Freehold or Strata? What You Actually Own When You Buy in BC

Two homes can look alike from the street and come with very different kinds of ownership. Whether a home is freehold, strata, bare land strata or leasehold affects what you own, what you pay each month and who makes the decisions. Here is a plain-language guide for BC buyers.

The short version

At a glance

Freehold

With a freehold home, also called fee simple, you own the land and the house on it. There are no strata fees or bylaws, but you are responsible for every repair, from the roof to the drains, and for insuring the whole property. City zoning and bylaws still apply, and they decide what you can build or add.

Strata

In a strata, your strata lot is your home. The common property is the rest of the land and buildings that isn't part of any strata lot, such as hallways, roofs and grounds. You own the common property together with the other owners, in shares based on unit entitlement, and strata fees are usually divided the same way. For homes, unit entitlement is usually based on habitable area, or set equally for every lot.

Some common property is limited common property, set aside for the exclusive use of one or more owners, such as a balcony, patio or parking stall. The strata insures the buildings and common property, and owners insure their own belongings and improvements.

Most townhouse complexes in BC are stratas. Small stratas of four or fewer lots, common with duplexes and triplexes, don't need depreciation reports, but they must still put at least 10% of their annual operating budget into the contingency reserve fund. In a strata with fewer than four lots, every owner is usually on council. Read the strata documents to read before buying before you commit.

Bare land strata

In a bare land strata, the lot lines are set by survey rather than by walls, floors and ceilings, so you own a piece of land, and usually the house on it. Unless the strata plan shows the buildings or the bylaws say otherwise, owners generally maintain and insure their own homes, while the strata looks after the common property, such as private roads, a clubhouse or shared services. Bylaws and strata fees still apply.

Duplexes and co-ownership

A duplex can be owned in several ways: as a two-lot strata, as two freehold lots with a registered party wall agreement, or as one title shared by co-owners. Co-owners usually hold title as tenants in common, with a written co-ownership agreement that covers each owner's share, the mortgage, expenses, disputes and what happens on a sale or an owner's death.

How you hold title matters for any home you buy with someone else:

• Joint tenancy. Joint tenants have a right of survivorship: when one owner dies, their share passes to the surviving owners.
• Tenancy in common. Owners can hold unequal shares, and each owner's share passes through their estate. Unless the title says joint tenancy, owners are tenants in common.

Freehold row houses exist in BC but are uncommon. Each shared wall relies on a registered party wall agreement, which binds future owners to its terms, such as how the wall is repaired and maintained.

Leasehold

With a leasehold, you buy the right to live in a home for the rest of a long-term lease, while the land stays with the landowner. In Metro Vancouver, strata leaseholds are found at places such as UBC and SFU's UniverCity on Burnaby Mountain, and the Province's planned homes at the Heather Lands in Vancouver will also be strata leaseholds. Leases are often for 99 years, although some earlier ones were for 60. The lease counts down from the date it began, not from when you buy, so a resale home has fewer years left.

BC's three-business-day home buyer rescission period doesn't apply to leasehold homes, and the Province notes that lenders may require a higher down payment and may be reluctant to lend toward the end of the lease. I describe UniverCity in Moving to Burnaby.

Housing co-ops

Most housing co-ops in Metro Vancouver are non-profit, and members don't buy equity. In the less common equity co-ops, you buy shares that come with the right to live in a unit, there is no registered title to the unit itself, and financing can be harder to find.

How to tell what you're buying

• The listing. It should show the type of ownership, and for strata homes, the strata fees.
• The title search. It shows whether the property is a strata lot, how title is held and what is registered against it.
• Your lawyer or notary. Ask them to explain anything on title you don't understand before you remove subjects.

Questions buyers often ask me

What is the difference between freehold and strata?

With freehold, you own the land and the house and handle everything yourself. With strata, you own your strata lot and a share of the common property, pay strata fees and follow bylaws.

What is a bare land strata?

A strata where the lots are defined by survey rather than by walls. Owners usually own and look after their own homes, while the strata manages shared property such as roads.

Are townhouses in BC freehold or strata?

Most townhouse complexes in BC are stratas. Freehold row houses exist but are uncommon, and each shared wall relies on a registered party wall agreement.

What does leasehold mean when buying a home?

You buy the right to live in the home for the rest of a long-term lease, while the land stays with the landowner. The home buyer rescission period doesn't apply to leasehold homes.

What is the difference between joint tenancy and tenancy in common?

Joint tenants have a right of survivorship, so a deceased owner's share passes to the other owners. Tenants in common can hold unequal shares, and each share passes through the owner's estate.

Buying for the first time? See First-Time Home Buyer Programs in BC and From Offer to Keys.

This article is general information, not legal advice. For the Province's overview, see kinds of stratas.