What Is a PUD Property?

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Category: Neighborhoods
What Is a PUD Property?
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The designers of Reston, Virginia, a suburb of Washington, D.C., left nothing to chance. Reston was one of the first centrally planned communities to pop up after World War II, when the “new town” concept involving Planned Unit Development (PUD) became popular.

What is a PUD property? It’s a development that combines various types of buildings and land-use all mixed in one self-contained development.

Reston’s construction drew attention—people hadn’t previously seen that comingling of retail, entertainment, and residential outside of a city. The town influenced the quasi-urban PUDs that have spread across the country.

What is a PUD property?

A PUD is a centrally planned community of single family homes, townhomes, and/or condos that may incorporate commercial space, communal space, and amenities such as parks, playgrounds, pools, and gyms. PUDs can look like normal subdivisions of single family homes or they can be elaborate mixed-zoning developments like Reston.

“I happen to be living in one in South Carolina where everything is shopping centers and retail and homes—condos, townhomes, standalone single-family homes,” said Clare Dubé, a broker for CMD Realty in Madison, Connecticut. “I think it makes it a diverse, walkable area.”

Any home within a PUD is a PUD property and owning one allows you access to all the communal space and amenities. Many PUD properties have a small private yard but also allow homeowners to enjoy the larger shared open spaces in the community. A PUD can also depart from existing zoning regulations.

“For example, say in the zoning for residential, you need an acre per house,” said Dubé. “Maybe in a PUD you get a quarter of an acre but there might be open common space.”

Those who buy PUD properties own the lot under their property. Most PUDs have a homeowners association (HOA), which manages the shared amenities and maintains the exterior spaces and building exteriors.

Pros and cons of a PUD home

The pros and cons of a PUD will depend on how the community is designed. Here are some things to look out for.

PUD pros

  • Convenience: PUDs often put a lot of amenities at residents’ fingertips, and oversee repairs and maintenance of those facilities and the community’s exterior.
  • Strong neighborhood network: Communal ownership and a well-planned mixed-use neighborhood result in strong local social networks.
  • Some protection for home values: Since the neighborhood is tightly regulated and benefits from the HOA’s upkeep, PUD home values are likely to remain relatively stable.
  • Fewer financial surprises: The HOA or other communal mechanism defrays a lot of the surprise costs that come with homeownership.
  • Attractiveness: PUDs often have a cohesive look and feel due to their central planning and regulation.

These pros make PUDS particularly suitable for older residents, points out Andrew Kerr, owner of real estate investment firm AMK Real Estate and founder of the blog FIbyREI.

“A great example is my parents,” he said. “When they retired they bought a single-family home in a PUD…For folks of retirement age, having these extra amenities and not having the requirement to do any exterior maintenance is a huge selling feature.”

PUD cons

  • High fees and financial insecurity: HOA fees can be expensive, and nonpayment will result in aggressive collection efforts.
  • Lack of aesthetic flexibility: PUDs may have restrictions that limit how you can modify or use your home.
  • Higher entry costs: As a buyer of a PUD property, you may pay a slight premium for the home to account for the community’s amenities.
  • Potential for interpersonal conflict: Any communally oriented living situation can become fraught if personalities clash or misunderstandings arise.

What you need to know about buying a PUD property

In contrast to buying a condo, buying a PUD property means purchasing not only the structure but also the land on which it sits. It’s vital that you and your lender establish the details of legal ownership of a PUD property before purchasing.

Before signing on the dotted line, check for any planned or existing restrictions that might affect your property. For example, you may be prevented from adding a detached workshop or guesthouse on your lot. Also be sure to think about whether you’ll use and enjoy the amenities on site.

It all comes down to what’s important to you

A PUD property has many advantages, especially convenience. There’s nothing quite like having a private swimming pool—or tennis court or gym, etc.—right next door and not having to maintain it yourself. The strong community element of a PUD can also be a great benefit.

However, PUDs come with restrictions, costs related to the amenities in the community, and more potential for complications with neighbors.

Whether a PUD property is right for you depends on what you’re looking for.

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Disclaimer: The above is solely intended for informational purposes and in no way constitutes legal advice or specific recommendations.

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