It’s important to know the type of HOA you have because it affects many things, such as maintenance responsibilities, financing options, and property value. According to San Diego Union-Tribune, one-third of all California homes are in some kind of common interest development (CID), and that number is growing.
There are four types of CIDs in California: community apartments, stock cooperatives, condominiums, and planned developments. Each type of CID has a different real estate interest, so it’s important to understand the differences.
**Community Apartments**
These are often called “own-your-own” and are the simplest form of HOA. Instead of receiving a deed for a specific residence, owners receive a deed for an equal shared ownership of the entire property. Owners also receive an easement or license that specifies the dwelling they will occupy. Community apartments are usually older and unincorporated associations.
**Stock Cooperatives**
These are often referred to as “co-ops” and are a corporation where the HOA owns the entire property. Instead of a deed, each member receives a share of stock in the corporation and the right to occupy a specific residence. Co-ops are less common and are usually older HOAs.
**Condominiums**
Condominium projects are split into two parts: residences (called “units”) and the “common area,” which is everything else. Condominiums are not always attached housing. Sometimes they are detached housing, so it’s always important to check the deed and CC&Rs to be sure. The condominium plan defines what is the “unit” or “separate interest” and what is the shared “common area.”
**Planned Developments**
If a project is not a condominium, stock cooperative, or community apartment, but has a common area and the power to assess members, it is a “planned development.” These are often detached homes, but they can also be townhomes or patio homes. The real property interest in a planned development is called a “lot.”
**It’s important to know the type of HOA you have because it affects many things.** For example, condominium, co-op, and community apartment associations typically have greater maintenance and repair responsibilities than planned developments. Community apartments and stock cooperatives are less common and typically older, and financing options for those homes are very limited. This affects their desirability and value, so most community apartments and stock cooperatives will likely eventually convert to condominiums.
If you’re not sure what type of HOA you have, you can look at the CC&Rs or contact a real estate attorney. I can also help you understand the different types of HOAs and their implications. I’m a local Realtor with extensive knowledge of the San Diego real estate market and I’m dedicated to helping my clients navigate the complexities of buying and selling property.
To learn more about my services, visit https://robertluiswallace.com/services/.
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