Establishing Legal Ownership: Condos, Dwelling Parcels, PUDs

Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI



Establishing Legal Ownership:

Condos, Dwelling Parcels, PUDs


I've "been around" ...



Around the mortgage business, that is.  For over 40 years.


And during those 40 years,  besides being a Mortgage Originator, I also held an IL Real Estate Appraiser license for around 2 decades.  Plus I was honored to serve on my local Village Board.  


My time served on that Board included working on a Comprehensive Plan for the Village and on the Building and Zoning Commission.  Each capacity fulfilled provided me with amazing opportunities to learn and expand my knowledge.  Most importantly for me was what I learned regarding real estate and the financing of it.  The experience complemented my work immensely.


But even with all these varied opportunities and experiences that have come my way over the years, I still run into "firsts" as a Mortgage Originator.  Things I've just never heard of or encountered anywhere before.


And yep, as you've probably guessed, such was the case with one of my Borrowers last month ...


I was working on their application for mortgage and the property they were buying was described as an "attached dwelling in a Planned Unit Development".  The Planned Unit Development (commonly referred to as a PUD) was described as such in the legal description of the parcel, within the subdivision that the parcel was platted in.


Now it's important to note at this time:  The term "condominium" appeared nowhere within the legal description provided.  The first I saw the term used was on the appraisal which had been completed on a condominium form (known as the Fannie Mae 1073 for a conventional loan).


The questions that immediately popped into my mind were:  


  • Why was the appraisal for a PUD property being completed on a condominium form ... and appraised as such?
  • Why did the appraiser compare this PUD property to condos?
  • Why was the appraiser insisting this property was a condo after we had ordered the appraisal as a Single-Family Attached Planned Unit Development (PUD)?


As the Rules, Forms, and Approaches for each property type valuation are different ... different lending guidelines are required for each property type too.  Clearing this up was important.


After reading the submitted appraisal, I asked that the Condominium Declarations be provided to me.  We had not been provided any previously. 


Now I'll admit, there are always exceptions to the rule, but in the majority of instances, an Illinois property cannot be declared a legal condominium unit unless a Declaration of Condominium is recorded as part of the Illinois  Condominium Property Act.  So my next call was to the title company. 


That call confirmed that there was no Declaration of Condominium for the property or the immediate development.  The property was, in fact, a "dwelling parcel" and defined as such by the legal description and the original platting of the phase of the development it resided in.


So next, I asked for the survey of the property parcel be provided, since the defined lot lines and dimensions were unclear on the recorded Plat of Subdivision I found online.  Gaining knowledge of the defined lines and dimensions of the property site were important, as a PUD property differentiates itself from a Condo ownership by its very definition.


  • A PUD features an individually-owned parcel/site
  • Condo Ownership features a shared or common site 

Calls to the Management Company for the property association and the Township Assessor provided me little or no assistance.  The Management Company said they couldn't make a definitive determination regarding ownership status. The Township Assessor said that they treated the value and assessment of the property the same regardless of the property's legal ownership rights.


Notably, in my world, condominiums have no "land value", as no site or lot is individually defined or owned.  Yet, our subject property had a breakdown of land and building assessments.


My search for answers was becoming daunting, but as the LO and lender, we had to determine and document:


  • The true Property Rights (Ownership Type) of the Subject Property
  • The correct Appraisal.  We had to make sure the Appraisal Report was on the appropriate form for the financing program being utilized by the Borrower.  (And should the appraisal need to be corrected, make sure no additional fee is charged to the Borrower or to us for the correction performed.
  • That a Closing with correct documentation take place.


The Appraiser and the Appraisal Management Company finally came to agree with me that this property was NOT a condo.  They eventually identified the property for what it was ... a "dwelling parcel"- within a Planned Unit Development (PUD).


And even after all the questions, searches, and corrections ... the loan closed on time.  The post-closing process was completed.  


Now there is no doubt that this subject property was unique in some aspects.  How upon first look, it might appear much like a condo.


But it's vitally important that the legal ownership of property be determined and defined for the Borrower/Buyer of the property's sake (and the Lender's).  Those determinations and definitions go way beyond appearances or physical aesthetics of the property.  It took my scratching way below the surface to reveal the truth of this property.


There were many lessons to be learned from this property and its transacting.  But perhaps most notably it pointed out the importance of working with an experienced knowledgeable Loan Officer (and real estate agents) ... a professional willing to be dogged in their search for answers and facts.


Those answers and facts resulted in Buyers/Borrowers knowing for sure that the ownership in their property is held in its correct and legal form ... 



