When you are looking for a condominium, you may find different options on the market. It's best to familiarize yourself with the types of condos available in Ontario.
There are two main types of condominiums: freehold and leasehold.
Freehold condominiums fall into one of three categories:
When you buy a condominium, you are likely buying a unit in a standard condominium corporation. This could be a building that is divided into condo units, row-townhouses or stand-alone townhouses.
Your money buys you:
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.
This type of corporation has no units, but has common elements like roads, a golf course, or a ski hill. Owners enjoy the common elements and jointly fund their maintenance and repair.
For instance, if you buy property in a community that includes a common elements condominium corporation:
Your part-interest in the corporation is attached to the parcel of land you own, not your house. The parcel of land on which your house sits is:
Unlike in standard condominium corporations, as there are no units, developers do not need to divide the land into units before they register a common elements condominium corporation.
In this type of corporation:
It's important to read the condo's declaration, which may restrict development size, construction or design standards and maintenance requirements.
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. The Condominium Act treats leasehold condominiums much like freehold condominiums. Key differences include the following:
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.