One thing's for sure when you're buying your first home it's a stressful time! The stress isn't made easier once the professionals kick in with their seemingly endless resources of jargon! Understanding at least some of this can help you to make informed choices when it comes to buying a home – whether that's a luxury family home in New Westminster or a condo in Vancouver. One of the first obstacles you're likely to face is understanding how property is owned; this may seem simple at first until those professionals get to work on you! In this guide we'll take a tour of the most common forms of property ownership in Canada.
Probably the simplest and easiest type of property ownership to understand, freehold simply means that you own the land and house which you buy! If you are planning to build your own home in Vancouver buying freehold land is the most sensible option, as it offers the most freedom in terms of planning, building and designing your home. Where you buy an existing Vancouver home on freehold terms you will also benefit from the same rights to make whatever alterations and additions you choose, although you'll need to comply with zoning, permit requirements and any by-laws in force in the local area. These are normally governed by the local city or municipality. To find the relevant local authority before buying a home in British Columbia check with the Local Government Department of the Government of British Columbia.
Leasehold ownership is the possession of an interest in land for a set period of time. In British Columbia most leasehold properties are located on First Nation Reserve Land or University Lands. The standard period for leasehold tenure is normally 99 years but it's important to understand that the period is reset as each different owner purchases the property. So, for example, if you purchase a leasehold property where 20 years of a 99 year lease have elapsed you will be purchasing the leasehold for the remaining 79 years. If you then choose to sell after 10 years you will be selling only the remaining 69 years on the lease. Although the lease can be renewed after the initial 99 years has expired there is no guarantee (or requirement) that the freehold owner will choose to do so. For this reason, leasehold properties with only a short time left on the lease are considered a significantly risky investment.
As in many countries across the world, increasing urbanization in Vancouver and British Columbia has led to an creasing demand for condos. Condos in Vancouver and other cities in the Greater Vancouver region are extremely popular and with new developments being undertaken on an ongoing basis there are an increasing number of individuals, couples and families who now own property that is owned under the “Strata” model. If you buy a Strata property you become the owner of the interior of the specific unit that you buy and also own a share in the common areas of the building. A Strata Corporation manages the building and this is run by a select group of owners who form the Strata Council. Monthly fees are payable to the corporation which are used for general maintenance and to provide contingency funds for major work, as and when it is required. For more information on rules governing Strata Corporations and properties visit the BC Government website.
This is again usually found in Condos and is very similar to Strata ownership. Monthly payments will be required for the upkeep of the whole building and a Coop-board will manage the property. The main difference between the Strata and Coop models of ownership is that with the Coop each individual owns shares in the building as a whole rather than simply the interior of the part of the property that they live in.