As urban spaces become more crowded and expensive, alternative property ownership models have become more and more popular. One of those options is called divided co-ownership. In this piece, we’ll be discussing what that means, as well as comparing two different syndicate types: horizontal and vertical.
What is divided co-ownership?
Divided co-ownership is a legal arrangement that allows multiple individuals or entities to own units in a property, along with a share of the common area. This allows people to enjoy the benefits of property ownership while reducing individual costs and responsibilities.
One common example is condo buildings, where individual condo owners have both unit ownership and shared ownership of the common areas, like the lobby and the roof. Another example is multiplexes, which often share yard space, outdoor staircases, and more.
The structure of a divided co-ownership is defined by a syndicate, of which there are two main types.
What is a vertical syndicate?
In a vertical syndicate, each owner has exclusive ownership rights to their unit or portion of the property. Shared spaces such as common areas, parking lots, and gardens are collectively managed and maintained by the owners through a homeowner’s association.
What is a horizontal syndicate?
Horizontal syndicates are most commonly found in multi-phase condo towers. Let’s say a developer builds a project in three phases: phase one has the indoor pool and spa, phase two has the rooftop barbecue area, and phase three has the gym and party room. Beyond this, all buildings share the underground parking.
In cases like this, the vertical syndicate will focus on the budget and management that are specific to the amenities built into that tower. The horizontal syndicate will focus on the budget and management of the shared areas.
The bottom line
Both horizontal and vertical syndicates play an important role in the overall health and maintenance of a building. As always, it’s essential to understand the rules, regulations, and financial commitments associated with the appropriate syndicates when evaluating a condo project.
Are you planning to enter a condo syndicate and want to run a few things by us? Our lines are always open. Contact us with any questions you may have and we’ll get back to you with answers shortly.