Know the Difference Between Divided and Undivided Co-Ownerships

Thinking about buying a condo?  It is important to know that not all co-ownerships are condos.    There is a difference between a divided and an undivided co-ownership.  A condo is actually a divided co-ownership, meaning that each unit in the building has its own cadastral number and is independent from the others.

When you purchase a divided co-ownership, your unit is independently owned by you, but you become part owner of the common areas.  Your unit will have its own certificate of location, and its own tax bills.  You will need to have a minimum 5% down payment before purchasing your condo.  Once you become the owner, you can rent it out if you please.

An undivided co-ownership, on the other hand, is not a true condo.  If you purchase a unit that is 25% of the undivided co-ownership, for example, you do not own your share outright, but will own 25% of the unit.  You will also be responsible for 25% of the single tax bill for the building, and 25% of all common expenses.  You would need to come up with a 20% down payment before purchasing, and there will be only one certificate of location for the building.  Also, you will not be able to rent out your unit as you please.

So there is quite a bit of difference between divided and undivided co-ownerships, and it is important to know exactly what you are buying.  Take the time to work with a qualified real estate broker, who will be able to answer all your questions and provide invaluable guidance and resources to help you succeed in your purchase.

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