What is POTL Fee
What is a POTL property?
When buying a Townhouse, many times we come across a term POTL. While there are basically two types of townhouses viz. Freehold and Condo Townhouse. Freehold Town house can further be categorized as totally Freehold and Freehold with a POTL fee.
Term POTL simply stands for Parcel Of Tied Land. Sometimes, builders come with such dwellings which have common element tied with the property. The property is freehold, but the common elements are tied to the property.
To maintain these areas, there is a small POTL fee associated with these units.
This fee is similar to the condo maintenance fee to be paid monthly to CEC, to maintain the common areas, such as:
1. Parks.
2. Visitors Parking
3. Street Maintenance
4. Garbage Removal
5. Fall Cleaning
6. Snow Removal.
7. Side Walks ..etc.
Does POTL increase with time?
This fee may increase with due course of time because of simply inflation and to upkeep the common elements updated.
These types of POTL townhouses are basically falls under freehold townhouses category, but are different from the typical condo townhouses. The condo Townhouses have more common elements areas, like concierge, Library, Spa, Swimming pools, Fitness center, Card Room, Billiards Room, Tennis Courts, Party Room, etc., and therefore have more fee.
To maintain all these common elements areas, condo corporation needs funds to maintain and run day to day activities and build reserve funds for future repairs. And it come from the monthly maintenance fee paid by the owners of the units.
In a POTL property, Structure itself is a freehold property, but the land is not and one need to pay maintenance fee for snow removal, parks or garbage collection etc. to name few.
As a buyer, one must know that this type of property is permanently “tied” to the land of the common elements condominium, meaning the property cannot be sold separately from its interest in the condo corporation
So when buying a POTL freehold townhouse, always check your needs, affordability and talk to professionals.
Can POTL Increase in the Future?
Yes, It can. Like any other condo townhouse or a high-rise condominium, over the period of time, it does increase, depending upon the needs of CEC, Common Elements Corporation. All condo corporations need funds to maintain the common areas. So it’s need-based.
To summarize, the POTL townhouse is a freehold property with a common element that is registered under the Condominium Act. Status certificate is always required whenever sales and purchase occurs.
That’s why it is very important to speak to your lawyer or a realtor who can assist better on this.
When and how can POTL can affect your monthly expenses
Buying a home in Canada in 2021
Also read
What is a CMHC fee?
What is a Probate Fee?
What are closing Costs?
What is down payment?
What is refinancing?
