You might be wondering, what constitutes a condominium. It’s easy to spot the apartment-style or high-rise residences that are the major type of condominiums, we see them all across major cities such as Toronto, Vancouver and Mississauga. However, the term condominium actually covers many other types of formats.
Since the Condominium Act of 1998 was passed in Ontario, condominium developers and municipalities have had an expansion in options. Although there are different types, a condo is typically composed of common elements that are owned by a condominium corporation. These common elements are commonly seen as hallways, units, stairways, etc.
By purchasing a unit, you become a member of this corporation and are likely responsible to pay a monthly association fee. In this article, we will discuss the different types of condominiums.
Leasehold Condominium Corporations and Freehold Condominiums Corporations
To begin, condominiums can be divided between two major categories – freehold condominium corporations and standard leasehold condominium corporations.
Leasehold condominiums allow units to be subject to leasehold interests. This means that owners of a unit can only occupy this unit under a lease. Simply meaning, they do not own it. This type of condominium is uncommon and cannot have the Residential Tenancies Act applied between unit owner and landowner.
Although as a leaseholder you have the advantages of selling or mortgaging your unit, once the lease expires you may be terminated unless arranged otherwise.
Freehold condominiums are everything outside of leasehold condominiums. The majority of condominiums are freehold. These are condominiums in which the owner of the land is also entitled to any structure built on top of this land. Freehold condominiums can be divided into four main formats which will be discussed next.
Standard Condominium Corporations
As the name suggests, the standard condominium is the most common form of condominiums. A standard condominium can come as a high-rise, low-rise, townhouse, or single-detached. When purchasing one of these condos, you become the owner of the unit and agree to share the common elements of the condominium corporation.
Standard condominiums can be residential, industrial, commercial, or mixed-use. As part of the corporation, you are required to partake in this collective by contributing costs for maintenance and repairs. Although you are the owner of the unit, you are not the sole owner of the land.
What are the differences between some standard condominium corporations?
A high-rise condominium has four levels or more. This type of condominium tends to be newer and in more popular locations. Units are often pricier on higher levels. Commonly, a high-rise condominium is located in main cities or large commercial areas. Unlike a low-rise condominium, a high-rise will typically have greater amenities such as rooftops, pools, gyms, etc.
Low-rise condominiums have three stories or less. That being said, they are limited in number of units and can often come with a premium price as well. Often, these condominiums are older than high-rise and have greater space per unit.
Townhouses are multi-level homes that share walls with neighbouring properties but have their own entrances. Typically, you see townhouses in unison with others and will often form a small community.
Phased Condominium Corporations
Phased condominium corporations have additional units/common elements that may be added to the corporation after it has already been declared. Under the current Condominium Act 1998, only standard condominium corporations can become phased condominium corporations.
This type of condominium is advantageous for a developer when there is uncertainty as to whether or not units will be sold. However, it is to be noted that additions can only be made within a ten-year time period once the standard condominium corporation is declared.
Vacant Land Condominium Corporations
Vacant land condominiums are also what they sound like – this format of condominium allows you to purchase the land/lot/unit prior to building any structure on it. The structure chosen can be any type of condominium such as the ones discussed before (ex. high-rise). However, this could also be subjected to restrictions depending on the declaration. Details on the material, structure size, location will normally be outlined in the declaration to ensure unity in the condominium.
The advantage to vacant land condominiums is the condominium can be created and units may be sold before it is constructed. This helps mitigate cash flow constraints and assure some more certainty in supply and demand. By selling the units prior, it also may allow purchasers to have a bit of negotiating power and customization preferences.
Common Elements Condominium Corporations
Common elements condominiums are a bit unique compared to the previously discussed as they do not contain units. In this nature, you do own your own property including the land. That being said, there are a lot of modifications or voids when applying the act to common elements condominiums. For example, since there is no unit, it is not on the corporation to ensure the unit is up to standard unit conditions.
The “common elements” in this scenario are typically elements such as streets, walkways, etc. These elements are external and not a part of the land you occupy, rather they are owned collectively.
Start your condominium journey with someone you can trust!
Although the new Act diversifies the types of condominiums available to be built, this flexibility can also come with confusion. It is important to know the differences between each type to identify which one will suit your needs.
At Keller Jansen, we offer Condo Performance Auditing, Condo Reserve Fund Studies, BB19R, and other quality services to help you. Call us at 1-88-940-0571 to learn more about our condominium engineering services.