Are you thinking of purchasing a condo? When you start your condo hunt, you’ll probably hear the word ‘freehold’ tossed around quite often. It simply means that you are not required to pay a fee each month (or the fee is quite small). This fee normally covers the costs to maintain the common grounds such as snow removal, lawn maintenance, etc.
You may have thought that when it comes to purchasing a condominium, you will be on the hook for monthly condo fees. But that’s not always the case.
The word ‘condominium’ is often misused to refer to a type of home. But actually, by definition, it’s a type of ownership. Whether an apartment, office, or townhouse, a condo version means that you own it but you also have a share in the common grounds of the building/complex or property.
With condominium ownership comes an agreement that all tenants must abide by when they purchase their home. The ‘condo fees’ are collected to pay for the maintenance of the shared property – items such as the roof, parking lot, pool, gardens, elevators and hallways.
So what exactly is a freehold condo? It means that the grounds of the complex are maintained by the tenant-controlled board, but there are no rules governing what you can do with your place inside and out. You may be surprised to know that despite the name, it is not actually ‘free’ to live in the freehold condominium – you will pay a small amount each month.
You may be wondering about cost differences between the two. Condos are cheaper to buy than freehold properties but come with that monthly fee that can be anywhere from 20 to 90 cents per square foot. However, it means there’s money in the collective fund to cover regular maintenance and future repairs. You may end up paying more in the long run than you would with a freehold property, which doesn’t carry monthly fees, but there’s no guarantee freehold property is as well cared for and up-to-date with repairs.
When in doubt, it’s a great idea to ask and that’s what I’m here for. Please contact me should you have any questions or concerns.