We always get so many questions about condominium vs. freehold so, we thought we’d take the time to clear up this often misunderstood area of real estate. A common misconception about condominiums or “condos” is that they’re only apartments. That’s actually not the case at all, many townhouse and semi detached developments, even fully detached homes, can be condominium or freehold.
The difference between the two really lies in ownership. In purchasing a freehold home you legally retain ownership of of the home itself as well as the land that it sits on. You in turn are free to maintain the property as you wish. In condominium ownership you own the interior of the home with all remaining portions such as the land, exterior and any shared areas which all become common elements owned by the condominium corporation. As an owner you are required to pay a monthly fee (proportionate to your ownership) which most refer to as a condo fee. These fees are determined by the condominium corporation and made payable and managed by a property management company. These fees are put towards maintenance costs, insurance, reserve funds and more depending on the type of condominium.You may have also heard of a freehold townhouse or housing complex with a condominium road or a road maintenance fee. In this case, you retain all the benefits of a freehold ownership while paying a smaller fee for maintenance of common roadways (light standards, snow removal, parking, maintenance, etc.)
What’s the benefit of choosing one over the other? While both have their pro’s and con’s it’s really a matter of what works best for you and your lifestyle. While a condominium can offer lower maintenance, consistency in appearance and appeal to a turn-key lifestyle some feel limited by condominium rules and regulations, fears of mismanagement or simply do not like the idea of added monthly costs. Freehold ownership does offer much more freedom and control for those able to budget for larger household expenses such as a new roof.
More burning questions on this topic? Let us know in the comments!