What is a Condo?

A condominium, more commonly known as a condo, is a type of property where individuals can purchase and own a unit within a larger complex or building. Unlike owning a detached house, condo owners purchase their unit which includes the interior space of their unit as well as a share of the common elements.

The common elements are shared assets which all owners in the condo corporation collectively own. This includes things like the building structure, amenities, parking, and shared spaces. The condo corporation is responsible for the management, maintenance and insurance of the common elements through condo fees collected from owners.

Condo ownership provides a more affordable way for individuals to purchase property in urban areas where detached homes are limited and more costly. It offers owners the benefits of home ownership without the added costs and responsibilities of maintaining a detached property. Condos also provide amenities like gyms, pools, and recreation spaces that would not be feasible for a single homeowner.

The condo ownership structure creates a community within the building where owners come together to make decisions through an elected condo board. Owners pay monthly fees that go towards upkeep of the building and shared spaces. While condos provide more affordable housing, owners do give up some freedoms and control that come with a detached home. However, for many urban dwellers, condos offer the perfect mix of home ownership, amenities, and community living.

Types of Condos

There are several types of condominiums, broadly categorized based on their ownership structure and building characteristics:

Freehold vs Leasehold

• Freehold condos The owner has full ownership of the condo unit and a shared interest in the common elements of the building and property. The land the building sits on is owned by the condo corporation, indefinitely.
• Leasehold condos The owner has full ownership of their unit but leases the land the building sits on from a landowner for a set period, usually 99 years. After the lease expires, ownership reverts back to the landowner unless it’s renewed or extended.

Freehold condos are generally seen as more desirable, since leasehold condos come with uncertainty about what happens when the lease expires. However, leaseholds may have lower purchase prices.

New Build vs Resale

• New build condos are those being newly constructed and sold by a developer. Buyers get to be the first occupants and can often customize certain elements. However, completion dates can be pushed back.
• Resale condos are previously owned units being resold on the market. Resale condos often cost less, but may need renovations. Buyers inherit any existing problems or defects in the building.

New builds tend to appeal to investors and those wanting modern amenities, while resale units offer more affordability.

Low-rise vs High-rise

• Low-rise condos are usually 3–4 stories tall and offer a more intimate community feel. They tend to be quieter, have more green space, and be more family-friendly. However, amenities are typically fewer.
• High-rise condos are taller buildings with more units. They maximize views and proximity to urban amenities but can feel more crowded. Noise and privacy issues are more likely in high-rises.

Low-rise condos appeal to those wanting a neighborhood feel, while high-rises suit urban dwellers wanting city access.

Freehold vs Leasehold Condos

When purchasing a condo, buyers have the choice between freehold and leasehold ownership. Understanding the difference is important when deciding what type of condo to buy.

What is a Freehold Condo?

A freehold condo means you own both the individual unit and a share of the land the building is on. Freehold ownership gives you outright ownership of the property indefinitely.

With a freehold condo, you own the physical unit and a portion of the common elements of the building. You are also a shareholder in the condo corporation that covers shared assets like the building exterior, amenities, etc.

The main benefit of freehold is you have full ownership and control over your unit and share of the building’s common elements. There is no time limit on how long you can own the property for.

What is a Leasehold Condo?

With a leasehold condo, you own the individual unit but lease the land it sits on from the landowner. This is usually the condo developer. The lease is generally for 99 years.

You have full rights to your unit during the lease period. But once the lease expires, ownership returns back to the landowner. The landowner can choose to renew the lease or let it expire.

The main downside of a leasehold is you don’t have outright indefinite ownership like with freehold. There is an eventual end date on your ownership rights.

Key Differences

The main differences between freehold and leasehold condos:

• Ownership Freehold provides full ownership, while leasehold grants ownership for a set period.
• Land With freehold you own land rights, with leasehold you lease the land.
• Timeframe Freehold is indefinite, leasehold has an end date (usually 99 years).
• Control Freehold gives more control as you own the land, leasehold limits control.

Pros and Cons

Freehold Pros

• Full ownership and control
• No time limit on ownership
• Land is a tangible asset you own
• More autonomy over unit and building

Freehold Cons

• Typically more expensive to purchase
• Fully responsible for land and shared elements

Leasehold Pros

• Lower purchase price than equivalent freehold
• Don’t have to worry about land ownership responsibilities

Leasehold Cons

• Don’t truly own the land
• Ownership expires after set time period
• Less control over property
• Harder to sell as lease expires

In summary, freehold provides full ownership while leasehold grants limited ownership for a fixed duration. Consider how long you plan to own, along with ownership control and saleability when weighing up the two options.

