NEVER Buy These Types Of Townhouses

追加: 2026-05-30

[00:00:00]I know a couple who bought a townhouse in Atobico 2 years ago for $789,000.

[00:00:06]This was a young family with two kids and they finally wanted a house with some outdoor space, something that felt like a family home that they can live in for years to come. What they bought was a stacked townhouse. So, from the outside, from the listing photos, and from the first visit, it looked exactly like a real townhouse. It had a front door, a small patio, two floors of living space, everything they wanted after living in a condo building. But 6 months in, their monthly fee went up significantly. Their neighbors are constantly knocking on the door saying they can hear the kids playing and stomping on the floor. Not their fault, but what can you do? And every morning, they hear their own neighbors getting ready for work. They hear the footsteps, drawers opening and closing, and the shower running. They called me this year. I met them for the first time and they told me we didn't know we were buying another condo. We thought we were done with the whole condo living thing.

[00:01:01]And they're not alone. The truth is the word townhouse can mean so many different things here in the GTA that it frankly covers numerous different property types that all look very similar on the surface, but all carry completely different risks underneath.

[00:01:18]And if nobody walks you through these differences before you sign, you'll find out the hard way afterwards, but you're going to feel it one way or another. So that's why I made this video so that you can avoid making these same mistakes. So the first type of townhouse not to buy is a preconstruction from under capitalized developers. In 2024, about 2,800 units were cancelled across the Greater Toronto and Hamilton area. In 2025, a record 7,200 more were scrapped, more than double the year before. Buyers put deposits on these homes years ago, and they waited, right? They planned their lives around it. We're going to get the keys. We're going to move in.

[00:01:59]We're going to send our kids to the school. And then they got a letter in the mail saying that the project was completely dead. State View Homes is the biggest example. There were eight town home projects in the GTA placed into receiverhip amid allegations of a $37 million fraud scheme. Nobody knew about that upon signing. Hundreds of buyers were stuck in legal limbo. And in Richmond Hill, King Development Inc.

[00:02:25]collapsed in 2024, owing $22.5 million to creditors and investors. And it's the same story every single time. I had a client whose Bmpton town home project got cancelled after three years under contract. She had said no to other homes during that time. If she had known this was going to happen, she could have prepared. It was a firsttime buyer with a young daughter who had to start completely over in a market that was very different than it was back then when she signed. So, that conversation that she and I had is a big reason for me making this video right now. So before I let any clients sign off on a pre-construction, I check three main things, right? First, has this developer actually finished and handed over homes?

[00:03:12]So not just started them, but finished them with real people living inside. By the way, you can verify this on the HC Ontario builder directory. The second is, is this developer using their own money or are they counting on the deposit to stay alive? And lastly, how is your deposit protected? So remember, always have a lawyer review everything before you sign off on anything. The second type of townhouse not to buy is preconstruction with a closing cost risk. Townhouse prices are down about 20 to 25% from their 2022 peak. And buyers who signed back then are now closing on homes worth significantly less than what they agreed to pay. So, you signed for $950,000, but the bank values the home at $720,000 today. The bank lends based on that number. That $230,000 gap is your problem as a buyer. If you can't close, the developer keeps your deposit and in some cases can sue you for even more. I sat with a couple exactly in that position, right? The bank valued their home at $180,000 less than what they owed. They had two options. You find the money or you walk away and lose everything that you paid.

[00:04:31]And even if you walk away from your deposit, they can still sue you for other damages. The third type of townhouse to avoid, and let's move off of preconstruction for now, is a stacked townhouse. So, like I mentioned at the beginning of the video, that was a couple dealing with a stacked townhouse.

[00:04:49]And I want to quickly mention here, I don't think that every stack townhouse is bad, but it is something you have to be careful with for sure. Stack town houses look like town houses from the outside, but legally they are condominiums still. So, you pay condo fees. You have a condo board. How well or poorly that board runs things will directly affect your life and your wallet. One Toronto stack townhouse condo had a board that ignored repairs for years and then drained the reserve fund for what should have been just regular daily operating costs. And the reserve fund exists for big repairs, right? Roofs, parking structures, waterproofing. And by the time that the owners found out what was happening, the parking garage was basically deteriorating and a special assessment landed on everyone's doorstep. So before you sign, listen for noise to assess the construction quality for proper sound insulation. Get it inspected thoroughly.

