There are many different types of condominiums available. It is important to understand the differences between types so that you select the one that best suits your needs, lifestyle, and budget.
When you buy a condo, you get full ownership of your specific unit and shared ownership of the common property. As a property owner, you are responsible for maintaining, repairing, and making improvements to your own unit, while the condominium corporation is responsible for the common areas.
Understanding the difference between condominium types is important because it will impact what you have complete ownership and control over.
Types of Condominium Unit Ownership: Conventional vs. Bare Land
There are two types of condominium unit ownership: conventional and bare land. These refer to the boundaries of the condominium unit.
A conventional condominium is the most common form of condominium. It typically refers to a condominium unit that is located within a building. Conventional boundaries are identified by referring to floors, walls, and ceilings, as opposed to markings on a plot of land.
Owners of conventional condominiums have full (freehold) ownership of everything inside the unit based on the boundaries set out in the condominium plan. In some cases, a unit’s exterior windows and doors are part of the unit, and in some cases they are considered common property. Check the condominium plan and bylaws to determine what is part of the unit and what is common property.
Common property in conventional condominiums may include air conditioning, plumbing, sprinkler systems, elevators, fitness centres, pools, hallways, lobbies, and exterior spaces like gardens.
Bare Land Condominiums
A bare land condominium unit is an actual plot of land that may or may not already be developed.
Owners of bare land condominiums have full (freehold) ownership of everything inside the unit’s land boundaries, which may include a house, garage, trees, and shrubs. If the unit has been developed, a Real Property Report will show the unit’s boundaries and the location of all structures within the boundaries.
Owners are responsible for maintaining everything inside the boundaries of their unit, which makes bare land condo ownership more like traditional home ownership. Owners are responsible for shoveling snow, landscaping, and making exterior repairs (i.e. replacing the roof and siding). However, in some cases, these responsibilities may be transferred to the condominium corporation. Where the corporation is responsible, the exterior property becomes managed property. This is not the same as common property since the owner continues to keep his or her freehold ownership of the managed property.
Common property in bare land condominiums will vary depending on the type of development. It may include sidewalks, roads, parks, and/or recreational facilities like pools or golf courses.
Buying New: Pros & Cons
Pros of buying a new condo
- Developers are required to provide you with certain documents before you buy
- Once completed, it is move-in ready
- You may be able to customize your unit by picking out finishes, flooring, and appliances
- Reduced risk of having to undergo costly, noisy and intrusive repairs and renovations
- Modern building amenities
- New home warranty coverage
Cons of buying a new condo
- If construction isn’t complete, you are reliant on drawings, floor plans, and sample materials to determine what the condo and common property will look like
- You may have to wait months for construction to be competed. Your initial deposit will be tied up until construction is substantially completed.
- Your move-in date could be delayed if construction is behind schedule
- You may have to pay occupancy fees (condo rent) if you move in before you receive the certificate of title from the developer
- The condominium’s estimated budget could change drastically once the condominium is completed, which could result in increased condo contributions (fees).
Check out the Canada Mortgage & Housing Corporation’s Tips for Buying a New Condo (keep in mind this information is not Alberta-specific)
Buying New: Multi-Stage Developments
New condominium developments are sometimes built in multiple stages. A developer may complete one building, sell it, and then proceed to develop the next building. If you’re thinking of buying a new condominium, inquire as to whether it is a multi-stage project and consider whether subsequent parts of the development will benefit you or cause potential problems.
Multi-stage developments can benefit owners by adding new services and facilities, but they can also lead to obstructed views, changes in parking, and an increased number of residents accessing the common property. Potential buyers also need to consider that as additional buildings are completed, the number of owners will increase and therefore the condominium corporation will grow in size, which could impact the operating budget and reserve fund, which could in turn lead to higher condo contributions (fees) for owners. Developers may also change or cancel plans for future stages.
Types of Multi-Stage Developments
In Alberta, developers can create multi-stage condominium developments in two ways: phased development or barely blended development.
Phased Development Model
Developers using a phased development model must follow rules outlined in the Condominium Property Act and Condominium Property Act Regulation. These rules require developers to file a phased development disclosure statement with the initial condominium plan. This statement includes information about how many buildings are planned, the number of units planned for each phase, and what common property elements will be included in the development (for example, parking, recreation facilities, etc.).
Barely Blended Model
Developers using a barely blended development model do not have to follow any special rules. With a barely blended model, a developer divides a large parcel of land into multiple bare land units. These units are then developed in stages. As each bare land unit is ready for development, it is redivided and developed into a conventional condo building or smaller bare land condo units.
Buying New: Conversion Condominiums
Conversion condominium buildings were once used for non-condominium purposes. They may have been warehouses, breweries, rental properties, or commercial properties. Loft-style developments are a common example of a conversion condominium. Conversion properties are generally conventional condominiums and will vary greatly in style and size.
Interested buyers should always consult with a lawyer and real estate agent before purchasing to ensure all important documents are collected and reviewed.
Buying Resale: Pros & Cons
Pros of buying a resale condo
- The possession date is usually much sooner than a new development.
- You can see what the unit and complex looks like rather than relying on drawings and floor plans.
- The condominium corporation will have an established budget and reserve fund. You can review the corporation’s financial statements with your lawyer and document reviewer to see if there are any problems on the horizon.
- You can talk with other owners, members of the condominium board, and the property manager about the complex.
Cons of buying a resale condo
- The unit may not be move-in ready and/or could need renovations.
- The amenities may be older or limited.
- The common property may require significant, costly repairs in the future.
- The seller is not obligated to provide any documentation. The onus is on the buyer to request important documents.
- Ask Maria: Drippy Dilemma – how to protect yourself against leaky condos
- Canada Mortgage & Housing Corporation: Tips for Buying a Resale Condo (note: information is not Alberta-specific)
Condominiums come in all shapes and sizes. Apartment-style units located in high or low rise buildings are generally conventional, while townhouses or detached dwellings are often bare land units.
Most commonly associated with the term condominium, high-rise buildings offer new or resale conventional condominium units with a variety of amenities. Some high-rise buildings may be conversion properties and some may be mixed-use developments with retail or commercial condo units on the lower levels.
Sometimes a more affordable option to high-rise condos, low-rise condominium buildings also offer new or resale conventional condominium units. In Alberta, many low-rise condominium buildings are converted rental properties.
Loft-style condominiums are often converted warehouse, commercial, or industrial buildings. They are available as new or resale conventional condominium units, and the amenities available will vary significantly depending on the property.
Townhouses or Rowhouses
Townhouses or rowhouses are a great option for families or individuals looking for outdoor space. They are available as conventional or bare land condominiums.
With conventional townhouses or rowhouses, the exterior is common property that is usually maintained by the condominium corporation (though potential buyers should always check the bylaws to confirm).
If the townhouse or rowhouse is a bare land condominium, the owner has complete ownership and control over the land up to the property’s boundaries. This means the owner is responsible for landscaping and maintaining any outdoor structures like a patio or deck. In some instances, the responsibility for maintenance tasks may be transferred to the condominium corporation.
Buyers should always confirm what type of condominium they are purchasing.
Occasionally, detached homes are part of a condominium complex. A gated community may be an example of a condominium complex that includes detached homes. Common property would include the roadways, sidewalks, and any recreational facilities. Luxury developments may include golf courses or tennis courts as common property amenities.