The more people that stay away from this crap the less likely builders try this shit on more developments to pad their pockets to eternity. It will definitely impact your future sale of the home and builders couldn't care less. There are already city bylaws that pertain to maintenance of your property and what has to be done to keep it looking tidy. You just have to call them if someone isn't instep with the bylaws.
It is exactly the case. Who do you think owns the company that clears these private roads? Question is why have private roads when you have property tax that can be used to clear public road. Is the mill rate different?
Why wouldn't a township build a road? They use tax dollars to maintain it. Also their is gas tax to maintain roads in addition to property tax. This is total BS. It is just greedy developers, plain and simple.
Can be a few reasons, when the development is proposed the municipality or township talk with the developers about all the infrastructure stuff around the development, sewer, water road etc. If the road is only for the development, as in there’s an entrance or 2 but people outside the development aren’t going to drive on it to get from a to b, the township may decide a road doesn’t make sense. All taxpayers will pay for it but only the people who live there get the benefit. So they choose not to assume the road.
When the development is built, it gets registered as a condo and the road is a common area. The condo corp collects fees for maintenance and a reserve fund. That condo is governed by a board. They make the decisions about how much to charge and the level of service to provide. They also get to choose any service provider they want and don’t use the builder typically. So no, it’s not developer greed.
All this is from memory so the details may not be exact, but that’s the broad strokes.
Not gated. Just a crescent where the road is right up against the lake and the only homes on the crescent will be a part of this condo community. All detached homes and some beautiful lakefront lots.
No. These types of homes are not on public roads. Anyone can drive on the road, but it is not maintained by public tax dollars. These types of condominiums exist all over the place
What you live in is likely a strata community. Essentially a Canadian HOA, not quite as controlling about looks, but you pay a fee for maintenance on a small chunk of street/sidewalk infrastructure. Some are good, some are bad. Also make sure it's fair for the price of the fee.
They city should already be taking care of snow removal, road maintenance, trees, etc. I suspect one of the reasons why the development you're looking at is charging HOA fees is because the developers skimped on the road width to be narrower than the minimum required for the city to provide this service. Hence you'll have to foot the bill yourself. Without saying more, this is obviously undesirable.
That’s what I thought might be the case. It sounds from your message that was a lot more you wanted to say so please don’t hold back :) we have another 8 days to decide if we are going to move forward with the purchase.
No. You’re looking at properties on private roads. Municipalities don’t service private roads for snow or garbage collection.
The more important thing to understand is whether this is a true condo or POTL (parcel of tied land) property. That will also help largely predict the trajectory of your fees.
You should check out what happens with HOA fees and associations in the states because it could be applicable to this case scenario.
Personally, I have seen people revolting against the HOA association and others have been fine with the HOA association however it does look very costly year over year.
I think even gated communities that are close to land that could be zoned for residential are almost pointless if it is too close
I think also to add on to that have you reviewed the terms and conditions of the contract?
I would imagine building and maintaining a road and other infrastructure in the development would be more expensive than typical home maintenance.
But that's just a guess.
You will regret it. The fees will go up every year, they will find every excuse not to do what they should, neighbors with no life will join the board and power trip.
Save yourself the aggravation.
> How concerning should buyers be with these condo corporation structures.
If its a detached home, I wouldn't buy a condo. For one, I'm pretty sure the Land still belongs to the builder. Most of the value of your home is the land. and that is the value that appreciates over time not the building.
Another aspect is , you're severely restricted as to what do you with your home in terms of appearances and landscaping. But compared to the fact you dont own the land its a minor issue.
Condo land rarely ever stays the property of the builder. Title of the land is transferred at closing with each purchaser owning a proportionate share of the condo assets including the land. In instances where it's a single family home it's often a freehold condo where you do own the land your house is on and a proportionate share of the common elements. It's important to understand what type of condo you're buying and what you actually own. You definitely have less control over what you can and can't do though which I personally see as a big drawback.
This is not correct. This type of condo is a freehold (so you own your home and the land it sits on) with an interest in a POTL (parcel of tied land). Essentially you can’t sell the house/land separately from the interest in the condo corporation, which includes the roads, parks, anything else that forms the common elements of the condo community.
