What is a Site Condominium in Michigan?

Dated: 04/22/2018

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Site Condo

A recent trend in developing subdivisions in Michigan is to establish a Site Condominium for the development.  This can be confusing to buyers.  Who owns the land under the house?  Why does a homeowner have to pay a condo fee for a house they own? Who actually owns the house?

A builder or developer may choose to establish a site condominium to speed up the building and development process or escape some building restrictions and red tape associated with the traditional platting of a new development.  A site condo allows the developer to purchase the land, establish the site condominium plan with the township or city, divide the lots, install the roads, and quickly start building right away.  The homes are usually single-family, detached homes.  

Alternately, the other method of developing a subdivision could take years because a developer would have to submit plans for the subdivision then possibly wait months or years for township review, approval and recording, then wait for the county road commission to install the roads, then wait for the utility companies to install the water, sewer, electric and gas services, etc.  Instead of waiting for the city, township, and county to build the infrastructure, a site condo developer can simply contract these services himself privately so he can get the houses built (and sold) faster. 

In a site condominium plan, the home buyers purchase both the home and the land under it, but all homeowners in the development share ownership in the common areas such as roads, private parks, underground utilities, walkways, playgrounds, pools, clubhouses, etc.  The site condo association typically collects a fee from each homeowner to maintain these common areas through Association or Site Condo dues.  Unlike a typical condo association, the homeowner is still responsible for maintaining the exterior of the property, mowing the lawn, taking care of the landscaping, etc.  However, as a member of the association, the owner is still expected to obey the established rules of the neighborhood association.  

The development is typically governed by a homeowner's association or maintenance company, and buyers can expect to move into a neighborhood with Covenants, Conditions and Restrictions (CC&R's) or Bylaws designed to preserve, protect and enhance the property values of the neighborhood. 

Some people are vehemently opposed to living within the guidelines of a homeowner's association, while some people appreciate the benefits of having their neighborhood maintained in a uniform and orderly manner.  As a home buyer, you should be aware of your obligations as a resident.  It is a good idea for home buyers to request an opportunity to review and approve the neighborhood bylaws prior to finalizing a purchase contract when making an offer on a home within a site condominium.  

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Rhonda Wright

For most people, a home is one of the largest purchases they will ever make. My clients hire me to make the process of buying or selling their home go as smoothly as possible. At the end of the tran....

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