Housing Types & Terms

  • The information below is not intended to be, and should not be construed as, legal advice. Consult a real estate attorney in the County where the property is located. The information is provided to simply give Sellers and Buyers a comfort level of terms used that are often confusing and overwhelming to people not in the industry.

A Primer About Housing Types & Terms:

Undivided Interest

An example would be when one owner entity or family owns 100% of the dwelling and the lot deeded with the dwelling, without any other owners having an interest in the land or dwelling.

Divided Interest

An example would be when more than one owner or a group of owners have an interest in the same lot and/or building.

Single Family Detached

Implies a single house on an average or larger lot that is deeded to the owner of the house without any divided interest in the deeded lot.

Single Family Attached

Implies a home that is attached to another by a party wall, as in a duplex or tri-plex configuration. The owner of each home generally has an undivided interest in the land beneath the home. Were the land beneath the home owned by an association of owners, the home would be a “condominium” form of ownership.

Patio Homes / Cluster Homes / Zero-Lot-Line

Patio homes
Patio homes

The name designations are used interchangeably, but to a developer and to zoning officials, there may be some subtle differences, depending upon in which area of the US the term is used and depending upon which governing agency has zoning jurisdiction.

Patio/cluster homes occur in planned communities where density of product, open space preservation, amenities and infrastructure are approved by planning and zoning officials in advance of any construction.

The patio/cluster terms imply a single family detached home on a small lot that is deeded to the owner of the home without a divided interest in the lot. The owner typically has a 100% interest in the property. Dwellings typically have design restrictions; sometimes the lots are maintained by the association and sometimes by the individual owners with design and routine maintenance criteria imposed by the association. Typically there are open spaces or greenbelt areas managed by the association or deeded over to the municipality with jurisdiction; sometimes fencing delineations exist; there may or may not be common area recreation facilities. The smaller the neighborhood, the less likely it is to have active recreation buildings & pools due to the cost of maintaining them. Patio/cluster homes are often one-story ranch style, with or without basements, or at least feature a main level master bedroom and main level laundry in the case of two-story dwellings. The floor plans and amenities are generally designed with empty-nesters and no-nesters in mind.

A Zero-Lot-Line neighborhood may differ in that the developer/builder, by getting a master plan approved through the municipality’s planning and zoning department, may place one house closer to the lot line than a patio or cluster home may be permitted by standard planning and building code. Example: If house on lot #1 is placed at the zero point on the right side of its lot and house #2 may be placed at the zero point on the left side of its lot, the space between the two lots would appear more generous or afford more privacy. The same principle applies for utilizing rear lot lines or front lot lines. But the design elements of the home are typically much the same as the patio/cluster home design, except for where on the lot the house is placed. Patio/cluster homes may have side yard requirements that do not vary, such as 6 feet on each side, which would create a total of a 12’ space looking at two homes next to one another. The spacing in between has everything to do with fire department safety regulations and the ability of the fire department to move equipment and personnel between the dwellings. Zero-lot-line product is most often applied to “in-fill” developments, where urban renewal plans to redevelop inner city neighborhoods demand more creative land planning due to space constraints and scarcity of land. Whereas, patio /cluster product is more suited to suburban planning concepts.


This term does not describe a product style but is a form of ownership. A condominium is a fee simple estate created in air space. Each neighborhood or building created with a condominium form of ownership has deed restrictions, undivided as well as divided interests in the property as described in a legal document called The Declaration of Covenants and Restrictions. This document, together with amendments, articles of incorporation and by-laws of the governing association are recorded in the jurisdiction governing the property. The documents describe, for each such neighborhood or building, the portion of the airspace or structure and land an owner is deeded and which portions have a divided interest or common ownership with other owners.

A building consisting of stacked flats or apartment units are typically a condominium form of ownership. Such a building of stacked units, one atop another, could be a “cooperative” form of ownership, uncommon in Colorado but common in New York City. There can be single-family detached or attached homes with a condominium form of ownership; townhomes in Colorado are generally a condominium form of ownership. In many states, townhomes are not necessarily, or even typically, created with a condominium form of ownership, so long as no unit has any portion stacked atop another unit. Nor does a condominium form of ownership imply the product is for residential use. There are many offices and retail properties with a condominium form of ownership. So, the phrase, “I just bought a condo” may be totally inappropriate but we all understand what the person means. Whenever an entity owns space that is constructed above or below another space owned by another, the form of ownership is condominium (cooperative is feasible but not likely).

Townhome/Townhouse & Villas

The term townhouse has become confusing because townhouse and villas concepts vary across the US. Denver Metro and the mountain communities have many transplants and these individuals bring their pre-conceived understanding and/or housing experiences with them.

Town homes/villas
Town homes/villas

In the most authentic context, a townhouse is a minimum of two-stories, plus basement or two-stories on slab. IA townhouse can be more than two-stories, but the entire unit would be owned by the same entity. A villa is always one story, plus basement or on slab; it can be attached or detached. There is an easy visual distinction in a row of all townhouses, but when a one-story end unit ranch completes a row of townhouses, what to call this one-story unit becomes problematic. Perhaps it isn’t problematic for the original developer, builder or owner, but it becomes confusing for every resale. Resales involve a variety of Realtors, each describing the product differently without the benefit of understanding the nomenclature distinctions.

