POTL vs Common Elements Condo: Key Differences Explained

A real estate term that often confuses buyers is the Common Elements Condominium (CEC). At first glance, it might seem similar to a POTL, but there are key differences you should know when making a decision about your future home.

What is a Common Elements Condominium (CEC)?

A Common Elements Condominium (CEC) is a type of condo where you don’t own a specific unit, but rather, you own a freehold property that is legally tied to shared amenities. Think of it as a hybrid between freehold ownership and condominium-style maintenance. You typically own a townhouse or house, but the land it sits on, along with certain shared elements like roads, recreational facilities, and common areas, is collectively managed and maintained by a condo board.

In a CEC arrangement, owners have a stake in shared spaces, such as clubhouses, pools, gyms, parks, and other recreational amenities that are owned and maintained by the community. These shared areas are usually funded through monthly fees, making it a good choice if you enjoy the idea of owning a freehold home but still want the convenience of shared amenities without the full responsibilities of condo life.

The main advantage of a CEC is that it allows you to enjoy shared facilities while still retaining the benefits of owning your home and land outright. The monthly fees typically cover things like the maintenance of roads, snow removal, lawn care, and upkeep of shared amenities.

How is a CEC Different From a POTL?

While both Common Elements Condominiums (CEC) and Parcels of Tied Land (POTL) involve shared responsibilities, there are a few key differences when it comes to ownership, fees, and what’s included in those fees. Let’s break it down:

• Ownership Type:

  • CEC: Freehold home with shared condo amenities.

  • POTL: Freehold home with shared responsibilities.

• Fees Cover:

  • CEC: Shared recreational facilities, road maintenance, snow removal.

  • POTL: Road maintenance, snow removal, some shared elements.

• Typical Fees:

  • CEC: $100 - $400/month.

  • POTL: $50 - $200/month.

Example: A CEC in Action

Let’s say you decide to buy a home in a gated golf course community. You own your property outright, but the land and amenities—such as the golf course, walking trails, clubhouse, and roads—are all shared with other homeowners. Because these shared areas are vital to the community, all homeowners contribute to their upkeep through CEC fees.

These fees are typically higher than those for a POTL property because they cover not only maintenance for infrastructure (like roads and snow removal) but also for recreational facilities and common spaces, such as pools, gyms, and clubhouses. So if you love the idea of living in a community with ample recreational activities and shared spaces, a CEC could be a great choice for you.

How is a POTL Different?

A Parcel of Tied Land (POTL), on the other hand, focuses more on the maintenance of infrastructure rather than recreational amenities. You own a freehold home and land, but share responsibility for things like private road maintenance, snow removal, and garbage collection. POTL properties typically don’t include the shared amenities that a CEC does—like a clubhouse or pool. Instead, the shared costs are often related to things that keep the neighborhood running smoothly.

Because of this, POTL fees are generally lower than CEC fees. Since there are fewer amenities to maintain, your monthly fee for a POTL property might be anywhere from $50 to $200 depending on the location and size of the community.

Which One Should You Choose?

Choosing between a CEC and a POTL largely depends on your lifestyle preferences and budget. Here are some guidelines to help you decide:

• Choose a POTL property if:

  • You want a true freehold home where you have more control over your property.

  • You’re comfortable with lower fees and don’t mind not having shared recreational amenities.

  • You prefer a quieter, more self-contained neighborhood with fewer communal spaces.

• Choose a CEC property if:

  • You want to live in a planned community with shared amenities like a gym, clubhouse, golf course, or pool.

  • You’re willing to pay higher fees in exchange for the convenience of having these amenities managed for you.

  • You enjoy having a blend of freehold ownership and the benefits of condominium-style maintenance.

In short, POTLs are great for those who want a freehold property but don’t mind taking care of their own recreational needs, while CECs are better suited for people who enjoy community amenities but still want the freedom of owning their home outright.

Want to Learn More About Buying Your First Home?

Understanding real estate terms like POTL, CEC, and condo fees is just one piece of the puzzle when buying a home. If you’re a first-time homebuyer, you probably have more questions—and I’ve got answers!

Join me for my Free First-Time Homebuyer Seminar, where I’ll break down everything you need to know about buying your first home in Ottawa.

Sign up here: https://bit.ly/4jsSB9g

Buying a home doesn’t have to be confusing—let’s make it simple! Hope to see you there.

Maryam Ouach, REALTOR®

maryam@newpurveyors.com