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When buying a house, do you own the land it's built on?

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January 2, 2018 - Karl Yeh

"A lot of it depends on the actual style or type of home that you are buying. What we refer to as single family homes, or a move-up estate, bare land homes is the technical breakdown of it ... basically saying you own the land, Crown Land, [00:01:00] pin-to-pin and the house and property that sits on top of it."

When buying a home (new or resale) do you wonder if you own the land the house is sitting on? In this episode, we discuss if you also own the land of the house you just purchased. We also look at how the land is owned when buying a duplex or condo and what happens to the land when selling your home. 

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Hello and welcome to another edition of Homebuyer's School. I'm Karl Yeh. This is Cory McDonald, community manager with Brookfield Residential.

Today, the question that we're going to answer is about lots:

When buying a house, am I also buying the lot/land it sits on?

Karl Yeh:

When I'm buying a house, whether it's a new one or a resale, is, am I buying the house? [00:00:30] Does the lot include-

Cory McDonald:                  -and the land that it sits on?

Karl Yeh:                                 

Yeah, is that mine, too? Is that a complete different buy? How does that affect the purchase?

Cory McDonald:                 

Really good question.

A lot of it depends on the actual style or type of home that you are buying.

What we refer to as single family homes, or a move-up estate, bare land homes is the technical breakdown of it ... basically saying you own the land, Crown Land, [00:01:00] pin-to-pin and the house and property that sits on top of it.

Karl Yeh:                                   When you say pin-to-pin what do you mean?

Cory McDonald:                 

Because Canada ... I can't really explain the technical terms of how we're still connected to Great Britain, but basically ... the land that you own, you pay property taxes on it.

You can modify it, you can add trees, you can do your own landscaping if you'd like.

You strike oil on your land, [00:01:30] you don't own that oil.

Karl Yeh:                                Darn it.

Cory McDonald:                  That is owned by Crown Land. That basically is

Karl Yeh:                                  

Because I've been trying to dig ... every single home I've ever owned, I've tried to dig ... which is none ... But my first thing is, I gotta dig for oil.

Cory McDonald:                 

Everybody's waiting to become the next Beverly Hillbillies.

So, basically, with the purchase of a single family home, you are buying the land and the property, the house that it's being built on top of, as well.

Compared to, say, a condo, or a townhome, where, [00:02:00] depending on how they redistribute the land itself, you may only own drywall to drywall.

Either the condo association or, in very rare circumstances, a private company would own the land and you just own the property inside the building.

It really does depend on the type of house that you're buying.

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Karl Yeh:                                  

Yeah. Okay. If I was gonna buy, let's say, a multi-family condominium, [00:02:30] that land's not mine.

Cory McDonald:                  Correct.

Karl Yeh:                                  

Let's say we're talking a little bit about condos. That condo fee that I'd eventually have to pay, does that go into the land itself or nothin ...

Cory McDonald:                 

No, again, that's essentially why you are paying condo fees, is because you don't own the land on the outside. So, whoever is taking care ... the condo association-

Karl Yeh:                                   Oh, okay.

Cory McDonald:                 

Or, in rare circumstances, that private company, they have to maintain the exterior, because that's [00:03:00] their responsibility.

Those condo fees does go into contributing to pay for those costs, though. So, snow removal, the landscaping, insurance as well as maintenance on the exterior of the home and a lot of the times, those condo fees will cover a reserve fund.

Later on down the road, if there needs to be major repairs on the outside of the home, then, it's coming out of the reserve fund. It's not instantly coming out of everybody else's pockets.

That's why the difference between a townhome or a condo, you are paying [00:03:30] those condo fees to take care of that.

Whereas with a single family home, you own the land, so you're responsible for mowing your own grass and shoveling your own snow and repairing any damage to siding. That's the difference between those there as well.

Karl Yeh:                                  

When we're talking about single family homes, that's ... they're one home on the lot. Can you tell me a little bit about,

If you have a duplex, who owns the land?

Cory McDonald:                 

Great question.

