Freehold condominium. It may seem an oxymoron in one’s general understanding of the real estate market but it’s not.
Often the word ‘condominium’ is referred to as a type of home. But it’s not. 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.
Freehold is another type of ownership, in which the buyer is the proprietor of the house and the grounds.
So putting the two together would seem wrong. But it’s not.
Oh sure, where one demands uniformity among tenants the other allows independence.
And with condominium ownership comes a set of rules all tenants must abide by when they sign the deed. And monthly fees are collected to pay for the upkeep of the shared property, such as the roof, parking lot, pool, gardens, elevators and hallways — that is, so long as the condo board manages the group’s money well ensuring the reserve fund is healthy.
Freehold owners don’t have to sock away cash each month for that rainy day fund but they’d be smart to put some aside so that they don’t get caught short of cash for the day a major repair is needed, like the furnace breaking down in the dead of winter.
So what’s a freehold condo? It means 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.
Fees in a freehold condo setup are relatively lower because they don’t cover much. However, some freehold condo boards impose a set of rules and regulations on homeowners, as well. But they only go so far and there’s no money in the kitty for your neighbour to repair his/her aging roof or dilapidated fence, which could, in turn, lower the value of your property.
Many 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 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.