Owning a Freehold Condo

Owning a freehold condo means you own the physical unit and a share of the common elements of the building and land. With a freehold condo, you own the property indefinitely, just like owning a detached home.

Maintenance Responsibilities

As a freehold condo owner, you are responsible for maintaining and repairing everything inside your unit. This includes flooring, appliances, fixtures, and any upgrades or renovations done by the previous owner.

The condo corporation is responsible for maintaining and repairing all common elements like the building exterior, lobbies, elevators, pools, gyms, etc. As a unit owner, you pay monthly condo fees that go towards these shared expenses.

Pros of Freehold Condominiums

• You have full ownership and control over your unit.
• Freehold units hold their value well and are easier to resell.
• Monthly fees are generally lower than leasehold condos.
• Owners can rent out their unit without restrictions.
• Mortgage financing is easier to obtain.

Cons of Freehold Condominiums

• Individual owners are responsible for in-unit repairs and maintenance costs.
• Monthly condo fees can rise over time as the building ages.
• Disagreements may occur between owners and the condo board.
• Owners are subject to the condo corporation’s Declaration, Bylaws and Rules restrictions.
• Units may be difficult to sell if the building’s is mismanaged, e.g. reserve fund is underfunded.

Owning a Leasehold Condo

A leasehold condo means you own the condo unit itself, but not the land it sits on. The land is leased from the condo corporation or developer for a set period of time, usually between 40–99 years.

With a leasehold condo, you must pay land rent fees to the land owner on top of your regular condo fees. The land owner is responsible for exterior maintenance and major repairs. As the condo unit owner, you are still responsible for interior unit repairs and maintenance.

Pros of Leasehold Condos:

• Lower purchase price than freehold since you don’t own the land
• No Property Taxes
• Land owner handles major exterior repairs and maintenance

Cons of Leasehold Condos:

• Require monthly land rent fees on top of condo fees
• Lease terms eventually expire, limiting potential appreciation
• Major special assessments less likely but still possible
• Condo corporation and its board have less control over land use and redevelopment

Leasehold condos can provide an affordable entry point into ownership, but the split responsibilities and limited time frame introduce additional considerations compared to freehold condos. Make sure to review the lease terms closely.

New Build vs Resale Condos

When buying a condo, one of the key decisions is whether to purchase a new build or resale unit. There are some notable differences between the two that buyers should consider.

New Build Condos

New build condos are those that are newly constructed by a developer. The benefits of buying new include:

• Brand new unit no previous owners or occupants
• Latest designs, finishes, and features
• Ability to customize with upgrades
• Modern and new building amenities
• Developer warranties and Tarion coverage
• Appreciation potential

However, there are some downsides:

• Higher prices than resale
• Waiting period for construction
• Unknown issues until people start living there
• Risk of project delays or cancellations
• Less established neighborhood

Resale Condos

Resale condos are previously owned units being sold on the secondary market. The advantages here include:

• Lower prices than new builds
• Immediate availability no waiting for construction
• Established building and neighborhood
• Able to view actual unit prior to purchase
• Avoid new construction risks

The tradeoffs are:

• Older building designs and finishes
• Potential for higher maintenance fees due to more repairs and Reserve Fund contributions.
• May need renovations or upgrades
• Less customization options
• No developer warranties

Overall, both new and resale condos have their merits. Buyers should weigh the pros and cons based on their budget, lifestyle needs and preferences. Working with a knowledgeable real estate agent can help navigate the differences.

Low-rise vs High-rise Condos

There are two main types of condo buildings based on their height low-rise and high-rise. Here’s an overview of the key differences:

Low or Mid -rise Condos

• Typically defined as buildings up to 4 stories tall.
• More of a neighborhood feel, less crowded, lower density.
• Easier to recognize neighbors, more of a community.
• Often have direct access to outdoors and ground level entrances.
• Limited amenities like pool, gym, etc due to space constraints.
• Perceived as safer in case of fire or elevator breakdown.

High-rise Condos

• Defined as 5+ stories, can be very tall towers.
• Offer spectacular views from upper floors.
• Wider variety of amenities like pool, gym, party rooms.
• Higher density living, more units and residents.
• Rely on elevators for vertical transportation.
• Lower maintenance fees to service building as it spreads to higher number of units.
• Higher purchase prices, especially on upper floors.
• Can feel crowded in common areas.
• Better service for owners due to ability to higher extra staff e.g., front desk or full time manager

The choice between low-rise and high-rise depends on your lifestyle preferences and budget. Low-rise offers a more grounded community feel, while high-rise provides amenities and views. Evaluate the pros and cons of each when choosing a condo.