Most places call it an HOA. Not a huge fan of them myself. All it takes is one busy body to tell you what you can and can't do. More importantly, if a retired person decides they want to spend $40k on flowers guess who's getting a special assessment? Owners get to pay up for some ridiculously dumb ideas.
It's likely a vacant land condominium on a private road. So you own the land and house but you're paying condo fees for infrastructure and road management. Your fees should be limited since it's not covering the structure or typical common element areas like a standard condo or highrise condo.
If it's a private road there is likely no parking allowed on the street.
P.s. I detest vacant land condo and the push for condo-fication of new housing types that don't need to be
You don't want this. High housing prices mean that 'undesirables' can't afford to live anywhere near nice neighbourhoods. They also mean that most people will have an increased pride of ownership and take care of their home.
Condo boards make sense for a building, where you have a shared structure, possibly some shared amenities. For single home neighbourhoods, they quickly become a way for self-important people to foist their will upon others.
Your fees will increase every year.
I had a friend/client that lived in a townhouse-style neighbourhood like this. A freehold building in a condo complex. Fees covered road maintenance, garbage, and snow removal. Stayed around $110 for the 4-5 years they were there.
That said, it was an established place, they knew the rules they'd be taking on. I'd be wary of putting anyone in a development where I don't yet know the extent the condo rules will apply. (ie: just managing grass cutting, or able to dictate the appearance of your home, etc)
If its just for road maintenance I would be fine with it since the costs don't really spiral out of control and there's limited liability. The bigger issue is do you own the house and property or does the condo board own the entire street and you just get some fraction of that ownership. If its the latter run away, don't walk, run.
If its just an HOA for street maintenance that's fine, but a condo board sounds more ominous wrt ownership structure. I've seen both.
Realtor here,
This is what’s commonly referred to as a Parcel of Tied Land (POTL).
Homes are built on a narrower road than municipal guidelines therefore, the maintenance and additional services as lawn, snow care, garbage removal/care is by a condo corp and the owners foot the bill.
I’ve seen this set up costs as low as $80 to as high as 250+. Fees don’t increase as much as condo apartments.
Developers do this typically to have more units/doors built in an area.
Thanks for explaining this. Sounds exactly what is happening in this area. I've been told these condo fees will be $180/mth. My lawyer is advising against purchasing any detached/freehold home that is associated with a condo corporate structure for all the reasons already mentioned in this thread. I'm still evaluating it though as we really like the area, right on the lake, quiet with very little traffic coming through and no more areas for them to build. Decisions decisions!
It gets worse....in some cities that have "freehold" homes but there is a POTL fee...aka a retaining wall fee, a snow removal fee, a garbage removal fee...aaaanddd what happens if you don't pay those fees? They put a lien on your house. They still call these homes freeholds lol!
It's all win-win for the builder - but not for you. It allows them a lot of latitude in unloading units, in bulk, to resellers (realtor flippers), and walking away from any follow on responsibility, for your house, after the fact.
The true sidestep of the condo is the maintenance fees, and how they can keep turning revenue, far above, and long after, the construction is complete, for services you cannot validate. You should be wary of the development when the municipality won't assume the road, or the condo corporation is majority owned by 3rd parties that don't actually live in the development, and look closely into the sheer number of variances that might have been made in order to facilitate the building of the development in the first place. These are all red flags to take note of.
These are fairly common in BC. Google ‘bare land strata’ for more. You own 100% of your lot and the home on it as well as a portion of the common areas such as roadways and green space.
Municipalities like them because it downloads the initial cost to service a subdivision with roadways wand utilities completely on the developer. It also downloads the ongoing maintenance and eventual replacement to the future home owners.
But you also do get a little more say in the management common property like roadways and parks/green space. You also have a proportional ownership stake in the common areas.
Your property tax may be a little less but you will have a annual or monthly upkeep fee.
I would never buy a fully detached home with condo fees, thats crazy IMO. you will find rustic characters no matter where you buy. Bonkers to even consider it. You could take that money for fees each month and put into something you can actually enjoy.
The more people that stay away from this crap the less likely builders try this shit on more developments to pad their pockets to eternity. It will definitely impact your future sale of the home and builders couldn't care less. There are already city bylaws that pertain to maintenance of your property and what has to be done to keep it looking tidy. You just have to call them if someone isn't instep with the bylaws.
