What does the buyer purchase when buying a property in Canada?
— This should be the first question that the buyer should ask when looking to purchase their home or investment property.
Before looking to sign a contract, it is very important to know the type of ownership that you are getting into, as its going to be one of the greatest investments in your life right?… The most common in BC are Freeholds and Leaseholds.
The types of ownership in BC are:
A. Absolute ownership
It does not exist in Canada — the crown is the only absolute owner and the one in control of the underlying title of the land. Instead, certain rights in respect to land may be owned by individuals, subject to the rights of the crown.
B. Freehold ownership
Is the maximum interest in land or legal ownership that a person can hold in land in Canada. With it, you:
› OWN the LAND + the BUILDING/unit above it.
› own it without time limitation
› freely use and enjoy it
› sell it
› rent or lease it (if approved by the strata plan)
› grant mortgages
› grant easements
› grant other interests in land
› dispose of it under the terms of a will
Has a separate landowner and you will OWN the BUILDING/UNIT above ONLY. You will pay a monthly lease rent to the landowner. This lease lasts a few years (normally 100 years). When the lease finishes its renegotiated, and you will need to relinquish the property... unless the landowner is willing to sell the lease portion.
D. Life estate, estate pur autre vie, and some others...
In conclusion...the most common in BC are Freehold and Leasehold. Its essential to keep in mind that when you buy:
> Freehold: you own the LAND + the BUILDING
> Leasehold: the land has a separate landowner + you own the BUILDING/UNIT above it + you have to pay a lease rental fee to the landowner.