You’re not just buying a home — you’re buying a form of ownership
Every Canadian home falls into one of two broad ownership structures, and which one you’re buying matters more than the paint colour or the kitchen. In a freehold, you own the land and the building on it, and you’re responsible for maintaining all of it.[1] In a condominium — called a strata in British Columbia — you own your individual unit plus a shared interest in the common property, and a corporation made up of all the owners manages the shared parts under provincial law.[1]
That single distinction ripples through everything: how much you pay each month, who decides when the roof gets replaced, whether you can have a dog or rent the place out, and what kind of nasty financial surprise can land in your mailbox. A detached house is almost always freehold. A high-rise unit is almost always a condo or strata. But in between sits a category that trips up more buyers than any other — so we’ll start there.
Price tells you what you’ll pay. Ownership structure tells you what you’re actually getting — and what can go wrong.
“Townhouse” is a shape, not a title
Here is the clarification that saves buyers from expensive misunderstandings: “townhouse” describes the form of the building — attached, ground-oriented, sharing walls — not its legal ownership. The very same townhouse can be sold two completely different ways.[2]
A freehold townhouse (or row house) means you own the home and the land under it, and you handle your own exterior, yard, and repairs — much like a detached house, just with smaller outdoor space and possibly a shared-driveway or party-wall agreement with a neighbour.[2] A condo- or strata-titled townhouse looks identical from the curb, but you own your unit and share common elements, pay monthly fees, and follow the corporation’s rules.[2] The two carry very different costs and very different freedoms — so the first question to ask about any townhouse is never “how much?” but “freehold or condo?” The same caution applies in reverse: a few detached-looking homes sit in “common elements” condos or parcels of tied land (POTL) and carry modest shared fees. Confirm the title, every time.
Freehold: total control, total responsibility
Freehold is the ownership most people picture: the land and the structure are yours. You decide what to renovate and when — subject to municipal bylaws and permits — and no board can tell you what colour to paint the door. The trade-off is that you bear every cost, and all of the volatility. When the roof fails or the furnace dies, there’s no shared fund to draw on; it’s a five-figure bill that arrives on your timeline whether you’re ready or not. A common planning rule of thumb is to budget roughly 1% of your home’s value each year for maintenance (covered in the owning guide).
Because there’s no corporation and no status document, your due diligence on a freehold rests on a title search (to surface easements, shared driveways, or restrictive covenants), a survey, a thorough home inspection, and the seller’s disclosures.[2] What you see is what you’re responsible for.
Condo / strata: shared cost, shared control, shared risk
Buy a condo or strata and you own your unit plus a proportionate share of the common property — lobbies, hallways, the roof, the elevator, the grounds — all run by a corporation that every owner belongs to. In Ontario that’s a condominium corporation under the Condominium Act, 1998; in BC, a strata corporation under the Strata Property Act.[1] You pay a monthly fee — legally “common expenses” in Ontario, “strata fees” in BC — set as your unit’s proportionate share of the budget.[3]
Those fees buy real things: building insurance, common-area utilities, professional management, cleaning, landscaping, snow removal, elevator servicing, any amenities like a gym or pool — and, critically, a monthly contribution to the reserve fund (more on that next).[3] The upside is predictability: major repairs are someone’s job and are funded in advance, and you never personally shovel the walk. The trade-off is autonomy. A board (in BC, a strata council) sets and enforces rules on pets, rentals, renovations, and parking; you get a vote, but decisions are collective, and your fees can rise — sometimes sharply — when costs climb or the reserve runs short.[3]
The reserve fund is the heart of it
If there is one thing that separates a sound condo or strata from a money pit, it is the health of its reserve fund — the pool of money set aside for big-ticket repairs and replacements. This is where buyers who only looked at the monthly fee get blindsided.
