Types of Condominiums: Part 1 - Overview
As the name suggests, this series of posts is about the types of condominiums permitted in Ontario. It is the first of five in the series. Today, we will provide a brief overview of the different types of condominiums permitted by the legislation in Ontario.
Types of Condominiums
First, it is important to note that you cannot tell the type of condominium by looking at the property or based upon the use of the units. For example, you could have a row of townhouses that are part of a standard condominium, one of the other types of condominium, or not a condominium at all! Similarly, a commercial plaza or mall might be a condominium. The easiest way to determine the type of condominium is to review the declaration. If you are unsure if the property is part of a condominium plan, ask your lawyer to complete a title search.
For condominiums created on or after May 5, 2001, the easiest way to determine the type of condominium is to look at the name of the condominium. For example, Waterloo Standard Condominium Corporation No. 1000 would be a standard condominium that is the 1000th condominium registered in Waterloo Region.
For condominiums created before May 5, 2001, the name will not include the type because there were not different types prior to that date. All condominiums were standard condominiums prior to May 5, 2001. For example, Halton Condominium Corporation No. 300 would be a standard condominium despite it missing the word "standard".
Since May 5, 2001, there are now two types of condominiums: freehold and leasehold. A freehold condominium is one where the structure and land are owned by the unit owner whereas with a leasehold condominium the unit owners do not own the land as the land is leased.
There are also four subtypes of freehold condominiums: standard, phased, vacant land, and common elements. In the next four posts we will briefly describe the special features of each type of freehold condominium with focus on the obligations for maintenance, repair, and insurance as these tend to be a key difference between the various types.
We feel compelled to discuss condominiums marketed as “freehold” condominiums before we move on to the next topic. When used by developers or real estate marketing teams this term is typically used to refer to a condominium where the units include the structure and sometimes a portion of the yard around it. When used this way the term is misleading because more than 99% of condominiums in Ontario are freehold condominiums. There are other terms that may be more appropriate to describe these types of condominiums, such as whole lot, lot line, or modified unit boundary condominiums. These terms are not as catchy, but the terms are more accurate.
Leaseholds are exceptionally rare so we will only briefly describe some of the key features in this post.
As described above, the lands are leased instead of owned by the declarant. The owner of the lands leases the lands to the declarant who in turn subleases them to the condominium. The owners end up owning a leasehold interest in their units instead of a freehold interest. The term of the lease on the lands is between 40 and 99 years. Once the lease expires, the owner’s right to occupy their unit is terminated. Here are some of the key differences to look for:
- The declaration for a leasehold condominium cannot be amended without the consent of the owner of the lands.
- Similarly, the condominium cannot be terminated, or a portion of the common elements sold without the consent of the owner.
- The status certificate must include information about the lease, such as whether the lease is in good standing and whether the owner has applied to terminate the lease.
See Part XIII of the Condominium Act, 1998, for more information on leasehold condominiums.