By: Jayson Schwarz LLM
These days buying a cottage property is not as simple as it used to be. Apart from all of the different considerations that you would ordinarily have to face there are now a variety of ownership options. What does this mean?
Condominium Ownership: We all think of condominiums as high rise apartments. This is no longer true. Condominiums can include townhouses, of all shapes, sizes and heights, semi-detached or detached units. Condominiums can also take the form of common element condominiums ( i.e. A number of homeowners sharing a swimming pool, a common road or park), phased condominium corporations, vacant land condominiums or leasehold condominiums. Condominiums are created under the Condominium Act of Ontario, as, among other things a means of consumer protection by the imposition of certain time, disclosure requirements on the purchase and sale of new condominiums and as a means of sharing common costs.
In a condominium you will pay a monthly fee that includes everything from contributions to a reserve fund, taxes, insurance, heat, hydro, television and maintenance. In a common elements condominium it might only be the cost of road maintenance.This amount can vary from year to year as the cost of running the building increases or decreases. The operation of your condominium is carried out by an elected board of directors who operate the condominium corporation and these people decide on how things will run. As an example there may be bylaws or rules setting out the fact that there can be no pets in the units. In a condominium, you individually own your unit by deed and jointly through your proportionate share, the common elements (pools, tennis courts, hallways, elevators, etc.).
Co-operative Ownership: Another form of ownership available is buying into a “Co-op”. Co-ops cannot be looked at in the same way, as condominium as there is no real direct real estate ownership. In this circumstance a corporation or trustee owns the property and you buy a share. You live in your unit, in effect as a tenant, generally with a lease or license for exclusive possession. It runs similarly to a condominium in the sense that a board of directors elected by the co-operative members decide on how the facility will operate. The monthly fees however may include the cost of the underlying blanket mortgage and other costs. (a blanket mortgage is the mortgage covering or blanketing the entire property usually used to originally build the buildings)
Freehold Ownership: This is the way that generally our parents and grandparents purchased their cottage. This is the old fashioned “my cottage is my castle” concept. You are the King or Queen of your domain and what you do with your property is your choice. Insurance, heat, hydro, property tax, maintenance, etc. are your personal responsibility and you deal with them, as you deem necessary. This is called ownership in fee simple and the land and structure are yours and everything related thereto, your responsibility. In other words you cut your own grass and take your own garbage to the dump.
So there you go. Look at that beautiful lot and buy it knowing how that common elements condominium works. I hope this helps and happy cottage hunting!!!!