FHA Condo Approvals – Another Site Condo Question

FHA Condo Approvals – Another Site Condo Question

Last week, I received a call from a member of the Board of Directors for a condominium project in Yuma, AZ.  He called me after reading my blog article about site condos.

He said that his project consists of 12 units, all of them detached from each other.  Each unit owner is completely responsible for the maintenance of his/her own unit which includes the exterior, front and rear steps and the attached deck or patio.

That sounds like a site condo to me.

Here’s the catch: to each unit is allotted an adjacent piece of land onto which the unit owner can build a garage.  The land is a “limited common element” until the unit owner builds on it.  If he/she never builds on it, it remains a “limited common element”.

The question was: “are we site condos?”

The answer was: “I don’t know.”

In order to provide to him an accurate answer, I requested that he send to me the Declaration so that I could read how it was written.

Upon review of the Declaration, it stated very clearly that the unit consisted of the interior and exterior of the structure and included any deck, patio and front and rear steps.  The appurtenant piece of undeveloped land was to remain as a “limited common element” until such time the unit owner was to build on that land.

At that point, the improvement to the land – that is, the physical structure – was to become part of the “unit” and the unit owner was to bear its cost of maintenance.  This is acceptable so long as the garages or other improvements to the appurtenant land were not attached to those owned by other unit owners.

Notwithstanding any other facet of the condominium project, this would meet the criterion of being classified as a site condo because the unit owner is fully responsible for the maintenance of not only the interior and exterior of the unit, but also for the interior and exterior of the garage, were it to be built.

Incidentally, the condominium project met the other 4 requirements to be considered a site condo so it was not necessary for this project to gain HUD’s approval in order for the units to be eligible for FHA financing.