In Ontario, every condo must maintain a reserve fund and commission periodic reserve fund studies by qualified professionals, projecting decades of future repairs and setting contribution levels accordingly; the study is updated at least every three years.[4] In BC, the equivalent is the contingency reserve fund (CRF), paired with a depreciation report prepared by a qualified person that estimates the repair and replacement cost and remaining life of major components — roof, plumbing, elevators, balconies, siding — typically across a 20-to-30-year horizon.[5]
When that fund can’t cover a major expense, the corporation raises the money through a special assessment (Ontario) or special levy (BC): a one-time charge on every owner, calculated by the same proportionate share as your regular fees — and routinely running into the thousands or tens of thousands of dollars.[6] The mechanics differ in a way worth knowing: in Ontario, a board can levy a special assessment without a vote of the owners, and the obligation is enforceable by a lien on your unit; in BC, a special levy generally requires a three-quarters vote at a general meeting.[6]
⚠ An underfunded building is a bill with your name on it
Ontario’s Auditor General has reported that a large majority of condominiums registered between 1980 and 2000 were not adequately funding their reserves.[4] The danger is concrete: imagine a strata with $12,000 in its reserve facing a $180,000 elevator replacement — that gap becomes a special levy of thousands per owner.[5] And if a levy is approved shortly before you take possession, you can be the one who inherits it.[6] A low monthly fee paired with a thin reserve isn’t a bargain; it’s a deferred bill.
Read the document that tells you the truth
Every province gives a buyer one document that reveals a corporation’s real financial health — and reading it (with attachments) before you remove your conditions is the single most protective thing you can do.
In Ontario, that’s the status certificate. It’s mandatory in a resale condo purchase, the corporation must provide it, and the fee is capped at $100 including HST. It discloses the budget, the reserve fund balance, any existing or proposed special assessments, known legal matters, and the rules — and you should have a real-estate lawyer review it, ideally as a condition of your offer.[7] Disclosure carries real weight: in one Ontario case, a buyer was relieved of a roughly $34,000 special-assessment share because the corporation had failed to disclose it in the status certificate.[6]
In British Columbia, the equivalent is the Form B Information Certificate under section 59 of the Strata Property Act. It discloses the monthly strata fees, anything the seller owes the strata, any approved special levies, the CRF balance, litigation, parking and storage, and an insurance summary — and it must come with the strata’s bylaws and rules, the current budget, and the most recent depreciation report attached.[8] One subtlety: a Form B is a snapshot valid only on the day it’s signed, so a form that’s technically less than 30 days old can already be stale if an annual general meeting happened after it was prepared — ask for a current one.[9] (A separate Form F, the Certificate of Payment, confirms the seller has paid what they owe and is needed to close.)[9]
In both provinces, don’t just skim the summary — read the attachments: the reserve fund study or depreciation report, the recent financials and meeting minutes, and the bylaws on pets, rentals, and renovations. A weak reserve, a pending levy, or a rule that clashes with your life is grounds to renegotiate the price or walk away. One exception to flag: a brand-new pre-construction unit has no status certificate or Form B, because the corporation doesn’t exist yet — there, your protection is the developer’s disclosure statement (a topic for the new-construction guide).[8]
In a condo or strata, the building’s books are part of what you’re buying. Read them like you’d read the inspection report — because they predict your future bills.
Matching the structure to your life
None of these is “better” — they suit different lives. A freehold detached house gives you the most control and the broadest resale appeal, at the cost of bearing every repair yourself and absorbing the volatility. A condo or strata offers predictable costs, shared amenities, and a lower entry price — well suited to first-time buyers, downsizers, and anyone who’d rather not own a snowblower — in exchange for less autonomy and exposure to reserve-fund risk. A freehold townhouse sits in the middle: ground-oriented and self-managed, usually with less exterior to maintain.
Two things hold across all of them. First, insurance: in a condo or strata the corporation insures the building and carries liability coverage, but that does not cover your unit’s contents, your personal liability, or your share of a large insured loss — you need your own unit policy, ideally with loss-assessment coverage (see the setting-up-your-home guide).[3] Second, lenders look at the property, not just you: for a condo or strata, they’ll weigh the reserve fund’s health, the share of owner-occupied units, and any litigation before approving your mortgage.[2]
Your “what am I buying” checklist
Know the ownership before you fall for the kitchen.
Where to turn
- Condominium Authority of Ontario — condoauthorityontario.ca — plain-language primers on condo fees, reserve funds, status certificates, and special assessments, plus the Condominium Authority Tribunal for disputes.
- Government of BC strata housing — gov.bc.ca — the Form B Information Certificate, depreciation reports, and contingency reserve fund & special levy rules under the Strata Property Act.
- Condominium Home Owners Association of BC (CHOA) and the BC Financial Services Authority (BCFSA) — buyer-focused guides on strata documents, the CRF, and what Forms B and F mean.
