Freehold, condominium or cooperative housing? Here's a quick guide to help you determine the type of property you are interested in buying.
As you begin your quest for buying your property and you carefully review the study of the property listings, you'll soon be confronted with a new vocabulary which may seem strange. You will come across terms and acronyms such as property, estoppel and MLS
This is not a foreign language, and this is not the fault of a property agent who's keyboard is malfunctioning. It is the language of property agents. If it sees confusing, do not worry: your translator will help you!
In the property sector, there are three major categories of properties. The terms "freehold", "cooperative housing corporation" and "condominium" are expressions used to define the rights and responsibilities attached to the owner's home.
These types provide the owner with a variable degree of freedom in decorating and renovating the property, and impose regulations that restrict certain behaviors. They can also define the responsibilities for various tasks to maintain the site.
Here are the basics you should know about the different types of properties:
- The owner owns the house and grounds.
- The freehold better preserves the privacy of the owner and provides him greater freedom of choice than any other type of home. The homeowners can decorate and renovate as they please.
- The owners are also responsible for all maintenance, both inside and outside of the house.
- The freehold ownership types are the most common.
- The owner owns his property and shares ownership of common areas. The condominiums are usually located in residential buildings, but they can also be found in lots of townhouses and lots of separate buildings on private roads.
- The owner is responsible for the interior of her home (all that is within the coating on the walls). The condominium association is responsible for maintaining the building exterior, common elements within (halls, elevators and garages, for example) and the ground.
- All owners pay a monthly fee to the condominium association to cover maintenance and utility costs and shared taxes.
- The condominiums are subject to strict rules concerning noise, use of common areas and renovation of units. This formula preserves less privacy than owners of individual homes.
- The condos are generally less expensive than freehold houses.
- Formula of the cooperative, or "op", is similar to that of the condominium except that instead of owning your unit, you have an interest in the entire building or complex.
- Repairs and maintenance are funded through a monthly amount paid by residents, which are subject to regulations established by the board of the cooperative.
- If you decide to sell your participation and to move, the board of directors of the co-op has the right to reject your prospective buyer