Condo, townhouse, bungalow or life lease: how the options differ

The short comparison

The table gives the general pattern and names the document that settles the details. Where a row says to ask, the answer differs from one property to the next.

Condo apartments

The Condominium Authority of Ontario describes condominiums as property complexes with individual units and shared possession of common elements, with owners paying fees that the corporation uses to insure the building, maintain common elements and fund reserve funds. For a downsizer the draws are usually one-level living and less outdoor work. The trade-off is that you share decisions and costs with other owners.

Our guide to buying a condo in Waterloo Region covers the status certificate, the reserve fund study, special assessments and the rules on pets and rentals.

Condo townhouses and bungalow townhouses

A townhouse can be a condominium. If so, the same corporation structure applies, and there will be a declaration, by-laws, rules, monthly fees and a status certificate. What differs is the list of things people assume are the owner's job. In some corporations the corporation handles exterior work or snow clearing, and in others owners do. The declaration and the fee budget answer that, not the listing photos.

Ask for those documents early, before you spend time on a showing, and ask your lawyer which items are yours to repair and which the corporation covers. Ask too whether there is a shared driveway or private road and who pays for it. If the corporation handles exterior work, ask how the cost is built into the fee, and whether the reserve fund study lists roofs and paving among the items it expects to replace. Those answers tell you more than the monthly figure alone.

Freehold townhouses, semis and bungalows

With freehold ownership you own the home and the lot, and you carry the cost of roof, furnace and driveway yourself. There is no condominium corporation and no status certificate. In many municipalities that also means shovelling the sidewalk. The City of Waterloo, for example, expects owners to clear sidewalks within 24 hours after a snowfall or ice build-up, and it has an assisted snow clearing program for seniors and people with disabilities (see the City of Waterloo page). Kitchener and Cambridge have their own rules, which you can find on the neighbourhood pages and municipal sites.

Some freehold properties share a driveway, a wall or a private road, and some owners pay a fee for shared elements. We have not stated how those arrangements work, because they depend on the registered documents. Ask your lawyer to explain any shared-use agreement on title before you buy.

A bungalow is a style of house, not a legal form. Whether it is freehold, a condo townhouse or something else is what determines your costs and responsibilities.

Life lease

Ontario's life lease guide describes a life lease as a right to occupy a residential unit until you sell the lease or die. You buy an occupancy agreement, not the property. The guide states that there is no legislation in Ontario that specifically regulates life lease housing, so the contract governs, and it says sponsors can typically end occupancy on 30 days' notice if a resident can no longer live independently. It strongly advises independent legal advice and gives the Law Society Referral Service number, 1-855-947-5255.

In practice, ask for the agreement before any deposit and ask:

• What happens to my money when I leave or die, and how is the resale price set?
• What does the monthly fee cover, and who decides increases?
• What are the sponsor's rights to end my occupancy?
• Who sells the unit when I leave, and what do they charge?

Local life lease communities exist in Waterloo and Kitchener. Read about Luther Village on the Park and Trinity Village Terrace, both described by the communities as life lease options. The same operators also run care and rental services on their sites, which are not part of a life lease purchase.

Land lease communities

In a land lease community, as local communities describe it, you own the home and pay a monthly fee that includes the lease on the land. Services in that fee, such as lawn care and snow clearing, differ by community. We have not stated which Ontario statute governs these arrangements, because that is a question for your lawyer, and the community's own lease and fee schedule come first.

Read about Morningside in New Hamburg and Pine Meadows in Belwood, which describe themselves along these lines. Ask in writing how fee increases are set and what happens to the lease when you sell.

Retirement homes

A retirement home is rental housing with services, and it is not a way to own a smaller home. The Retirement Homes Regulatory Authority says homes that meet the definition in the Act must be licensed, and it keeps a public register where you can look up a home's licence status and enforcement history through its retirement home database. If you are weighing a retirement home against a purchase, compare the monthly charge, the services included and the notice terms, and see aging in place versus downsizing.

A note on age wording

Some communities describe themselves as adult lifestyle communities, and some mention an age such as 50 or 55 on their sites. Ontario has no 55+ law. Under the Human Rights Code, age means 18 or more, and section 15 allows preferential treatment where age 65 or over is a requirement. The Ontario Human Rights Commission's housing policy says no defence permits adult lifestyle housing that excludes children or people under a certain age.

We report what each community says about itself and do not say what it may lawfully do. Whatever the type, ask in writing how any age expectation is set out in the declaration, lease or life lease agreement, and have a lawyer review it. See adult lifestyle communities for the local list.

Questions that work for every type

• What exactly do I own, and what do I only have a right to use?
• Which repairs are mine, and which belong to the corporation, operator or community?
• What is in the monthly charge, how has it changed over the past few years and who sets it?
• What happens when I want to sell, move to care or pass the home to my estate?
• Which document answers each of these, and may I have a copy before I make an offer or pay a deposit?

Put the answers in writing where you can, and give the documents to your lawyer. A lawyer reads these agreements for a living, and a review of them is much cheaper before you sign than after.

Choosing among them

The question to start with is how much responsibility you want to carry and how much you want to hand to a corporation or operator, along with the control that goes with it. A freehold bungalow gives the most control and the most work. A condo shifts work to the corporation and adds fees and rules. A life lease or land lease adds a contract that you should read the way you would read a mortgage.

Money matters too. Costs and Taxes explains land transfer tax, which the buyer pays, and the net proceeds calculator shows what your sale could leave for the next purchase. The step-by-step downsizing guide and where to downsize help you place each option on a map, and the resources page lists help for finding a lawyer.

If you would like to talk it through, you can ask to be introduced to an agent on the eXp Realty operating team.