Freeholds vs Condominiums
Tuesday Oct 11th, 2016
Housing ownership can basically be divided into Freeholds, Condominiums and Cooperatives. Let's start with Freeholds. What does this mean?
A freehold property is one where the purchaser owns absolutely everything on the property - the land within the boundaries, and the house that sits on it. The owner is responsible for maintaining everything in and around the property which includes maintaining the lawns and shoveling snow off the driveway and sidewalk within property lines. One is responsible for maintenance of the entire property structure, inside and out, which means a home owner is responsible for maintaining items like the furnace, a/c, roof, windows and everything else. This is a snapshot of a freehold type of ownership. Freeholds can be standalone, detached, houses, semi-detached homes or row/townhouses. A semi-detached home consists of 2 units in one building joined either by a middle wall or at the garage. Row or townhouses are several houses of similar design, joined by common side walls. There could also be detached "link" houses which differ from a standalone detached house by the fact that they are linked either by a common foundation, or at the garage, often with access to the backyard.
Now, what is the second type of housing? The Condominium.
It is a type of ownership, in real property, where all the owners in the building, or complex, share the property, common areas such as elevators, lobby, amenities, and surrounding land, with the exception of the interior of each unit to which they have title. There are different types of condominiums.
- Row or townhouses. As described above, these can be condominium or freehold units.
- Link. As described above, houses, freehold or condominium, joined by garages or carports which provide access between the front and rear yards. Builders sometimes join basement walls so that link houses appear to be single family homes on small lots.
- Highrise, mid or low-rise, condominium
Multi-story residential building containing condominium units. A condominium, again, is not a type of house but a form of ownership.
Now, what is the difference between a condominium and a Cooperative?
In a condominium, each owner pays a monthly maintenance fee for the upkeep of the common elements such as keeping the building clean, cutting the grass or removing snow, maintaining the amenities, parking and security. Part of the fee also goes to a reserve fund for repairs, and maintenance, to the property. Condominiums often have strict policies regarding noise, pets, use of common areas, and even decorations within the owner's unit, specifically those that may be visible from the outside.
Cooperatives (or co-ops) are similar to condominiums, except instead of owning a unit, the owner owns a percentage of shares in the entire building. Like condominiums, Cooperative ownership must pay monthly maintenance and repairs and are subject to the rules and regulations of the co-op board. One downside to living in a cooperative is if you decided to move and sell your shares, the co-op board has the right to decline your prospective buyer.