Town Home
Town Home

Typically in Denver Metro, townhouses and attached villas are a condominium form of ownership. But this is not typical in other states.

Planned Unit Developments (PUD’s)

A Planned Unit Development is created and proposed by a developer to the jurisdiction in which the property exists. It is the developer’s responsibility to obtain all the project approvals by planning and zoning officials. The purpose of a PUD is to maximize the land use, density, infrastructure and amenities of a project which may consist of all dwellings units or could combine various land uses, such as a mix of for-sale-dwellings, for-rent-dwellings and commercial and retail establishments. Builders then buy lots upon which they build product that conforms to all the predetermined commitments made by the developer to the planning authorities.

Master Planned Communities

A Master Planned Community is a very large PUD, as described above. But the scope and land area of a master planned community is awesome, some are the size of a new town. And within the master planned community would be a variety of dwelling types, styles and prices. There would also be areas set aside for commercial, retail, schools, health facilities and public emergency safety services. Infrastructure for such a Master Planned Community is costly and extends over a long period of time. Due to the cost of installing the utilities and streets in well in advance of generating revenues, developers usually have to post bonds and partner with the municipalities in which the project is annexed to ensure long term viability. Due to the size of the land area, such project land areas are rural and must be annexed into municipalities to obtain utilities and public services. Generally, the property values of these Master Planned Communities are enhanced and sustained.

About Associations

Master Associations & Sub-Associations

The Developer of a Master Planned Communities sells off neighborhood land areas or lots to builders. The Master Planned Community would typically have a Master Association. In addition, the various neighborhoods would have Sub-Associations, all managed by one or multiple professional property management organizations in conjunction with boards responsible for respective neighborhoods. Property owners in Master Associations typically pay dues on both the Master and the Sub-Association.

HOA’s & POA’s

A Homeowner’s Association, or HOA, is an association of homeowners only, managed by a professional property manager who reports to the Board (of homeowners). Some association Boards have elected to manage themselves.

A Property Owner’s Association, or POA, is an association where property owners may be residential, commercial, office, institutional and retail. When land uses, that are not owner occupied dwellings, occur in an association, the associations are called POA’s.

How to Review Association Documents

Obtain all appropriate documents at contract signing whenever possible. Read the documents thoroughly from front to back, despite their weight and boring nature, before you start spending money on inspectors and appraisers.

The documents that are required to be provided to you are:

Declarations; By-laws; Operating Agreements; Rules & Regulations; Party Wall Agreements; Minutes of most recent Annual Owners’ Meeting; Minutes of any Directors’ or Managers’ Meeting during the 6 month Period preceding the date of the Contract; Most recent Financial Documents consisting of: 1) annual balance sheet, 2) annual income and expense statement, and 3) annual approved budget.

Make sure you also ask for the Reserve account status and approved projected Reserve Budget. Ask for the Certificate of Insurance that covers the association, owners and Board members.

If you see anything that instigates an alarm to you, make your Realtor aware of your concerns immediately, don’t hesitate to ask for explanations and don’t hesitate to ask your real estate attorney for advice.

Signs of a Well Managed or Poorly Managed Association

Condition of the grounds, including routine policing of trash around the property; condition of routine building maintenance; attitude and comments of homeowners whom you encounter; the financial condition, particularly the reserve account; when was the last financial audit and what was the outcome; pending lawsuits against the association; dues delinquency and collection reports. Check out the association website and determine if the management company is well organized and communicative; confirm the property management company is well insured and that employees handling funds are bonded. A Certificate of Insurance, naming the association, should be provided to the association by the property management company.

Exterior Modifications

Don’t assume you can do what seems reasonable to you. Make your contract subject to having approvals in place from the association before you lift contingencies, and most certainly before you close on the property. Whether the situation is radon mitigation, replacing a dead shrub, trimming an invasive tree that could damage the roof, make building repairs, change the front door or repaint the front door, remove old indoor-outdoor carpeting from the patio or deck…

Get a definitive answer, in writing, from the HOA if you cannot find the answer in the documents you were provided.

If you are the Seller of property in an association

Make sure you have all documents in your possession prior to listing your home. Make sure that your documents are updated in accordance with what you must, by law, provide to prospective Buyers. It is local practice for many Realtors to simply ask your Title agency to obtain these documents, but there is a charge and a time factor involved. If you have the ability to download the documents from the association’s website, do so before you ever get a contract. Be prepared. And why pay $1.50 to $1,000 to the HOA to obtain what you may have, should have, or could have at no charge? The time factor is also an issue that can be controlled. Why postpone having your Buyers lift approval contingencies when you can establish deadlines at the time of contract writing because you have what you need. Never give your complete copy of HOA docs to your Realtor or to any prospect. Make a copy and keep a copy, always.

…If you are a Buyer of property in an association
Make sure you read the aforementioned paragraphs so you know what to expect and are well prepared. It’s better to start off being a happy property owner with realistic expectations than to jump in blind and have regrets later.