A refresher on new-home terms

Research and knowledge serve as good companions during any major purchase. And few major purchases are as large or as meaningful and as longlasting as a home purchase.

While general real estate knowledge helps any homebuyer feel more comfortable, some real estate terminology holds new-construction-specific nuances.

Here are some terms to understand. Be sure to ask the builders and lenders about these topics during the new-home seeking, buying and building processes.

Before exploring some California-specific terminology, let’s review some general, but related, terms.

CC&Rs: Often referred to as rules of a homeowners association (HOA), CCRs stand for the covenants, conditions and restrictions that a homeowner agrees to upon purchasing a home in a community managed by a nonprofit association.

CC&Rs might include exterior paint color choices, limitations on parked vehicles and fence height, and are usually imposed to help maintain the shared enjoyment of all residents or to create homogeneity.

Heterogeneity: In contrast to homogeneity is heterogeneity. In homebuilding and community development terms, heterogeneity relates to the uniqueness of one home to another or of one neighborhood within a community to another neighborhood in the same community.

Is variation between architectural styles or community features important to you or would you prefer a more unified look? Ask each builder about the planned homogeneity and/or uniqueness of homes or areas of a new-home community.

SB-9 and ADUs: We’ve discussed accessory dwelling units (ADUs) in this section, but we haven’t outlined the rights that new-home buyers have under the relatively recent legislation of Senate Bill 9 (SB-9).

In 2019, the year after the California Senate ruled that cities and counties must remove restrictions related to homeowners constructing ADUs, the state also required that similar language be removed from HOA documents. And in January of this year, Senate Bill 9 took effect.

The new law now requires that cities, counties and community associations of planned developments allow single-family parcels to be subdivided regardless of an area’s zoning. If adding an ADU to your new construction home may be a priority down the road, ask builders or developers if their communities are “planned developments.” If not, the community may be exempt from the ADU legislation around lot subdivision. ADUs may also be allowed on custom-home property, depending on specific municipal regulations on units per lot.

Options vs. upgrades:

These two terms often appear in similar uses, but they have distinct differences. For starters, options are choices provided to buyers before or during construction. Think of an option as an either-or question.

For example, your builder might offer you the option to have a fourbedroom house in which the fourth bedroom is on the main level and adjacent to a full bathroom. Alternatively, the builder may give the buyer the option, or choice, for that space to be customized into a complete en suite for multigenerational or guest use.

When it comes to upgrades, many builders offer a standard suite of finishes in each of their homes. Within each category, such as flooring, counters, cabinetry and lighting, the builder may provide a base-level suite of choices as well as upgraded levels.

For instance, granite may be standard while quartz might be an upgrade. Ask each builder what would be considered an upgrade. Some offer the highest tier of finishes as standard, meaning no upgrades are necessary.

Easements: As defined by the California Department of Real Estate, an easement is a non-possessory interest and an encumbrance on property that grants the right to use another’s real property for a particular purpose.

In new construction, an easement may be temporary or permanent. A builder or developer may need to use a portion of a homeowner’s property during the construction of an adjacent parcel or common area, for example. Before doing so, they will disclose to the property owner the expected duration, purpose and limitations of the easement.

In other cases, a permanent easement may relate to a convenience or lifestyle benefit of the homeowner. An example may include an underground drainage system along the edge of a property line to control the water level of a lake, canal or river shared by community members.

Riparian rights:

Speaking of water, many new-home communities in Northern California are strategically placed by naturally occurring or man-made waterways that allow for the joys of life on or near the water.

In some cases, a new home with land that touches a natural body of water — such as a river, so long as it’s not man-made — provides ownership rights over the water itself. Go ahead; dive in at your own discretion!