Written by Lisa Sly   |   Posted on   |   455 views

You may have heard some terms floating around when it comes to buying a townhouse or a condominium apartment. What does “Freehold” versus “Condo” mean, and how will it affect what your monthly costs are?

Let’s do a little Real Estate 101 and learn what these different terms mean to you and your home buying experience.

Condominium Ownership

While most people hear the word “condo” and think of an apartment style unit, that’s not always the case. Some townhouses (and even certain detached homes) are considered condos too.

When you buy a condo, you generally own the interior aspects of your unit. Whatever you want to do inside your property is pretty much up to you.

But the exterior of the property—the communal spaces and the land your home is built upon—is managed by a Condominium Corporation. You will be required to pay this Condo Corp a fee every month (i.e. condo fees) to maintain these exterior spaces.

PRO TIP: When considering purchasing a condo, have your lawyer examine the Status Certificate of the Condo Corporation to make sure they are in good standing with fees and allocation of the condo’s funds.

PROS:

  • Because you’re not buying the land condos tend to be priced lower than freehold homes, making them a great option for first-time homebuyers
  • You don’t need to worry about expensive exterior maintenance and repairs like roofing or siding issues
  • Some condo corporations are responsible for things like plumbing and hidden wiring in the walls (double check what’s included in your condo fees)
  • You get access to amenities maintained by the condo corporation (e.g. fitness rooms, pools, playgrounds, common areas)
  • You can bet that the neighbourhood will be nicely maintained and everyone’s exterior will be attractive since it’s being maintained by one entity

CONS:

  • Although buying a condo is generally less expensive up front, you will pay a fee every month for these amenities and services; it may end up being more expensive over the long term
  • You need to pay these condo fees whether you use the amenities or not
  • Some condo corporations have strict rules about the exterior of your home and what you can and can’t do with it
  • You are relying on the condo corporation to effectively manage the funds they collect

Common Elements Fee/Road Fee

While you search for a home, you may occasionally find a freehold townhouse complex that has a small monthly common elements or road fee. Your common elements fee is paid monthly to the neighbourhood complex to look after things like plowing snow, conducting road work or maintaining the complex’s playgrounds etc.

This fee is generally not as expensive as most condo fees are, and you do in fact own the land your home is built upon.  But it’s a small fee that you’ll be required to pay in order to maintain your townhouse complex’s general upkeep.

Your REALTOR® should be able to tell you specifically what is included with your common elements fee should there be one with your purchase.

As always, your real estate agent will keep you in the loop with the type of property they’re showing you. They will give you an idea of what any associated fees may come with it. 

Be Informed!

Consider your options: paying more up-front for a freehold property, or paying less for the condo unit and then paying a regular fee each month. By knowing what your monthly costs will be up-front, you won’t have any surprises later on.

Contact The Kate Broddick Team to start your search for your next condo or freehold home today!

*All information provided by the Brantford Regional Real Estate Association (BRREA) for the highest sales volume and highest number of completed transactions since January 1, 2015. All Brantford MLS® House Listings come from the various systems operated by Real Estate Boards and Associations across Canada. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used underlicense. The trademarks MLS®, Multiple Listing Service®, and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.

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