Apartment Building vs. Condo Rental

Written by Shlomo Sharon | 17 May 2014

The Renter's Guide

You have decided that you are now ready to rent a residential unit. You do your homework and search for information that is available to you. You find out that there are units for rent in a rental apartment building, but there are also units for rent in a condominium building. You are not sure what the difference is in renting between the two types of buildings. What are the advantages and disadvantages in renting in each of these buildings? Let’s explore it.

 

A rental apartment consists of only rental units and the entire building is owned by a single entity, which directly or through a management company rents the units and manages the entire building. A condominium building on the other hand consists of many individual owners, of which some of them live in the building, while others are offering their units for rent. In recent years, very few rental apartment buildings have been constructed in the Greater Toronto Area. In other words, one can label it “the new versus the old”. However, each one of them has its advantages and disadvantages. You as the renter have to decide which one will fulfill your needs. The rental unit in a rental apartment building is usually a larger size unit in comparison to a similar (one or two bedroom) unit in a condominium building. The units in a condominium building tend to be smaller. The rent amount, per square foot, will also most likely be lower in a rental building than a similar unit in a condominium building. This reflects mainly the need for a return on the investment by the unit owner. As well, a new condominium building has a lot more to offer in terms of amenities. A new condominium building may offer a 24-hour concierge or security; also a fitness room, a party room, a movie room and even an indoor swimming pool can sometimes be available. On the other hand, a rental apartment building may have the cost of utilities included in your rent, while a rental unit in a condominium building may have some of the utilities charged to you in addition to your rent. In speaking about utilities, in a condominium unit you have the ability to control the heating and air conditioning, in a rental building, it is usually (some buildings have sub-metering) centralized and controlled by property management. When renting in an apartment building, any issues you may face will be dealt with the property management company, who will have to attend to the issue that you have brought to their attention and resolve it for you. In a condominium building, the management company on site will deal only with the common element issues of the building. If you have any issues, which pertains to your unit, such as a leak in your faucet, failure of your appliance, the property management is not there to deal with these issues, as these issues are not part of the common elements. Any such issues would have to be dealt directly with the owner or his representative of your unit. If the owner is not available for any reason, you may have to deal with it on your own and then resolve the responsibility with the owner. Also, living in condominium unit you will have to comply with the By-Laws and Rules and Regulations of the condominium, which you should be made aware of by the owner. Any deviation from these by-laws and rules, such as noise issues, pet issues, littering, it will be the unit owner who will be contacted by management, who in turn will have to deal with you. There is one more aspect in renting a unit in a condominium building: if the unit owner goes into default on either their mortgage or condominium fees, or both payments, the mortgagee or the condominium corporation will commence legal action. This can affect the tenant whereby the rent is attorned and the tenant would be instructed to pay either the mortgagee or the condominium corporation. This type of situation is not as common in Canada, but more so in the United States.

But if the unit is foreclosed or sold, the tenant may have to move, after all, this is an investment to the owner, and they will choose to sell based on finances, not your needs. If the owner wants to use the suite for themselves or immediate family, you will be told to move. And if you don’t have deep pockets you may have to move. Condominiums built after 1998 are exempt from the rent control portion of the Residential Tenancy Act. While older apartment buildings need to follow the Annual Rent Increase guidelines, the newer developments are allowed, annually, to raise the rent as mush as they decide the market can bear.

In order to determine which type of building is suitable for you, the one with larger units or the smaller one which may have more amenities available, it is all a matter of preference. But now you are a lot more informed and aware of the differences so that you can make an educated decision.

 

Shlomo Sharon is CEO of Taft Management Inc. and a member of CCI since 2002. Taft Management Inc. is an ACMO 2000 Certified Property Management Company and has been providing property management services since 1996. Visit the website www.taft-forward.com for further information or email him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .