What is a Condominium?
A condo or condominium is a townhouse, stand alone home or high-rise building that is divided into units that one purchases and they are buying the ownership of the unit and an interest in the common elements of the property. Some examples of common elements are elevators, hallways, grass areas. There are 2 types of condominium corporations: Freehold condominium corporations and Leasehold condominium corporations.
Freehold condominium corporations
There are 3 categories of freehold condo’s they are Standard Condominium corporation, Common Elements and Vacant Land.
A. STANDARD CONDOMINIUM CORPORATIONS
Your money buys you:
- ownership of your unit; and
- an interest in the property’s common elements and assets (such as hallways, elevators, etc.). You cannot separate this interest from ownership of your unit.
Before a builder can transfer title of a unit to a purchaser, the condominium must be registered. If you move into a unit before the condominium is registered, you will likely have to pay “occupancy rent” until the condominium is registered and you get title to your unit.
B. COMMON ELEMENTS CONDOMINIUM CORPORATIONS
This type of condominium corporation has no units and only has common elements such as a road, a golf course, or a ski hill. Owners enjoy the common elements and jointly fund their maintenance and repair through the payment of the common expenses.
The parcel of land that you own:
- Is considered a parcel of tied land (POTL).
- Is permanently attached to your common interest in the common elements condominium corporation.
- Cannot be included in the land described in the common elements condominium corporation’s description.
- Must be situated within the boundaries of the land titles and registry divisions of the land registry office where the developer registered the corporation’s description.
This type of condominium corporation is often used by owners of existing properties who want to establish and share the use of and responsibility for a specific property.
C. VACANT LAND CONDOMINIUM CORPORATIONS
In this type of corporation:
- Buildings do not need to be constructed before the condominium corporation is registered.
- Structures can be built after the declarant registers the condominium.
- Several types of structures can be accommodated in a single development.
It’s important to read the condo’s declaration, which may restrict development size, construction or design standards and maintenance requirements.
Leasehold Condominium Corporations
In a leasehold condominium, the land is not owned by the condominium corporation. Lease purchasers buy a leasehold interest in units and common elements, but do not own the land. Key differences include the following:
- A common expenses fee that includes a portion of the rent payable to the land owner.
- Once the ground lease expires, the owner’s right to occupy the unit is automatically terminated
The cost of the land isn’t included in the price of the condominium, but a portion of the rent payable to the landowner is included in the common expenses fee. The lease term must be between 40 and 99 years, so you will enjoy many of the advantages of owning a freehold condominium. You can sell, transfer, mortgage and take other actions with your unit without asking the landowner for permission. However, the sale price you can ask for your unit may be affected by the time remaining on the land lease. Once the ground lease expires, the owner’s right to occupy the unit is automatically terminated.
For more information on condominiums please visit the Condominium Act.
Sorry we are experiencing system issues. Please try again.