POTL - What is that?
Friday Oct 07th, 2022
What is POTL.
The term is associated with certain types of properties, in this short blog we will explain what it means as well as how it affects some properties.
POTL is short for A Parcel of Tied Land.
The most common forms of ownership of properties are freehold (detached or semi-detached homes, freehold townhomes) and Standard Condominium Corporation (your typical condo apartment, condo townhomes).
POTL in the context of GTA residential real estate ownership refers to a freehold property (most often a townhome but can be detached or semi) with no monthly fees paid for the maintenance of the structure which is tied to a parcel of land in a form of Common Elements Condominium Corporation (CEC) where there are no units (unlike in Standard Condominium Corporation) but the corporation is responsible for maintenance of the common elements such as private road, park, parking, playground and so on.
The designation of these properties creates a bit of a confusion because they are listed as freehold properties with monthly fees. For some it is difficult to understand how is this possible or is it correct, the answer is it is correct since the unit itself is a freehold but the owner of the unit is partially responsible for the maintenance of the common elements.
Freehold properties with POTL are increasingly common in GTA, the main reason for it is that the municipalities don’t want to take on being responsible for new roads, the roads constructed for these new properties are private and are maintained by the unit owners. This typically includes snow plowing, garbage pick up, maintenance as well as contributions towards the future major repairs of the roads or other common elements.
The rules governing the Common Elements Condominiums are the same as the rules and regulations for the Standard Condominium Corporations, they need to be properly managed, audited, reserve fund established and be properly funded, status certificate issued and reviewed when purchasing the unit and so on. The status certificate will need to include documents such as declaration, bylaws, budged, financial statements, reserve fund study and so on.
POTL fees are typically lower than Standard Condominium fees, and often range between $50 to $250 per month but will increase over time just like regular condo fees.
If you have any questions on this subject, please don’t hesitate to contact us.