Is a Freehold Better Than a Condo?

It’s no secret that moving comes with a lot of decisions! If you’re buying a house, one of the conversations will be about freeholds versus condos.

Defined simply, a freehold is where you own both the land and the house.
A condo means you own your particular unit, but shared elements are co-owned by other residents. (A condo is not to be confused with a leasehold, which means you own the house but not the land, as can be the case with a mobile home or a waterfront cottage.)

Freehold and condo ownership can both offer several highly desirable benefits. As with any decision, you’ll also want to consider any drawbacks or hidden costs. Ultimately, your choice comes down to lifestyle and freedom, whatever that might mean to you. Since everyone has different preferences, let’s take a closer look at how living in a freehold compares with condo convenience.

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Freehold: The Name Almost Says It All

The word “freehold” just has a nice ring to it, especially for a homeowner who doesn’t want a long list of limitations or rules. As long as you have the budget and the ability (and all permits as required by your municipality), you can do what you like with your property.

Perhaps the single most popular reason to choose a freehold is the financial benefit: no condo fees and no special assessments. However, just be aware of some of the potential downfalls of being solely responsible for your home:

You are in charge of all maintenance and repairs. When something goes wrong, it’s your job to fix it at 100% your own expense. If you don’t have the skills for the job, you must find a contractor who does. Alternatively, you could put off the repair, but that might be even more expensive later on.

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When a Freehold Is Also a POTL

You may think that your home is a freehold, but it could still be part of a POTL. This stands for Parcel of Tied Land, and it’s becoming more common in new subdivisions and infill units across Ontario.

It happens when you own your house and land, but your property is still tied to a shared piece of infrastructure with the community, such as private parkettes, roads, or storm ponds. This is another reason a thorough title search is so critical.

Finding out that a home is part of a POTL can have implications when buying or selling. It can affect your financing, and you cannot sell later unless you also transfer that common element.

Freedom is not absolute, not even with a freehold property and no POTL. The property could be part of a Homeowner’s Association. If that is the case, additional rules and fees could apply.

The Joys and Realities of Condo Life

Buyers who choose condos are also in search of freedom, just a different version than someone who prefers a freehold. If you want to live in a well-maintained home without lifting a finger on repairs, a condo could be perfect.

Almost everything is taken care of for you, and you can go about your day without worrying about the front lawn. Most condos are also conveniently located in areas with access to the best shops and restaurants in the city. It’s no wonder that many retirees and younger first-time buyers are choosing this route!

The total, absolute carefree lifestyle associated with condos can be a myth, however. It’s important not to get caught off guard.

Condo structures vary; typically, higher fees come with more services, but not always. Check the fine print before going any further.
Low condo fees can also be a red flag. Perhaps the building is not as full service as you initially believed.

Regardless of what you decide, it is critical to read and understand your contract. Your real estate agent can answer your questions so you know what you are buying.

Even as a condo owner, you will be responsible for at least some of the upkeep. Generally speaking, repairs and upgrades to shared spaces are handled by property management. Interior repairs inside your unit are up to you.

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Know the Condo Regulations and By-Laws

Condo living really is a dream for many. A typically lower purchase price combined with a host of perks certainly has appeal. That said, remember that this ownership structure usually has more rules than a freehold.

Any major repair or structural upgrade should be cleared with the condo corporation. Otherwise, you might go to the expense of renovations, only to be ordered to restore your unit to the way it was. That means double the expense with nothing to show for it.

Be Aware of Special Assessments

Condo fees are a fact of life, which most owners accept in exchange for the peace of mind and lifestyle their unit provides. Special assessments represent another level of risk.

Imagine, for a moment, that the roof of the entire building needs major repairs or that all of the elevators need to be replaced. Who pays for all of this?

Ideally, the condo corporation will have sufficient reserve funds to cover it. If not, each owner will receive a special assessment to make up the difference.

The potential for condo fee increases and special assessments can be frightening, but there is no cause for alarm for a well-informed buyer. Your best course of action is to have your real estate lawyer review the status certificate to expose any shortcomings. If the title comes up clear, you can proceed with confidence.

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What Does a Freehold or Condo Look Like?

People often assume that a detached home with a yard and driveway is a freehold, whereas a unit in a high-rise is a condo. In many cases, these generalities are true.

However, both freeholds and condos can take multiple forms and structures. A townhouse can be either. Apartment-style units are almost always condos.

What surprises many people is that a fully detached home on a sprawling lot could actually be part of a condo community. These provide all of the benefits of detached living with the convenience of snow removal, lawn care, and maintenance services. Understandably, this is often the lifestyle choice for affluent, active retirees.

Both condos and freeholds can range from modest, entry-level styles to luxurious residences complete with every creature comfort. In a growing, bustling city like Peterborough, the housing options are abundant, and the lifestyle is beyond compare!

Are you still on the fence about whether a freehold or condo is the right fit for you? Our Peterborough real estate agents are happy to help you clarify your goals. Reach out to team@jeffandkatie.ca or call 705-243-9797 to start the conversation today.