A freehold or a condo townhome, what is the difference?

For many Vancouverites, the three-bedroom house with the white picket fence has become nothing more than a pipe dream. Between the soaring prices the city has experienced over the last several years and the new, tougher federal mortgage rules, many buyers are choosing a more affordable route – townhomes. What these prospective homebuyers might not realize is that townhomes come in two forms – freehold and condominium.

While both types are attached on one or both sides to townhomes that are part of their development (although, in some cases, townhomes can be completely detached), and are often narrower than single-family homes, that’s where the similarities typically end.

“The principal difference between the two forms is a question of ownership,” says Ron Rapp, interim CEO of the Homebuilders Association of Vancouver (HAVAN). “Freehold indicates the amount of freedom and responsibility that you have as a townhome owner, which is just the same as you would if you purchased a conventional home. That means you own the residence, both inside and out. That encompasses any front and backyard space that falls within the property line.”

This form of ownership means you aren’t under the auspices of a strata corporation. So, if you want to paint your front door pink with black polka dots, no one will stop you.However, like a detached home, you will be responsible for covering the costs of any upgrades, repairs and the overall upkeep of your home both inside and outside.

A condo townhome, on the other hand, means that you own the interior, while the exterior of the building and the land that it sits on are collectively owned by you and the other owners of the townhouses in the complex that become part of a condominium corporation. Therefore, costs are shared between the owners through monthly strata fees.

“In a condo townhome scenario, everything beyond a quarter-inch of the drywall is maintained, insured and controlled by the strata,” explains Rapp. “Owners share the costs of snow plowing, road maintenance, walkways – the whole nine yards.”

The collective of condo townhome owners form a council (also called a board), and together with a property management group, work to collect strata fees from owners and then use those fees to maintain the property, conducting general maintenance, inspections, repairs and improvements.

Although the strata fees cover monthly expenses, a portion goes into a contingency fund to cover future expenses such as the maintenance or repair of a roof. The board can also choose to charge owners a special levy in case of emergencies or if there isn’t enough money in the contingency fund.

“Although the strata has the right to set rental restrictions, noise control, or even age restrictions, they still must adhere to the Strata Property Act, which provides the legal rules and bylaws these corporations and owners must abide by in British Columbia,” adds Rapp.

The arguments for freehold and condo properties

“For those who don’t like to take direction from a board, a freehold townhome is the way to go,” says Rapp. “In addition, freehold homes are typically more expensive, but they also tend to appreciate more than a condo townhome.”

Completed last year, South Surrey’s Hycroft 2 is a collection of 30 freehold, four-bedroom townhomes with finished basements and detached garages. This is Streetside Developments second freehold townhome project, with plans in the future for more, if the right location comes up.

However, for those who like the lock-and-go lifestyle, a condo townhome is probably their best bet. The George is a new condo townhome project in Port Moody which will be move-in-ready this fall. The George has two new three- and four-bedroom show homes open for viewing.