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Monday, 9 December 2013
What exactly is a condominium?
By Todd Fryer
Century 21 Aberwin Realty Inc.
When you start your house hunt for a condo or townhouse, you’ll likely hear the word ‘freehold ‘ tossed around quite often. It means, quite simply, that you are not required to pay a fee each month (or the fee is quite small) to cover costs pertaining to the common grounds in your townhouse complex i.e. snow removal, lawn maintenance etc. When it comes to purchasing a condominium, you can almost guarantee that you will be on the hook for monthly condo fees. But that’s not always the case.
The word ‘condominium’ is often misused to refer to a type of home. By definition, it’s actually a type of ownership. Whether an apartment, office, or townhouse, a condo version means that you own it but you also have a share in the common grounds of the building/complex or property.
With condominium ownership comes an agreement that all tenants must abide by when they purchase their home. The ‘condo fees’ are collected to pay for the maintenance of the shared property, items such as the roof, parking lot, pool, gardens, elevators and hallways.
So what exactly is a freehold condo? It simply means that the grounds of the complex are maintained by the tenant-controlled board, but there are no rules governing what you can do with your place inside and out. Despite the name, it is not actually ‘free’ to live in the freehold condominium. You will likely pay a small fee each month.
Condos are cheaper to buy than freehold properties but come with that monthly fee that can be anywhere from 20 to 90 cents per square foot. However, it means there’s money in the collective fund to cover regular maintenance and future repairs. You may end up paying more in the long run than you would a freehold property, which doesn’t carry monthly fees, but there’s no guarantee freehold property is as well cared for and up-to-date with repairs.