Condos, PUDs, Co-ops: What Is the Difference?

Blog Post Image
Real Estate

Condos, PUDs, Co-ops: What Is the Difference?


Owning a condo is similar to owning a house. You have a deed and mortgage and pay property taxes, but what you really own is “airspace.” Walls, floors, and ceilings are owned in common among all residents. You join the homeowners association (HOA) and pay monthly dues to cover management, hazard insurance, maintenance, garbage collection, landscaping, etc. Maintenance is shared with neighboring condo owners; your property value depends on the condition and desirability of the entire development. Condo owners usually can remodel only within the guidelines provided by covenants, conditions, and restrictions, which may specify everything from how maintenance is handled to what color curtains you can hang. It’s a smart idea to read them before buying a condo.


Planned Unit Development (PUD)

PUD owners individually own the residential structure and a small parcel of land surrounding it. As with condo ownership, PUDs require membership in the HOA, but the land around each unit is maintained by that unit’s owner. If you’re interested in having a bit of a yard, this is the way to go.



This is a housing complex owned by a corporation made up of all the tenants — you become a shareholder in the corporation that owns the property. The number of shares you are issued depends upon the size of the unit you own. Larger units’ owners have more power in deciding how the building is run. You also pay fees to cover your portion of the building’s property taxes, mortgage, and the costs of repairs and improvements for the common areas. Co-op owners depend on each other financially, so expect heavy scrutiny of both your financial history and personal life.  We do not have very many co-ops on Cape Cod.



This is an architectural term commonly used to describe an attached row house and not actually a form of ownership.


Advantages of Common Interest Ownership

Considering all the options, what are the advantages of buying a condo, PUD, or co-op? First, prices are typically much lower than for single family homes, and landscaping and maintenance are minimal or nonexistent. Some people feel safer in a “cluster” environment, while enjoy having a common maintenance service.

The disadvantages? Homeowners’ dues are not tax-deductible. The dues are an ongoing expense which lowers the amount of mortgage you may qualify for. Documents may be long and complex; you may want to hire a real estate attorney to review them for you.