Freehold, leashold and co-ops. These terms conjure up confusion and frustration for the average Vancouver buyer. So let us decipher these three most common types of property ownership one by one and discover where you are most likely to encounter each one in the city.
Firstly let us look at freehold properties. Freehold ownership is the most common in Vancouver. It entitles the homeowner to have their name on title as full owner of the land and the improvements (house) on the land. If it is a condo that is being purchased, a freehold ownership gives you full ownership of your unit and a portion of the land and common areas depending on your unit of entitlement in the building. Basically, the larger the unit, the more land and common area you own.
Next we have leasehold properties. Leaseholds comprise a much smaller percentage of home sales in Vancouver and can be found in strata properties on leasehold land, co-operatives on leasehold lands and even mobile homes on rented pads. For the purposes of this column, a leasehold is a home where the land is being leased usually from the government or as is also common in Vancouver, a native band, for a defined period of time. When purchasing a leasehold, most banks will require at least 30 per cent downpayment. You should always seek legal advice to ensure that you are satisfied with the terms of the lease and understand the procedures to follow when a lease comes due. Lease rates, assignability and terms are things that should be discussed with a lawyer. Most leaseholds in Vancouver can be found around the False Creek area along the water front and on university property.
Co-ops are the third type of ownership one can buy into in metro Vancouver. Co-ops also comprise a small share of the real estate market. Unlike freehold and leasehold properties, with a co-op, you do not own the land or condo outright. Instead you own a share in the land and improvements (the building) and are granted the right to occupy a unit as part owner.
Most banks will require at least 30 per cent down payment on this type of ownership as well. When buying into a co-op you will have to receive approval from a board of directors made up of current owners. Co-ops usually have tough rental and pet restrictions, so be sure to check the building rules prior to purchasing. As with leaseholds, you should consult a lawyer when financing is required as there is no title in a co-op to encumber with a mortgage. Most co-operatives can be found in the west end and for the most part are older buildings.
– Ryan DeLuca is a realtor with Sotheby’s International Realty Canada, and host of The Real Estate Minute on Novus TV; rdeluca@sothebysrealty.ca.