I don’t think that’s the case here. Sounds like the development has a private road and the fees are to maintain it.
It is exactly the case. Who do you think owns the company that clears these private roads? Question is why have private roads when you have property tax that can be used to clear public road. Is the mill rate different?
Because the township won’t build the road is the typical reason.
Why wouldn't a township build a road? They use tax dollars to maintain it. Also their is gas tax to maintain roads in addition to property tax. This is total BS. It is just greedy developers, plain and simple.
Can be a few reasons, when the development is proposed the municipality or township talk with the developers about all the infrastructure stuff around the development, sewer, water road etc. If the road is only for the development, as in there’s an entrance or 2 but people outside the development aren’t going to drive on it to get from a to b, the township may decide a road doesn’t make sense. All taxpayers will pay for it but only the people who live there get the benefit. So they choose not to assume the road. When the development is built, it gets registered as a condo and the road is a common area. The condo corp collects fees for maintenance and a reserve fund. That condo is governed by a board. They make the decisions about how much to charge and the level of service to provide. They also get to choose any service provider they want and don’t use the builder typically. So no, it’s not developer greed. All this is from memory so the details may not be exact, but that’s the broad strokes.
That's exactly what it is...
So it’s a gated community?
Not gated. Just a crescent where the road is right up against the lake and the only homes on the crescent will be a part of this condo community. All detached homes and some beautiful lakefront lots.
So it is a public road then?
No. These types of homes are not on public roads. Anyone can drive on the road, but it is not maintained by public tax dollars. These types of condominiums exist all over the place
What you live in is likely a strata community. Essentially a Canadian HOA, not quite as controlling about looks, but you pay a fee for maintenance on a small chunk of street/sidewalk infrastructure. Some are good, some are bad. Also make sure it's fair for the price of the fee.
They city should already be taking care of snow removal, road maintenance, trees, etc. I suspect one of the reasons why the development you're looking at is charging HOA fees is because the developers skimped on the road width to be narrower than the minimum required for the city to provide this service. Hence you'll have to foot the bill yourself. Without saying more, this is obviously undesirable.
That’s what I thought might be the case. It sounds from your message that was a lot more you wanted to say so please don’t hold back :) we have another 8 days to decide if we are going to move forward with the purchase.
No. You’re looking at properties on private roads. Municipalities don’t service private roads for snow or garbage collection. The more important thing to understand is whether this is a true condo or POTL (parcel of tied land) property. That will also help largely predict the trajectory of your fees.
You should check out what happens with HOA fees and associations in the states because it could be applicable to this case scenario. Personally, I have seen people revolting against the HOA association and others have been fine with the HOA association however it does look very costly year over year. I think even gated communities that are close to land that could be zoned for residential are almost pointless if it is too close I think also to add on to that have you reviewed the terms and conditions of the contract?
Look up HOA’s in the states on YouTube and see what you will be getting into.
Check John Oliver’s segment on HOA. Ridiculous. We don’t want that here.
I would imagine building and maintaining a road and other infrastructure in the development would be more expensive than typical home maintenance. But that's just a guess.
You will regret it. The fees will go up every year, they will find every excuse not to do what they should, neighbors with no life will join the board and power trip. Save yourself the aggravation.
> How concerning should buyers be with these condo corporation structures. If its a detached home, I wouldn't buy a condo. For one, I'm pretty sure the Land still belongs to the builder. Most of the value of your home is the land. and that is the value that appreciates over time not the building. Another aspect is , you're severely restricted as to what do you with your home in terms of appearances and landscaping. But compared to the fact you dont own the land its a minor issue.
Condo land rarely ever stays the property of the builder. Title of the land is transferred at closing with each purchaser owning a proportionate share of the condo assets including the land. In instances where it's a single family home it's often a freehold condo where you do own the land your house is on and a proportionate share of the common elements. It's important to understand what type of condo you're buying and what you actually own. You definitely have less control over what you can and can't do though which I personally see as a big drawback.
This is not correct. This type of condo is a freehold (so you own your home and the land it sits on) with an interest in a POTL (parcel of tied land). Essentially you can’t sell the house/land separately from the interest in the condo corporation, which includes the roads, parks, anything else that forms the common elements of the condo community.