Most duplexes are set up still as single family [00:04:00] or bare land homes.

Basically that property line is an imaginary line that splits the house in half.

It's built as two houses and they do have a little bit of a connection in the middle with the exterior of the home.

But that imaginary line would split it in the middle.

Karl Yeh:                                You still own that land.

Cory McDonald:                  You still own that land-

Karl Yeh:                                On that side.

Cory McDonald:                 


As far as fencing, you can still do a fence on your property, even if your neighbor doesn't want to.

But you can still do [00:04:30] a fence on the property line, because it is split down the middle.

Karl Yeh:                                  

I've seen those awkward places where you have a duplex and you have one side that's really well kept and the other side's a little run down, but it really doesn't matter, because that person owns that land and that house at the same time.

Cory McDonald:                 

100%. Unfortunately, unless you're in a specific neighborhood.

A lot of gated communities, they will, in that purchase agreement, they'll state you have to keep the outside of the home [00:05:00] at some form of maintained exterior.

A lot of the times, if it isn't in one of those specific neighborhoods, all you can do is just knock on your neighbor's door and ask them to take batter care of their stuff.

No used car parts in the front lawn. Something like that.

How does land ownership work when selling your house?

Karl Yeh:                                  

When we go into selling our property ... especially ... that's one of the things that you think about when you buy a house, eventually, you're gonna sell.

Does the ... I'm sure the price obviously is tied to the lot and [00:05:30] the land, with the house and the lot at the same time.

When you are ready to sell:

  • How do you go about calculating that price?
  • Do you include the lot with it?
  • Is there a separate price for the lot and the house?
  • Or it's kind of combined?

Cory McDonald:                 

No, there's definitely going to be a difference between a 40-foot wide lot on a corner overlooking a scenic view, versus something in the middle of a [00:06:00] ... staring [crosstalk 00:06:01].

A lot of the times, especially with resale, you will see a difference in price.

Depending on, is it a corner lot? Does it even have the orientation, North and South facing, because, here in Calgary, where the sun is primarily South a lot of the times, a lot of people will want to have that South or West facing backyard.

If you're spending time on the patio or in your backyard, you're getting a lot of that sunlight in the afternoons and evenings, when typically most people are outside.

If you're right beside a sewage plant, that could have a negative effect [00:06:30] on the lot specifically.

Even with a brand new build, there will be assessed premiums on those lots, depending on certain-

Karl Yeh:                               Location.

Cory McDonald:                  Location. 100%.

Karl Yeh:                                  

I guess I'm going back to the selling part. Let's say your house is pristine but kind of messed up the lot itself. It impacts the entire-

Cory McDonald:                 

It could 100% negatively impact the resale value [crosstalk 00:06:59].

Karl Yeh:                                  

Used car parts around, [00:07:00] but your house looks amazing. It's still gonna impact ...

Cory McDonald:                 


Unless we get back in Calgary about four years ago when the market was crazy and it didn't really matter because everyone was buying anything that was on the market, it's a lot more of a level market right now.

If your home is disheveled, then it's gonna have a disheveled price associated with it.

If you're going to resell, a lot of realtors will have a look at the home. They'll come and do an assessment.

A lot of the good realtors you're talking [00:07:30] to will give you tips on how to make it more sellable or how to get the best value out of your resale on the home.

Karl Yeh:                                That was great information today. Thank you very much.

Cory McDonald:                  Absolutely.

Karl Yeh:                               That's our show for the day. Until next time.


Your turn:

Let us know if you have additional homebuying questions that we can answer by submitting them in the comment section below. 

Homebuyer's School publishes new content weekly so subscribe or check back regularly for the latest information, strategies and tips from homebuying experts. 

About Cory McDonald:

Cory McDonald has been working for Brookfield Residential for over 5 years and has had the opportunity to sell  in several beautiful communities around Calgary and Cochrane. He has experience selling everything from starter town-homes to move-up homes within the company. Cory originally grew up in Calgary and after a short stint living in the greater Vancouver area, he returned home for a better quality of life to raise his family.

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