[00:05:54]Get the full reserve fund study, not just a summary. And also review the fee history. If fees have climbed fast with no clear explanation, then something is definitely being managed poorly. The fourth type of townhouse to avoid is a condo townhouse. The wrong condo townhouse, obviously. So, a condo townhouse looks like a regular one, but it is registered as a condominium just like a stack town. So, you own your unit, but everything else, so the exterior, the roof, the driveway, all of that is shared. and the condo corporation decides what gets spent on it. Very low condo fees are also a red flag by the way, not just high ones. It means the reserve fund is probably being underfunded to keep the monthly number attractive. And in that same vein, the next type is what we call a podal. Potal stands for parcel of tide land. So this one trips people up more than almost anything else because it actually does feel like owning a house. So, you own the land that your unit sits on. The condo board is not the same as for a condo building or for a condo or stacked townhouse. They're not involved in any day-to-day operations. But what buyers don't understand usually is that the laneways, private roads, visitor parking, and the common areas like parks for example, they are owned by a shared corporation. and that corporation can still levy costs against every unit owner if something needs to be repaired.

[00:07:29]So, while these maintenance fees are a lot lower, usually in the $1 to $200 range, but sometimes $300 or $400 plus as well, they're still at the risk of going up in the coming years. I had a client, for example, who bought a portal in Milton. 2 years in, they got a $12,000 bill for laneway repairs that this corporation had been putting off for a few years, and it was due within 90 days for a road he drove on every day without ever thinking about who even owns it. And one more thing that people don't realize, lenders treat total fees exactly like condo fees. So they get factored into your debt ratios, meaning that your qualification will change depending on how much that fee is. So if $150 a month sounds like nothing, it still reduces how much mortgage you can actually qualify for. So before you buy a portal, find out exactly what the shared corporation is responsible for and what the reserve looks like for those shared elements. The next type of townhouse to avoid is ones in locations with chronically high inventory. So, what I want to talk about here is not actually the type of home, it's where you buy it. I'll give you a few examples. So, sellers in Burlington's Freeman neighborhood, Milton's Neielen district, North York's Flemington Park and Yorkdale areas, and also Milton's Timberly, I'll mention they're struggling to find buyers. Some homes are sitting 65 to over a 100 days and some wait for 3 months before a single offer comes in, even if they're priced decently well. So that means demand is not keeping up with supply. Usually a combination of over supply from investorheavy preconstruction waves, maybe limited transit or limited walkability. All of these can be factors that lead to your townhouse not holding its value in any given area. Last year, I showed a townhouse in one of these areas to a client. It had a pretty fair price, I would say, but I showed him how long similar homes had been sitting there and what they actually sold for.

[00:09:38]And I asked him like, if you need to sell this in 2 years, how long are you willing to wait? And he ended up buying somewhere else for that reason. So, from everything that we just spoke about, what's the solution for all this?

[00:09:51]Because if these are town homes not to buy, then what should you actually look for when you want to get something good and worthwhile? Well, the best option in the GTA right now, if your budget allows it, is a true freehole townhouse in an area with strong demand. So, you own the land. You have no monthly fees. There's no condo board. There's no surprise bills in the mail. You build more equity. You build it quicker. And you have more control over your space. both inside and out. If Freehold is completely outside your budget, it doesn't mean don't buy a townhouse, but don't go for the cheapest condo townhouse. You want to look for the best run one. So, get the status certificate.

[00:10:34]Have a real estate lawyer go through it.

[00:10:36]Look for a healthy reserve fund, right?

[00:10:38]No pending litigation. Look for a fee history that hasn't been spiking without explanation. Those three things alone will basically filter out the majority of all the bad ones for you. And if you want to go on a deeper dive on town houses, so what the difference is and all the different types out there, how to find the best one, and all the red flags to avoid at all costs, watch the townhouse buying guide on the screen right now. I made it specifically for buyers who want to get into this market informed. But thanks for watching. My name is Elon. Always remember, the right neighborhood changes everything. And as always, I'll see you in the next one.