A condominium, or a condo, is a housing or residential complex comprised of separate units owned by an individual.
As a condo owner, you are part of a community, and the condo association is in charge of the upkeep and maintenance of common areas. Condo owners are in cost of maintaining and repairing their units. Aside from that, you must pay regular fees to the condo association. These fees support the shared common areas, building amenities, and the complex’s exterior.
You can choose from two types of condos—freehold and leasehold—. Three subcategories divide the freehold type: vacant land condo, standard condo, and common elements condo.
If you opt for a freehold condo type, you own the property and the land it is built on. On the other hand, a leasehold means that you own the property, not the land on which it’s made.
To help you understand further, we’ve listed some more information about the types of condos below.
Vacant land condos
Vacant land condos are empty lots that are sold and used to build condominiums. Before construction begins, corporations register and sell their land as a condominium. Owners of vacant land condos own not only their home but also the land on which it is built.
Condominiums on vacant land can accommodate a wide range of different types of housing. However, the developer’s declaration may limit future structures’ size, construction, design standards, and maintenance requirements. These pre-construction condos are appealing for a variety of reasons.
Purchasing your new condominium during the pre-construction stage allows you to personalize your new home. Finish selections for pre-construction condominiums begin after construction begins. Buying your new condo during the pre-construction stage will let you consider the finishes of your new home that best reflect you and your lifestyle. Purchasing this type of condo can also result in significant savings.
Another option is to sell the condo after its purchase immediately and before it is constructed. However, selling a pre-construction condo is more complex. You may sell your property through an assignment sale if the developer permits you. They are selling a unit before its completion is considered an assignment. Or, in other words, you are transferring the contract, or the right to take possession of that specific unit at a later date, to another person. Many investors use this strategy successfully to generate substantial returns on their investments.
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The condo corporation in a standard freehold condominium owns the land. They divided the building into condo units, townhomes, or row housing. When a buyer purchases a team in this condominium, the builder transfers ownership to the buyer. They will then have full rights to their unit and an interest in the building’s common elements. The hallways, front entrance, landscaped areas, and on-site amenities are all included.
Common elements condos
It is a condo corporation in which individuals who buy a piece of land also own common interests. As a result, there are no units to own. Instead, you own a parcel of tied land that shares ownership of the common elements with the other owners. An example is a community where you own your property and share standard features with others, such as a street, park, or golf course. Each owner will continue to pay ordinary monthly expenses to cover any costs incurred by the common elements.
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In a leasehold, the condo corporation leases the land from a third-party landowner instead of owning it. It means that you own only the unit or building you occupy. As a result, your fees will contribute to the collective rent paid to the landowner. Under the Condominium Act, you have many rights and obligations as freeholders regarding your dwelling: you can sell or mortgage your unit without seeking permission from the landowner.
Being a condo owner allows you to defray the costs of amenities that would otherwise be very expensive. It also makes it possible for people who want to own real estate in densely populated downtown areas. It can be a wise real estate investment, but first read all the information and decide on the type of condo you want to own before you start any negotiation.