- CMHC — cmhc-schl.gc.ca — condominium buyer’s guidance and what to verify (fees, reserve health, the status certificate) before you buy.
- A real-estate lawyer — make a review of the status certificate or strata documents a condition of your offer; it’s the cheapest insurance in the whole purchase.
The home that wins you over at the showing is rarely the thing you’re really buying. You’re buying a form of ownership, a set of rules, and — if it’s a condo or strata — a share of someone else’s balance sheet. Confirm the title, read the reserve and the disclosure document, and match the structure to the life you actually want, and you’ll buy the right kind of home, not just the prettiest one.
What Am I Buying? Ownership & Document Check
A fillable companion — confirm the title, read the reserve study or depreciation report, and check for a special levy before you remove conditions.
Open the worksheet →Sources & further reading
- Condominium Authority of Ontario / Government of British Columbia — in a freehold you own the land and building and maintain everything; in a condominium (Ontario, under the Condominium Act, 1998) or strata (BC, under the Strata Property Act) you own your unit plus a share of common property managed by a corporation of all the owners. condoauthorityontario.ca — before you buy
- Government / CMHC home-buying guidance and provincial title practice — “townhouse” describes the building form, not the title; a townhouse may be freehold (you own the land, maintain your own exterior) or condo/strata (shared elements, fees, rules); freehold due diligence relies on a title search, survey, inspection, and seller disclosure, while lenders also assess a condo project’s reserve health, owner-occupancy, and litigation. cmhc-schl.gc.ca — buying a home
- Condominium Authority of Ontario — condo fees (legally “common expenses,” “strata fees” in BC) are each unit’s proportionate share of the budget and fund building insurance, common utilities, management, landscaping, snow removal, elevator servicing, amenities, and reserve-fund contributions; the corporation insures the building and carries liability coverage, but owners need their own unit insurance. condoauthorityontario.ca — fees and finances
- Government of Ontario, Condominium Act, 1998 (s.84 obligation to contribute; s.94 reserve fund and reserve fund studies; s.134 lien) and Ontario Auditor General — every condo must maintain a reserve fund and commission reserve fund studies by qualified professionals, updated at least every three years; the Auditor General has reported that a large majority of condos registered between 1980 and 2000 were not adequately funding their reserves. ontario.ca — Condominium Act, 1998
- Government of British Columbia, Strata Property Act (s.92–96 contingency reserve fund; s.94 depreciation report) — a strata must hold a contingency reserve fund and obtain, from a qualified person, a depreciation report estimating the repair and replacement cost and remaining life of major items (roof, plumbing, elevators, balconies, siding), typically over a 20–30-year horizon; reserve and depreciation-report requirements have been periodically reformed, so confirm the current cycle. bclaws.gov.bc.ca — Strata Property Act
- Condominium Authority of Ontario and Government of British Columbia (Strata Property Act s.108–109) — when the reserve cannot cover a major cost, the corporation levies a special assessment (Ontario) or special levy (BC), calculated by each owner’s proportionate share and often in the thousands to tens of thousands; an Ontario board may levy without a vote (enforceable by lien) while a BC special levy generally requires a three-quarters vote, and a levy approved before a sale can pass to the buyer. condoauthorityontario.ca — special assessments
- Condominium Authority of Ontario — in a resale purchase the status certificate is mandatory and the corporation must provide it (fee capped at $100 including HST); it discloses the budget, reserve fund balance, existing or proposed special assessments, legal matters, and rules, and should be reviewed by a real-estate lawyer, ideally as a condition of the offer. condoauthorityontario.ca — status certificates
- Government of British Columbia, Strata Property Act s.59 — a buyer is entitled to a Form B Information Certificate disclosing monthly strata fees, amounts the owner owes, approved special levies, the contingency reserve fund balance, litigation, parking and storage, and an insurance summary, with the strata’s bylaws and rules, current budget, and most recent depreciation report attached; a pre-construction unit has no Form B because the strata does not yet exist (the developer’s disclosure statement applies instead). www2.gov.bc.ca — Form B
- BC Financial Services Authority — a Form B is a snapshot valid only on the day it is signed, so a form less than 30 days old can still be out of date if an annual general meeting occurred after it was prepared; a separate Form F (Certificate of Payment) confirms the seller has paid amounts owed and is required for the sale to complete. bcfsa.ca — Form B Information Certificate
Comments