Nicki & Karen

What to Understand about a Planned Unit Development Rider

Nicki & Karen » October 26, 2020

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If you’re thinking about purchasing a plot of land to develop on or you’re moving to a new home, one type of real estate property available to you is a Planned Unit Development (PUD). While planned unit developments are similar to single-family homes, the legal structure of a planned unit development is closer to what you would see with a condo. Planned unit developments are entire communities of homes. The most common types of developments to include in a PUD extend to commercial properties, condominiums, and single-family homes.

In most cases, a PUD will mainly include single-family homes. As is the case with condominiums, PUDs are operated by some kind of homeowner’s association, which requires each homeowner to pay quarterly or monthly fees based on how much of the project they own. The HOA fees that you would pay under a planned unit development would be used for the expenses related to property maintenance and community amenities. This article takes a closer look at planned unit development riders and the typical requirements that are needed for them.

Key Takeaways:

  • A planned unit development rider refers to a community home that can look like a singe-family residence but legally is more similar to a condominium.
  • There are numerous amenities included in these types of homes but they do include HOA fees to keep the properties maintained.
  • PUD’s must follow conditional use zones with many procedures that are divided into a three-stage review process that we describe in detail below.

How Do PUD Mortgages Differ from Single-Family Home Mortgages?

While a PUD can consist of many different types of properties, it will typically be comprised of single-family homes. Even though PUDs are similar to single-family homes, it’s important to understand that the legal structure of a PUD more closely matches a condominium, which is why PUDs are typically managed by homeowner’s associations. As touched upon previously, you will make quarterly or monthly payments to the HOA that are used to keep all properties maintained and provide community members with premium amenities.

The amenities that are commonly included within a planned unit development extend to:

  • Tennis courts
  • Basketball courts
  • Hiking trails
  • Street cleaning
  • Landscape services
  • Enhanced security
  • Pools
  • Playgrounds
  • Parks

Only members of the PUD will have access to these amenities, which makes a PUD highly desirable for prospective homeowners. Keep in mind that members of a planned unit development will be tasked with adhering to a set of requirements and guidelines while living in the community. The HOA documents that are provided to you for review when purchasing a home in a PUD will include budget information, bylaws, articles of incorporation, restrictions, and conditions, all of which you should look over before making a purchase.

When you’re trying to determine whether you should move to a planned development unit or purchase a separate single-family home, make sure that you weigh the HOA costs against the benefits derived from being a part of a PUD. For instance, having access to heightened security and ongoing maintenance may be enough to offset the HOA fees that you will owe every month or quarter.

Before you purchase a property within a planned unit development, it’s essential that your mortgage lender is fully aware that the property is situated within a PUD. It’s important that your mortgage lender knows about the PUD because they will need to review HOA documents before approving a loan. These documents will need to be reviewed and approved by the lender in question. The underwriting and approval process for a PUD is just like the process used with a condo.

If you’re unsure if your property is a part of a PUD, you can tell that it is by the presence of HOA fees. These fees aren’t necessary with standard single-family homes. While PUD dues can vary significantly depending on how large your property is and where the property is located, you can expect to pay anywhere from $100-$700 in PUD dues per month. Some PUDs will allow these payments to be made on a quarterly basis, which may be preferable to you.

General Requirements for a PUD

There are some general requirements that must be followed when a PUD is being developed. The development of a PUD is allowed in every type of zone as a kind of conditional use, which means that the development of a PUD must follow the conditional use procedures. In order for a planning commission to approve a PUD, the steps that will need to be taken before development begins include:

  • A performance bond or some type of other security that ensures the PUD is completed in accordance with the plans that were submitted
  • A basic economic impact statement in the event that the PUD is at the right size and fits within the economic requirements
  • A standard environmental impact study in the event that the PUD will have a significant impact on the surrounding environment and land
  • The streets must be officially designed and built in accordance with city standards
  • Areas for playgrounds or parks must be reserved within the PUD space or provided to residents at nearby off-site locations
  • Easements must be made available for the replacement, maintenance, repair, or extension of various public utilities
  • A guarantee will need to be made that recreation areas and open space within the PUD will be permanently maintained

In order for a site area to properly qualify to be a PUD, it will need to be at least two acres in size.


The procedures for a PUD are separated into a three-stage review process, which includes a pre-preliminary conference, a preliminary approval, and a final approval. Before you begin this process, it’s important that you’re aware of the application requirements and fees that are required for these procedures. The application necessary for a PUD involves a standard letter of intent that states you plan to develop a PUD. This letter of intent should be accompanied by an application for a conditional use permit, which will need to be filed directly with the city administrator. You must also provide a small application fee, which will differ depending on the city where the PUD is being developed.

Stage 1: Pre-Preliminary Conference

During the pre-preliminary conference, you will need to meet directly with city staff members at a time that’s best for both parties. While at this conference, you should be able to provide city staff with some basic information about the project, which can include a schematic drawing. This drawing should display all of the private and public uses of the property alongside current physical features of the area.

Written statements must also be provided pertaining to sewage disposal, the water supply source, types of dwellings, non-residential uses, private and public access, the layout of the lot, and various provisions for the maintenance of open spaces, parks, and any landscaped areas. If you’re able to provide all of these documents, the city staff you meet with should give you the standards and regulations that you will need to adhere to during development.

Stage 2: Preliminary Approval

The next and most extensive stage of this process is the preliminary approval. You will be tasked with submitting four separate copies of your preliminary plan map to the planning commission. This map must display such information as:

  • The property lines
  • Any section lines
  • Current buildings, streets, storm sewers, trees, water mains, and underground facilities
  • Location of sewer outlet and water main
  • Title of PUD as well as the developer name
  • Any ownership of nearby parcels of land that are located within 300 feet of the PUD
  • Contours that adhere to the benchmarks put forth by a city engineer
  • Scale, north point, and date
  • Size and location of any building, street, sewer, water main, sidewalk, open space, park, or stormwater facility within the PUD

The plan map should be accompanied by a plan outline or program that includes:

  • Maintenance and ownership information for streets
  • Document drafts for the maintenance of common space
  • A comprehensive list of the buildings you wish to build
  • How much of the land will be used for the construction of buildings
  • Information about any signs within the PUD
  • Landscaping plans
  • Plans for streets, pavement, and sewage disposal facilities
  • Stage development schedule that determines the timeline for each stage of development

The planning commission will then review the documents you provided to them. These documents will need to match city requirements in order for approval to occur. When the planning commission approves the PUD, they may set some conditions that you will need to follow.

Stage 3: Final Approval

The third stage involves the final approval of a PUD application. Within a year following the approval of a plan map and program, you must provide the city with a final map and program that takes the entire development into account. Keep in mind that changes and modifications can be made for the final map and program.

Any major changes will be viewed as a completely new application, which means that you will be required to adhere to the same procedures mentioned previously. For minor changes, city staff could approve these changes without needing a new application. Minor changes can include shifting proposed streets easements, or parks. The city staff will approve both types of changes.

If you’re searching for the right home, a home within a PUD may be ideal if you don’t mind paying HOA fees. By paying these fees, you can gain access to a wide range of amenities that wouldn’t necessarily be available at a standard single-family home. Keep in mind that parks and open areas are required for PUDs, which saves you the hassle of searching for a home that’s within driving or walking distance from parks and recreational areas.

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