De Minimis PUD

Definition

A De Minimis Planned Unit Development (PUD) refers to a form of real estate development where the common area characteristics have minimal impact on the overall property value. Unlike typical PUDs with extensive shared facilities and amenities, a De Minimis PUD features limited common areas, which could reduce the attractiveness or value enhancement usually derived from such developments.

Examples

High-Rise Condominium with Limited Common Areas: An example of a De Minimis PUD could be a high-rise condominium that only includes a lobby and hallways, without any additional recreation area like pools, gyms, or parks.
Minimal Community Features: A De Minimis PUD may consist of residential units with only necessary infrastructure such as parking lots and access roads, without additional community centers or clubhouses.

Frequently Asked Questions

What differentiates a De Minimis PUD from a traditional PUD?

A De Minimis PUD contains fewer and smaller common areas compared to a traditional PUD, impacting its overall property value minimally.

Are De Minimis PUDs less valuable than other PUDs?

Generally, yes. The limited common amenities in De Minimis PUDs contribute less to the property’s value increase compared to traditional PUDs.

Can a De Minimis PUD still be desirable for home buyers?

Yes, some buyers prioritize lower association fees and maintenance costs over extensive amenities, making De Minimis PUDs appealing due to their simplicity and affordability.

Do De Minimis PUDs have homeowners associations (HOAs)?

Yes, though more limited in scope, De Minimis PUDs typically have homeowners associations responsible for managing the few shared areas and overall maintenance.

Are there financing differences for De Minimis PUDs?

Financing criteria for De Minimis PUDs may differ slightly as lenders could consider the development’s reduced common amenities impacting the resale value.

Planned Unit Development (PUD): A large-scale residential and/or commercial development that includes varied land uses, such as single family homes, parks, and commercial spaces, within a single neighborhood.
Common Areas: Areas within a condominium or PUD that are shared by all property owners, such as lobbies, hallways, recreation centers, and gardens.
Homeowners Association (HOA): An organization in a PUD or condominium responsible for managing operations, regulations, and maintenance of common areas and shared amenities.
Condominium: An individually owned residential unit within a multiple unit building where owners have shared interest in common areas.

Online Resources

References

National Association of Realtors. (n.d.). Types of Real Estate Developments. Retrieved from NAR official website.
Federal Housing Administration. (2023). PUD Guidelines. U.S. Department of Housing and Urban Development.

Suggested Books for Further Studies

“Real Estate Principles: A Value Approach” by David C. Ling and Wayne R. Archer
“The Complete Guide to Property Development for the Small Investor” by Catherine Dawson
“Real Estate Development: Principles and Process” by Mike E. Miles, Laurence M. Netherton, and Adrienne Schmitz

Real Estate Basics: De Minimis PUD Fundamentals Quiz

### What is a De Minimis PUD? - [ ] A PUD with extensive amenities and common areas. - [x] A PUD with minimal common areas. - [ ] A development exclusive to high-rise buildings. - [ ] A PUD with no common areas. > **Explanation:** A De Minimis PUD is characterized by having minimal common areas which differ from traditional PUDs that include extensive shared amenities. ### Does a De Minimis PUD typically include a recreation area? - [ ] Yes, as a standard feature. - [x] No, it generally excludes such areas. - [ ] Sometimes, in all cases. - [ ] Only in urban developments. > **Explanation:** A De Minimis PUD typically lacks recreation areas, focusing on only essential common spaces like lobbies and hallways. ### How do common areas impact the value of a De Minimis PUD? - [x] They have a minimal effect. - [ ] They greatly increase the value. - [ ] They severely decrease the value. - [ ] They have no effect at all. > **Explanation:** The common areas in a De Minimis PUD have a minimal effect on the property's overall value. ### Why can De Minimis PUDs appeal to certain homebuyers? - [x] Lower association fees and maintenance costs. - [ ] More luxurious amenities. - [ ] Higher overall value. - [ ] Infrequent property rules. > **Explanation:** Homebuyers might find De Minimis PUDs appealing due to their lower association fees and maintenance costs, stemming from the limited common areas. ### Do De Minimis PUDs have less stringent financing criteria? - [ ] No, always more stringent. - [ ] Yes, always more relaxed. - [ ] Never. - [x] It can differ slightly. > **Explanation:** Financing criteria for De Minimis PUDs might vary slightly since the lack of extensive common amenities could influence the resale value. ### What is commonly found in De Minimis PUDs? - [ ] Extensive clubhouses and multiple recreation areas. - [ ] Shopping malls and office spaces. - [ ] Several parks and playgrounds. - [x] Limited common spaces like lobbies and hallways. > **Explanation:** Limited common spaces such as lobbies and hallways are common in De Minimis PUDs, distinct from extensive amenities found in traditional PUDs. ### In real estate terms, what defines the “common areas”? - [x] Shared spaces within the development. - [ ] Private gardens linked to individual houses. - [ ] Commercial offfice areas. - [ ] Isolated sporting facilities. > **Explanation:** Common areas are the shared spaces within a PUD or condominium, utilized by all property owners, such as lobbies, parks, and recreation centers. ### Are De Minimis PUDs more likely to be high-rise buildings? - [ ] Always. - [x] Not necessarily. - [ ] Only. - [ ] Mostly only in urban areas. > **Explanation:** De Minimis PUDs are not necessarily high-rise buildings; they can vary in structure and design. ### What governance structure is usually present in a De Minimis PUD? - [ ] None. - [ ] Government agencies. - [x] Homeowners Association (HOA). - [ ] Private security firms. > **Explanation:** A Homeowners Association (HOA) is commonly present in a De Minimis PUD to manage the limited common areas and overall maintenance. ### Who could consider De Minimis PUDs as less valuable properties? - [x] Appraisers and lenders. - [ ] Every homeowner. - [ ] All investors. - [ ] Administrators. > **Explanation:** Appraisers and lenders might consider De Minimis PUDs as offering less value due to their limited common areas and fewer amenities.