, to the rear or to the side(s) of the unit. The balance of the land area in the PUD project will normally be commonly owned by a homeowner’s association that is owned and controlled by the individual unit owners. In limited cases, the balance of the land in the PUD project is also owned by the individual unit owners, as an undivided interest in the land vested in each unit, similar to a condominium project.”
“In many areas the terms condominium and townhouse are used interchangeably. However, this is an incorrect practice. Condominiums are only created under Title 33, by the Uniform Condominium Act. Per A.R.S. § 33-1202(10), a ‘condominium’ is defined as ‘...real estate, portions of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of the separate portions. Real estate is not a condominium unless the undivided interests in the common elements are vested in the unit owners.’ Note that while ‘undivided interests’ may be held by the owners of individual townhouse units in a planned unit development, the PUD is not a ‘condominium’ by definition.”
The language is clear, if your property’s legal description indicates a lot within a tract, you own the land and improvements as described, with an undivided interest in the property beyond your lot boundaries. This is the HOA’s common area and defined in a tract map. The Land Manual describes this as a “individual townhouse units in a planned unit development.” Read the last sentence in the second quoted paragraph, “Note that while ‘undivided interests’ may be held by the owners of individual townhouse units in a planned unit development, the PUD is not a ‘condominium’ by definition.” That is why the Maricopa County Assessor places “Type” as “Townhome/condominium” on the tax bill for both residential properties.
As matter of public record, Mr. Walczak signed a PUD Rider when he purchased his Gemini Twin home in Sun City. If his bank believed the home was a condo, a Condominium Rider would have been signed. Mr. Walczak owns a PUD not a condo. I would suggest that he and the COA board members read the entire Chapter 5 of Land Manual and perhaps contact the Arizona Department of Revenue with any questions.
A number of years ago, I was a board member at the COA and was told by banks, title companies, Realtors and assessors that the organization did not represent condominiums. I verified the vast majority of multi-family homes in Sun City are PUD/townhomes. I attempted to encourage the COA to change its name and inform members what they are. They refused and I resigned in protest.
If you live in a Sun City HOA, please do your homework. Read the Land Manual, call a local title or mortgage company and show them your deed and CCRs.