What is a Common Interest Development (CID)?
You see them all the time and you may have even owned one! A CID is the technical term for a condo/townhome. There are 2 main kinds of ownership (there are others but 99% of everything sold around here falls into one of these 2 categories.) 1. Single Family Home ownership and 2. Common Interest Development: CID Ownership.
Q: What is the difference between these 2 types of ownership?
A; With SFH ownership, you own (and are responsible for) the land, the building and often what’s above and below you. On your Title Report, you own “Lot XYZ”. With CID ownership, you own a share (typically 1 share per unit) of the total complex and you have exclusive use of your “UNIT ABC”. You don’t actually own your unit but you essentially own the air inside it. You also don’t own the land under your unit.
Q: Why does it matter?
A: When you buy a Lot (usually a SFH), you are responsible (both for better or worse) for everything that happens on the property. You trim the trees, you fix the roof, you pay for insurance, etc. When you own a CID, you join in with all the other owners in a Homeowners Association (HOA). The HOA typically has a set of rules for the complex and it will often hire an outside HOA management company to take care of many of the things that a homeowner typically has to pay for. The HOA charges its members a monthly HOA fee to pay for all the things it covers.
Q: What are the main things a HOA will cover out of the monthly fees?
A: The most common are things like: Maintenance of the common area (everything that isn’t a unit), common area utilities, a pool or tennis court, insurance, security, outside building paint, roof and fence replacement. Sometimes they’ll even cover certain utilities like garbage, water, basic internet, etc…each HOA has a different set of covered items, They also cover the cost of the HOA management and a large portion goes to cover FUTURE replacement cost of the covered items. EG: If the roof is replaced every 30 years, they charge each unit a prorated cost so that at the end of 30 years, there will be enough money in the bank to replace the roofs.
Q: What are typical HOA monthly fees?
A: They have gone up fairly dramatically in the last few years. Typically they are between $500-800 a month and vary depending on what the HOA covers.
Q: Does a HOA control what I can and can’t do?
A: Yes, HOAs have a set of rules that you receive when you buy into the complex. Typically those rules are enforced fairly strictly so that everyone in the complex benefits from them. Examples include: exterior paint color, window coverings, BBQs, loud noise, parking on the streets, short or long term rentals just to name a few. If you don’t like following rules and have never lived in a CID, you might reconsider!
Q: What’s the difference between a Condo and a Townhome?
A: Both are typically owned as a CIDs so the ownership is the same but usually the terms are used to describe what the buildings LOOK like: A Condo is typically a larger building with multiple floors, elevators, parking underneath, long hallways with units on each side. TOWNHOMES are usually multiple stories (2-3) with a door that leads to an outside area and often have their own garage. Think row houses.
Thanks to Owen Halliday, DRE 01453658 for this article