What Is A Planned Unit Development (PUD)?
When hunting for your next home, you might come across communities labeled as PUDs, or planned unit developments. These are developments made up of one or several property types, including single-family homes, townhomes and condos.
What sets these developments apart, though, is that residents own both their property and the lot on which it sits. There are common areas that are collectivity owned by the PUD's residents. A homeowner's association, made up of officers elected by the PUD’s owners, govern the management and operation of these common areas.
Is a PUD the right housing choice for you? That depends on how comfortable you are following the rules set by a homeowners association and how excited you are to live in a self-contained community.
What Is A PUD In Real Estate?
Buying into a PUD is much like purchasing a condo: You own your home but share ownership of the development's common areas with your neighbors. Unlike with a condo, though, you can purchase homes of many different types, including townhouses and single-family homes.
PUDs don’t have to follow traditional zoning standards. Neighborhoods in a PUD can contain single-family homes, condos, townhomes, stores, restaurants and public assets such as community centers and swimming pools all clustered together. Some homes might be zoned to sit close to the edge of roads, while others might be required to sit several feet back. Often one set of blocks in a PUD will contain residences that look completely different from those in another set.
PUDs also often feature amenities that are difficult to find in other developments, everything from high-end fitness centers to stores and luxury swimming pools. The goal is to create a sort of miniature city for residents. They can bank, exercise, dine out and in many cases even go to school without leaving the PUD.
When you buy property in a PUD, you must also become part of a homeowners association. This association is responsible for operating and maintaining the public areas of the PUD, including any swimming pools, community centers, meeting rooms, playgrounds and recreational areas. The homeowners association is responsible, too, for upkeep of the PUD’s entrance areas and green spaces.
Homeowners associations are generally run by an elected board, whose members vote on landscaping contracts, maintenance schedules and the requirements for newly built housing. You’ll pay dues to this association each month. The association’s rules might also govern how you maintain your own home, possibly restricting the type of plants you can grow, the color you can paint your property and even how high the grass in your front yard can be.
Characteristics Of A PUD Development
While all PUDs are different, they all contain certain characteristics:
- PUDs feature different types of homes that sell at various price points. In some PUDs this might mean larger and smaller single-family homes. In others, it might mean a wider mix of housing types including townhomes, condos, row houses and single-family homes.
- These developments often have their own shopping districts, bars, entertainment centers and restaurants. Residents of the community can typically walk to these amenities. The goal is to create a type of self-contained community in which residents could conceivably fulfill all their shopping, dining and entertainment needs without leaving the PUD.
- Many PUDs might even contain office buildings, cultural centers and schools. Again, this helps create a self-contained community in which residents can learn, work and live without leaving the development.
- The common areas are often a selling point of PUDs. Many of these developments contain playgrounds, swimming pools, gyms, community centers and meeting rooms. Residents might need to swipe a key card to gain access to some of these community areas. The PUD’s homeowners association generally oversees the operation and maintenance of these common areas.
- Extensive landscaping is another key element of most PUDs. The neighborhoods making up a PUD are often surrounded by wooded areas, ponds, flower gardens or well-manicured lawns. Again, homeowners associations are tasked with maintaining these landscaped areas, a job that includes hiring landscaping companies and reviewing and renewing these companies’ contracts.
- Security is another draw for many who buy into PUDs. Some PUDs are gated communities, requiring residents to show identification or swipe a card when they enter the development. Others maintain their own private security. The residents of the PUD pay for these services through their homeowners association dues.
How To Determine If A Property Is Part Of A PUD
Interested in buying a home in a PUD? You’ll have to first determine if the property you are buying sits in one of these developments. The easiest way to tell whether a home you are considering is part of a PUD is to ask your real estate agent first. But you should also know that PUDs typically have the following characteristics:
- When you buy into a PUD, you will own both the home and the lot on which it sits.
- A homeowners association owns and maintains the common property and amenities that all owners use, such as playgrounds, parks, swimming pools and gyms.
- PUDs require members to join this homeowners association and pay HOA fees to it.
- Only the residents of a PUD and their authorized guests can use its amenities
- Specific rules dictate how property owners can use or modify their homes. The PUD’s rules, for instance, might state that you can only plant flowers native to the area or that you can only paint your home in one of five colors.
PUD Vs. HOA
There is a significant difference between a PUD and a homeowners association, better known as an HOA. The PUD is the development itself. The HOA is a sort of governing body made up of residents of the PUD. This association owns the common areas of the property – including parks, ponds, playgrounds, swimming pools, gyms and recreation centers – and is responsible for managing and maintaining them.
When you buy into a PUD, you must join its HOA and pay dues to it, usually every month. A board, whose members are elected by the residents of the PUD, runs the HOA.
Pros And Cons Of PUDs
As with all real estate, PUDs come with their own pros and cons.
Some of the benefits of living in a PUD include:
- Amenities: PUDs usually feature such community amenities as swimming pools, community centers, restaurants, stores, playgrounds and landscaped parks. By living in a PUD, you get access to all these common areas.
- Convenience: Because many PUDs have their own retail and dining districts, you can eat and shop without leaving your community. Some PUDs even have their own onsite public schools.
- Land ownership: When you buy into a PUD, you purchase not only your home, but also the land on which it sits. This could boost the value of your purchase.
- Security: Many PUDs come with their own onsite security, which could boost your peace of mind.
- Aesthetics: Most PUDs place restrictions on the types of buildings and landscaping that can fill their spaces. This could be an inconvenience if you really want to paint your home a color that is not allowed. But these rules do promote a specific look that might appeal to you.
There are negatives with living in a PUD, too. These include:
- Rules and regulations: You will have to follow covenants, conditions and restrictions when living in a PUD. You might be restricted, for instance, from building your home too close to the road, painting it a certain color or planting non-native plants. You might also need to keep your lawn a certain height.
- HOA fees: You will pay monthly fees to the homeowners association that operates and maintains the common areas of your PUD. That could be an expense of hundreds of dollars every month.
- Proximity to other neighbors: Depending on what neighborhood you buy into, your home might be located close to your neighbors. If you prefer large swaths of empty space, a PUD might not be the best choice for you.
- Selling your home: The PUD you choose might be perfect for you. But when it’s time to sell, you might struggle to find buyers for your home. Not all buyers want the rules and restrictions that come with living in a PUD. This might make it more difficult for you to find buyers when you’re ready to sell your home.
The Bottom Line
Buying a home in a PUD comes with plenty of benefits, including access to common-area amenities. But this type of homeownership isn’t for everyone. You’ll need to pay HOA fees and follow your development’s rules and regulations.
If you are interested in buying a home in a PUD, it’s smart to get approved for a mortgage. That way, you’ll know how much home you can buy before you start looking at properties.