When you buy a condo, there are different types of legal ownership, such as freehold or leasehold, or if buying with others, joint tenancy or tenancy-in-common. Here is an overview of your options:
Types of Legal Interest in Land
This type of ownership in land entitles the owner to use the land for an indefinite period of time and to deal with the land in any way he or she wishes, subject to legislation (eg the Condominium legislation), contractual obligations (eg condo and regulations, etc.) and any charges which encumber the title of the property and which are filed in the provincial land registry office (e.g., mortgages, liens, judgments, etc.). Another term for freehold is fee simple. Most owners of condominiums acquire fee simple interest.
In this example, the holder of the interest in land has the right to use the land for a fixed period of time, for example, 50 or 99 years. The owner of the property (landlord or lessor) signs an agreement with the owner of the leasehold interest (tenant or lessee) setting out various terms and conditions of the relationship. The contract in relation to a condominium would set out such conditions as maintenance requirements, restrictions on use of the land, building construction requirements, and other matters. The leasehold interest can be bought and sold, but the leaseholder can only sell the right to use the land for the time that is remaining in the lease – subject, of course, to any conditions contained in the original lease.
Types of Joint Ownership
You may wish to have shared ownership in the property with one or more other persons. There are two main types of joint ownership: tenancy-in-common and joint tenancy.
In this form of ownership, the tenants can hold unequal shares in the property. Each party owns an undivided share in the property and therefore is entitled to possession of the whole of the property. For example, there could be five people who are tenants in common, but four of them could each own one-tenth (1/10) of the property and the fifth person could own six-tenths (6/10) of the property.
If the holder of a tenancy-in-common wishes to sell or mortgage his or her interest in the property, that can be done. When a buyer cannot be found and the tenant-in-common wants to obtain his money out of the property, he can go to court and under a legal procedure call “partition”, request that the court order the property be sold and that it distribute the net proceeds of sale proportionately.