What should I know about bare land condominiums?

As the cost of housing generally has increased over the past decades condominiums have increasingly become more acceptable as an option to solve that challenge. A condominium however is a type of ownership, not a type of structure which is highlighted so starkly in the bare land condominium. Let’s think through the things to consider about bare land condominiums so you are not caught unaware.

What is a bare land condominium?

One of the biggest misconceptions about condominiums is what exactly a condominium is. Many consumers believe a condominium is an apartment-style property in a complex that offers amenities for its owners. Although this may be accurate, it is not the whole story as a condominium can be almost anything from an apartment or townhouse to the lot under a single-family home or a 20-acre parcel of rural land. The reason for this is that a condominium is a type of corporate ownership of a project, rather than simply owning a piece of individual real property. So, when we reference a special category of condominium as ‘bare land’ it means it is still condominium ownership but not in the conventional way. A bare land condominium as the name describes, means only the bare land is condominimized. There may be a house, deck, garage, and gazebo on the lot itself, but only the land underneath those improvements is part of the condominium corporation and under their responsibility for dues, expenses, etc.

How does this make any difference?

Well, a condominium corporation is required by the Condominium Properties Act to keep financials including expenses related to the assets of the corporation on behalf of all the owners. In a conventional condominium project, this would include things like doors, windows, roofs, HVAC systems, etc. as well as other smaller items like cleaning and maintaining a carpet in the hallways of an apartment condo building, or things like steps or sidewalks to townhouse style or half-duplex condos.

In the case of a bare land condominium, there aren’t any of those things since only the land is included in the corporate condominium ownership. This means there may be a road, sidewalk, greenspace, or gate that needs maintenance under the bare land condominium responsibility but the improvements on the lots themselves are normally the sole responsibility of the owner individually. For this reason, one of the key giveaways of a bare land condominium is a monthly condo fee of a couple of hundred dollars versus a conventional condo fee of a much higher amount because a bare land condominium simply doesn’t need to cover all the extra items under the responsibility of a conventional condo corporation.

Are there still the same document requirements?

The short answer is yes! A bare land condominium is still a condominium that is governed by the same Condominium Properties Act legislation, so all the same requirements apply. The regulations require a condominium corporation to maintain records such as bylaws, financials, minutes, reserve fund studies, etc. and that is no different for a bare land condominium, except that the content of those documents may be a bit different.

When a buyer is considering buying a bare land condominium property the same care should be taken to ensure they have all available documents to make an informed decision, as well as a condominium document review condition to ensure they have sufficient time to review them or have them reviewed by a condominium documents review professional.

Is there an easy way to identify a property as a bare land condominium?

There are two main ways to determine if a property is a bare land condominium, and thankfully they are already documents you should be obtaining anyway.

The first is a current copy of the land title on which you can check the legal description. If the land title shows a plan, block, and lot number for the legal description it is not a condominium. If it shows only a plan and unit number for the legal description, then it is a condominium with a registered survey plan.

The next step would be to obtain a copy of that survey plan, which is a drawing of the individual units included in the condominium. Often if it is a bare land condominium it will say so on the survey plan, but not always, so the sure way to determine if it is a bare land or conventional condominium is to look at the drawing itself. If the units are simple rectangular lots, then it is surely a bare land condominium since a conventional condo would require much more detail of the defined space in the complex registered as units, such as the outline of the building, floor levels, etc. When you see those plain rectangles only on the survey plan, that is a dead giveaway that you are dealing with a bare land condominium, and even though it may look like a normal home in a normal neighborhood, there will be associated fees and bylaws associated that the buyer needs to know about.

One other quirk

There is one additional quirk about bare land condominiums that shouldn’t escape notice. In a conventional condominium, the unit space is defined by the survey plan including the improvements arranged on the land itself. Since the whole project for example, fits onto a single piece of real property all the improvements are outlined in the survey plan without any issues of encroachment etc. In a bare land condominium, only the lot itself is part of the condominium but the owner of that lot may build things on it that subsequently encroach or cause other issues to fellow unit holders.

For this reason, unlike conventional condominiums, bare land condominiums do require a Real Property Report with evidence of compliance or non-conformance with municipal bylaws as part of the standard AREA contracts. If however, the bare land condo remains only land and has no structures on it, then obviously it would be impossible for it to encroach on another property and would no longer require a real property report.

Bare land condominiums can take all different forms from parking stalls to large parcels of land, and everything in between so just know that looks can be deceiving. By pulling the land title early in the process, it could be determined early on what direction to go and avoid potentially enormous problems.