Rent Real EstateCanadian High-Rise Buyers Face Tenure Choices
Canadians who decide to sell their house and adopt a high-rise
lifestyle, may think the toughest decision has been made. However, one
other critical choice lies ahead. A decision regarding the type of
tenure that will suit their needs will be necessary before they move:
"Should we rent an apartment, purchase a condominium unit, buy into a
cooperative or select a life lease unit?"
Stand on the sidewalk and look at a residential high-rise building and
you may not be able to tell whether the building is rental, condominium,
cooperative or life lease. Individual units under these tenure
variations may offer similar comforts and building facilities may be
equally basic or luxurious, but your rights as a resident are
dramatically different.
As a tenant in a rental suite, your rights are dictated by the
provincial residential tenancy Act, such as Ontario"s Tenant
Protection Act, and the contract or lease you have with the owner of
the building.
Purchase a condominium unit and you have ownership rights
similar to those of a house owner, but with limitations related to the
coexistence of multiple owners. You must agree to live by the bylaws and
policies legally registered for the condominium and abide by management
decisions made by the condominium board that oversees the complex.
Buy into a cooperative and you purchase a share in the
corporation which owns the building and the land. As a share holder you
have the right to occupy a specific unit, but you must contribute to the
operation of the cooperative.
When you put your money down for a life lease unit, your rights
will vary according to the province you live in. For example, in
Ontario, life lease residents are neither tenants nor owners, but have a
contractual relationship with the sponsoring organization that owns the
building. Residents have purchased the right to occupy a specific unit,
but will have little say in how the building is operated and what rules
must be lived by.
No one of these four options is better than the other. Availability,
location and price range are standard considerations, but each tenure
type has specific advantages and disadvantages that must be weighed
against your needs, finances, interests and personal preferences. For
instance, life lease, the newest of the four tenure options
open to Canadians, are still principally built by nonprofit
organizations such as churches and legions to cater to those in
retirement. Each life lease offers a unique financial, lifestyle and
legal arrangement that must be carefully investigated on its own merits.
Those attracted to life lease usually see an advantage in the
restriction to residency to those over age 55 or 65.
You may have strong personal feelings about renting or owning that
naturally draw you in one direction or the other. Your experiences as a
tenant or home owner may prejudice you against the other alternative.
However, to ensure you gain the greatest advantage possible when you
relocate, take the time to look carefully into the financial and
lifestyle aspects of both choices and the all the variations on
ownership. Your financial and real estate advisors can walk you through
the financial impact of each option. They will help you weigh each in
relation to your entire financial portfolio, and your present and future
lifestyle needs.
Be sure you select an advisor who fully understands the differences
between living as a tenant and living as an owner. If the advisor sees
renting as a way to free up capital that the advisor can invest to earn
commissions or fees, you may not be getting the unbiased advice you need
and expect.
Put as much time into selecting your tenure type and clarifying your
rights as you do into selecting broadloom and other interior decorating
elements and you"ll ensure that your new home suits your lifestyle on
all dimensions.