What are the different types of homeownership and which one works best for you?
By Alisa Aragon-Lloyd, as seen in "New Home + Condo Guide" magazine, October 29, 2022
There are four major types of homeownership. While there is not a right or wrong choice, before you decide to look for your dream home, it’s a good idea to understand the different types and what each of them entails, so see what best suits your specific situation.
Freehold or fee-simple properties are one of the strongest forms of homeownership in Canada. The owner of a freehold interest property has the full use and control of the land and the buildings on it, subject to the use of the property that originated from the zoning bylaws and permit restrictions set in place by the local city or municipality. A freehold property remains with the title holder unless it is transferred out of their name through a sale or if the owner dies.
Leasehold ownership most commonly occurs on University Endowment Lands, First Nation Lands and other areas where the city owns the land. The leasehold interest in an area of land means that you have the exclusive use of the property occupying that land for a designated period of time. Normally, the original leasehold ownership in B.C. is set for 99 years. It is important to note that this time period is not reset with each new buyer of the property. When buying a leasehold property, it is extremely important to check how much time is remaining on the lease. This is particularly important at the end of the lease, as the owner of the property can choose to resell the leasehold interest, redevelop the land entirely or leave the land vacant.
There has been an increase in the number of condos and townhomes now available to purchase in the Metro Vancouver and strata ownership is quickly becoming one of the most common forms of homeownership. The strata title form of ownership is designed to provide the exclusive use and ownership of a specific unit or lot within a larger building or development. While the owner of that strata title has full ownership of all the interior elements of the unit, they also share ownership of common areas such as halls, grounds, parkades, elevators, and more. This type of ownership is used for duplexes, apartment blocks, townhome complexes, buildings with residential and retail units (mixed-use properties), warehouses and many other types of buildings. There are some single-family properties that are part of a bare-land strata development because the owners share the common space and expenses for maintaining those areas that are shared.
Co-operative ownership is very similar to strata title in which the owner owns a property containing a number of housing units along with its common area of which some or all members can utilize. The major difference between a strata title and a co-operative ownership is that in co-operative ownership, individuals own shares of the entire building and each shareholder is assigned one particular unit in which to reside.