* When in need of Mortgage info or service when buying, refinancing, or Investing in a home in New Lenox - elsewhere in Chicagoland - IL & WI, contact me
I'll be happy to put my 40+ years of mortgage experience and expertise hard to work on your behalf.
I'm easily found at:

Gene Mundt
Mortgage Originator - NMLS #216987 - IL Lic. #031.0006220 - WI Licensed
American Portfolio Mortgage Corp.
NMLS #175656
Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656


Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 


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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Fred Griffin presently on Leave of Absence 12/07/2018 05:55 PM
  2. Gita Bantwal 01/03/2019 04:00 AM
Home Buying
Illinois Will County Joliet
Condo Specialists
Buyer Information - What Buyers Need to Know in Today's Market
real estate
legal ownership
dwelling parcels

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Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Great post, Gene... but at a certain point some of these issues when they get really complicated with legal documents need to be handled by an attorney and not by us agents as it could be misconstrued as as practicing law... then if we overstep what we can opine on, E&O doesn't cover us.

Dec 07, 2018 10:23 AM #1
Francine Viola
Coldwell Banker Evergreen Olympic Realty, Olympia WA - Olympia, WA
REALTOR®, In Tune with your Real Estate Needs

That is a very interesting story as it can take a lot of sleuth-work to determine if a property is a condo or a dwelling but your background certainly was extremely helpful in this.  Great story, and so glad it had a successful ending!

Dec 07, 2018 12:32 PM #2
Hannah Williams
Re/Max Eastern inc. - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-953-8818

How lucky was that buyer to have you in his corner  Gene  It is rather amazing that the management company had no idea whether or not this property was a condo  .Experience does make a difference .Thankfully you did you due diligence -- Great Post

It has been Featured in Bananatude


Dec 07, 2018 01:25 PM #3
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

A subject i could talk about for hours Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi. We have several communities that fall under this and are confused many times over by lenders  and appraisers. I have a REO listing, It was a PUD, the bank called it a single family with no pud and the appraiser called it a condo. The town tax card listed it as a single family condo with lot size 0. SO far it is on hold awaiting if there is a declaration of condominium.  

Dec 07, 2018 04:51 PM #4
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Hi Gene

That's quite a story but a great example of why questions reharding title, and other matters, need to be verified by the appropriate people. No doubt issues come up like this and don't get caught until too late.

Have a great weekend!


Dec 07, 2018 06:17 PM #5
Kat Palmiotti
Grand Lux Realty, Monroe NY, 914-419-0270, - Monroe, NY
The House Kat

Great job! I sometimes see homes listed incorrectly in our MLS. Usually it's easy to figure out which it is, but as you pointed out, that's not always the case!

Dec 08, 2018 02:56 AM #6
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Oh Yicks...often there are toooo many "assumptions" and sloppy title work that no one knows about...until....

Dec 08, 2018 08:29 AM #7
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

This is what people who need to borrow money search for i.e. someone who knows what they are doing and does it well. Anyone can do most anything but professionals guarantee results and outcomes. Case in point here

Dec 08, 2018 09:04 AM #8
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Gene - even after "x" years of/in business,  there is the opportunity to learn/experience "the firsts". Your post underscores that importance.

Dec 09, 2018 07:39 AM #9
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Congratulations on your feature recognition. Thanks for sharing this complicated and interesting experience.

Dec 09, 2018 08:09 AM #10
Debe Maxwell, CRS | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Boy, have I said I wish you were in my market, Gene?! What you went through is not commonly done here - it's just a hard "NO!" instead of trying to 'fix' the issue.

Sadly, most agents don't know how to read the CC&Rs or the tax records to determine the property description, EVEN when it's listed in the legal description! The most common offenders here (and it's not just new agents - many old agents make the same mistake) call a condo a townhome. While some lenders have products for both, some don't offer loans for condos (credit unions never do). 

Buyers agents make the mistake of not reading the proper documents either -and in NC, they can cost their buyers their Due Diligence fee (money down the drain because their lender won't finance condos)! Their excuse: "I'm not an attorney - I can't make that determination!" WHAT?!!!

Like you did, it just takes some research and you can save the entire team headaches by using the proper legal description on your listings...and appraisals! 

Dec 10, 2018 09:43 PM #11
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Gene, in my market, The Escrow Company with the Title Officer jointly have to make sure everything is clean and there are no Title Issues... we can not close in CA unless it is all cleared up, Endre

Dec 10, 2018 11:17 PM #12
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Again, I’m just revisiting this for a refresher and I love the term dwelling parcels as well! :)

Dec 10, 2018 11:35 PM #13
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Gene.  I've also run into this issue down here.  And, also in the reverse where we have a few single family home communities that are deeded as condo communities, yet own the land that they are on.

Dec 11, 2018 06:08 AM #14
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
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