Can POTL properties have big status certificate and financial issues.

Before we get in to the topic let’s refresh the definition of POTL.

POTL, short for A Parcel of Tied Land, from the residential perspective refers to freehold properties attached to a parcel of land. The house itself, most often a townhouse, but can be semi or detached, is a freehold, there are no monthly maintenance fees for it like there are for condos or condo townhomes, but there is a monthly maintenance fee for the attached land, typically a private road, common elements such as a small playground, visitors parking and so on. The monthly fees for POTL are typically much lower than for condo townhouse, but are governed by the same condominium rules, must contribute to the reserve fund, be audited every year, and must follow all other rules as established by Ontario Condominium Act.

When buying a POTL property, the buyers should do a proper due diligence and makes sure the status certificate is properly reviewed prior to waving the status certificate condition.

Can POTL properties have special assessments and other financial difficulties?

The answer is definitely yes, while significant special assessments are quite rare for POTL properties, much less common than for condos and condo townhomes, simply because the fees don’t cover any of the elements of the buildings, POTL properties can run into financial issues due to mismanagement or faulty constructions on the land.

Recently The Arthur Townhouses,  a 51 unit townhouse complex completed by a large developer Treasure Hill in 2021 at 10242-10295 Keels St & 18 McNaughton Road in Maple ON., is facing a potential $2M special assessment (approximately $40K per unit). As reported by CBC a playground collapsed in 2024, the builder is denying any wrong doing, insurance company denied compensation, Tarion only covers individual units.

Being very active in the condo real estate around GTA we have seen many large special assessments for condo apartments and condo townhomes, this is the first special assessment of this magnitude for POTL property.

These don’t happen very often, nevertheless it is important to take the possibility of this happening into consideration and do a proper due diligence when purchasing a POTL property.

Please let us know if you have any questions.