Condo Fees

Condo fees, also known as maintenance fees, are monthly payments made by each condo owner to cover the shared costs of operating and maintaining the building and property. These fees go towards expenses like:

• Building maintenance and repairs This covers things like lobby and hallway upkeep, elevator servicing, roof repairs, exterior window cleaning, etc. The fees ensure the common elements are kept in good working order.
• Groundskeeping Fees pay for tasks like landscaping, snow removal, parking lot maintenance, cleaning outdoor spaces, etc.
• Utilities Some or all utilities like heat, water, waste disposal may be included in the fees. The costs are divided among owners.
• Building staff Any staff like a concierge, superintendent, security, janitorial services are paid for through the fees.
• Insurance The condo corporation purchases insurance to cover damage to the building and common elements. The fees cover this shared insurance cost.
• Condominium Management Condos have a management company and board that oversees operations, long-term planning, budgeting, etc. Their services are paid for through the fees.
• Reserve fund A portion of the fees goes into a reserve fund for future major repairs and replacements, like a new roof. This avoids special assessments.

On average, condo fees range from aprox $300 to $800 per month but can be higher for buildings with more amenities. Ways to reduce fees include:

• Comparing fees when shopping for a condo. Newer builds tend to have lower fees.
• Voting for a fiscally responsible board to control costs.
• Finding ways to reduce utility usage, like installing low-flow toilets.
• Looking for fewer amenities that lower costs, like a gym or pool.
• Renting out your parking spot, since that portion of fees is fixed.
• Purchase condominiums over 300 units to be economically viable.

With careful budgeting and research, you can find a reasonably priced condo with fees that offer good value.

Condo Amenities

Amenities are one of the key factors that buyers consider when purchasing a condo. Condos typically offer various amenities and facilities for residents to enjoy. Some common amenities found in many condos include:

• Fitness center Having an onsite gym and workout facilities is a major perk for many condo dwellers. It offers convenience and saves on gym membership costs.
• Pool Both indoor and outdoor pools are popular amenities. This provides opportunities for exercise, relaxation and community gathering.
• Party/entertainment rooms Many condos have special rooms that can be booked by residents for hosting parties, events or social gatherings. This provides a great in-building venue.
• Guest suites Some condos provide guest suites that owners can book if they have visitors from out of town staying over. This is a useful amenity for hosting family/friends.
• Concierge service Upscale condos may offer concierge services to assist residents with tasks like receiving deliveries, making reservations, accessing amenities and more.
• Security features Secure access, cameras, onsite security guards and other safety measures offer peace of mind.
• Common lounge areas Community lounges provide comfortable spaces for residents to relax, socialize, work or hold meetings.

When evaluating condos, buyers should consider which amenities they value most. The amenities offered can significantly impact quality of life. They also influence the condo fees residents pay, so it’s ideal to choose a building with amenities you’ll actually use. Amenities help attract buyers and tenants, so they add value for both investors and owner-occupiers. Overall, amenities are a key part of what makes condo living attractive and convenient for many.

Condo Ownership Considerations

Owning a condo comes with unique factors to consider compared to other housing options. Here are some key aspects to weigh as a condo buyer:

Financial Factors

• Condo fees In addition to your mortgage, you must budget for monthly condo fees, which cover building maintenance and amenities. Fees vary greatly based on the building’s size, age, amenities etc.
• Special assessments Occasional one-time costs charged to owners for major repairs or upgrades to the building. These can be unpredictable and expensive.
• Resale value Condos may not appreciate in value as quickly as other housing types. The abundance of condos in many markets can limit demand and price growth.
• Rental restrictions Many condos limit or prohibit rentals, which reduces options if you can’t sell.

Lifestyle Factors

• Noise and neighbors Sharing walls and tight quarters with neighbors can create noise or nuisance issues.
• Amenities Pools, gyms, party rooms provide convenience but also come with fees to maintain. Evaluate if you’ll use them.
• Rules and restrictions Condos involve agreeing to abide by all building rules and bylaws. Make sure you can live with them.
• Security Many see condos as more secure than detached homes. But shared access and less control also has risks.
• Maintenance While you avoid exterior maintenance, repairs inside your unit are your responsibility.
• Commute Condos in urban centers can reduce commute times, but also come with traffic and parking challenges.

Consider both the financial and lifestyle realities to make sure a condo aligns with your needs and preferences as a homeowner.