Legal Brief for February, 2024

What Is A Bare Land Condo?

Prospective homeowners are increasingly considering the condo option these days as the prices for single detached homes continue to escalate.  Condo units come in two basic types.

The type of unit most people think of is contained in a multi story building - which can range from 3-4 stories to 30 or more stories high, depending on the area of the city that it is located in.  These units are sometimes referred to as "conventional" condos or "stacked" condos.  With this type of condo the owner owns their unit and also a share of the hallways, lobbies, structure of the building and the land on which the building is located.  These are known collectively as the "common property".  The condo association collects monthly condo fees in order to maintain the common property.

The second type of unit is known as a "bare land condo".  These units are typically a duplex or townhouse style unit.  The land on which the unit is situated does not form part of the common property but rather is actually owned by the condo unit owner.  This includes the housing structure itself, the garage (if detached), the landscaping and any improvements such as decks.  There may still be some common property, such as sidewalks and walkways and parking lots, but the amount is much less that in a conventional condo project.  Condo fees are still payable in a bare land condo development but they are generally lower because each unit owner is directly responsible for the costs of maintaining their own unit property.

The original provisions of the Condominium Property Act required that in a condo development of townhouse or duplex units the developer had to register the condo plan to cover the entire area of the eventual development, notwithstanding that portions of it might not be developed for many years.  This created a variety of obstacles for developers and was hindering flexibility in "building out" these types of condo properties.  A development of this type might feature 30 housing units, all sitting on the common property of the project, with the unit owners owning simply in effect the space within their units.  The amendments to the Act allowed developers to register their condo plans in incremental stages, which allowed them to get started sooner on their projects and not have to take into account such wide scope of development right at the start.

As noted, the bare land style of condo development allows for each unit owner to actually own the portion of the land on which their unit is located.  One of the important aspects of this status for a purchaser is that they must ensure that they receive what is known as a real property report from the seller when they are purchasing the unit, in order to ensure that what is built has all of the necessary permits and that it complies with all the applicable zoning regulations.

If you are considering buying a condo unit it is important that you and your realtor (and your lawyer) pay attention to whether it is a conventional unit or a bare land unit, because each type of unit poses different legal risks in terms of protecting yourself fully as the purchaser.