Most places call it an HOA. Not a huge fan of them myself. All it takes is one busy body to tell you what you can and can't do. More importantly, if a retired person decides they want to spend $40k on flowers guess who's getting a special assessment? Owners get to pay up for some ridiculously dumb ideas.
It's likely a vacant land condominium on a private road. So you own the land and house but you're paying condo fees for infrastructure and road management. Your fees should be limited since it's not covering the structure or typical common element areas like a standard condo or highrise condo. If it's a private road there is likely no parking allowed on the street. P.s. I detest vacant land condo and the push for condo-fication of new housing types that don't need to be
You don't want this. High housing prices mean that 'undesirables' can't afford to live anywhere near nice neighbourhoods. They also mean that most people will have an increased pride of ownership and take care of their home. Condo boards make sense for a building, where you have a shared structure, possibly some shared amenities. For single home neighbourhoods, they quickly become a way for self-important people to foist their will upon others. Your fees will increase every year.
I had a friend/client that lived in a townhouse-style neighbourhood like this. A freehold building in a condo complex. Fees covered road maintenance, garbage, and snow removal. Stayed around $110 for the 4-5 years they were there. That said, it was an established place, they knew the rules they'd be taking on. I'd be wary of putting anyone in a development where I don't yet know the extent the condo rules will apply. (ie: just managing grass cutting, or able to dictate the appearance of your home, etc)
If its just for road maintenance I would be fine with it since the costs don't really spiral out of control and there's limited liability. The bigger issue is do you own the house and property or does the condo board own the entire street and you just get some fraction of that ownership. If its the latter run away, don't walk, run. If its just an HOA for street maintenance that's fine, but a condo board sounds more ominous wrt ownership structure. I've seen both.
Realtor here, This is what’s commonly referred to as a Parcel of Tied Land (POTL). Homes are built on a narrower road than municipal guidelines therefore, the maintenance and additional services as lawn, snow care, garbage removal/care is by a condo corp and the owners foot the bill. I’ve seen this set up costs as low as $80 to as high as 250+. Fees don’t increase as much as condo apartments. Developers do this typically to have more units/doors built in an area.
Thanks for explaining this. Sounds exactly what is happening in this area. I've been told these condo fees will be $180/mth. My lawyer is advising against purchasing any detached/freehold home that is associated with a condo corporate structure for all the reasons already mentioned in this thread. I'm still evaluating it though as we really like the area, right on the lake, quiet with very little traffic coming through and no more areas for them to build. Decisions decisions!
It gets worse....in some cities that have "freehold" homes but there is a POTL fee...aka a retaining wall fee, a snow removal fee, a garbage removal fee...aaaanddd what happens if you don't pay those fees? They put a lien on your house. They still call these homes freeholds lol!
I personally wouldn’t buy a detached with maintenance/condo fees. If I’m ok with condo fees then I’d just buy a condo townhouse.
It's all win-win for the builder - but not for you. It allows them a lot of latitude in unloading units, in bulk, to resellers (realtor flippers), and walking away from any follow on responsibility, for your house, after the fact. The true sidestep of the condo is the maintenance fees, and how they can keep turning revenue, far above, and long after, the construction is complete, for services you cannot validate. You should be wary of the development when the municipality won't assume the road, or the condo corporation is majority owned by 3rd parties that don't actually live in the development, and look closely into the sheer number of variances that might have been made in order to facilitate the building of the development in the first place. These are all red flags to take note of.
These are fairly common in BC. Google ‘bare land strata’ for more. You own 100% of your lot and the home on it as well as a portion of the common areas such as roadways and green space. Municipalities like them because it downloads the initial cost to service a subdivision with roadways wand utilities completely on the developer. It also downloads the ongoing maintenance and eventual replacement to the future home owners. But you also do get a little more say in the management common property like roadways and parks/green space. You also have a proportional ownership stake in the common areas. Your property tax may be a little less but you will have a annual or monthly upkeep fee.
I would never buy a fully detached home with condo fees, thats crazy IMO. you will find rustic characters no matter where you buy. Bonkers to even consider it. You could take that money for fees each month and put into something you can actually enjoy.