Which term describes a community where owners hold individual lots or units while the association owns the common areas?

• A. Cooperative
• B. Planned Unit Development (PUD)
• C. Planned community
• D. Timeshare

Answer: (C)

In a planned community, owners hold title to their own lots or units, while the homeowners association owns and maintains the shared spaces such as parks, roads, and club facilities. This structure means you own your individual property outright, but you rely on the HOA to manage and pay for the common areas through dues and rules enforced by covenants, conditions, and restrictions. This distinction helps explain how governance and responsibilities are split: individual ownership for dwellings and collective management for common areas.

This differs from a cooperative, where residents don’t own their units outright but own shares in a corporation that owns the building and leases space to residents. A timeshare involves multiple people sharing usage rights of the same property for specific periods rather than owning individual lots or units. A planned unit development is a type of development with common amenities and an HOA, but the description given most directly describes the broader concept of a planned community, where the key idea is fee-simple ownership of private property alongside association-owned common areas.