What is a Fee-Simple Rowhouse?

As a result of the recent passing of Art Cowie, and many references to his efforts to promote 'fee-simple rowhousing' a number of people have asked me to define this term. The following is a brief explanation, along with a story I found on-line about a project in Chicago.

Fee simple is a legal phrase that indicates the highest form of property ownership. 'Fee' comes from the word fiefdom, which means the legal rights in land. 'Simple' in this case, means without constraints. So, fee-simple ownership of property means the absolute and unqualified legal title to the land and any permanent buildings on it; no one else has any claim to the property at all. It is the most common form of ownership.

Almost all new rowhouses sold in British Columbia are NOT fee-simple. Instead, they are strata-titled, and the purchasers are members of a condominium association. This is because while they own most of their unit outright, the exterior walls, grounds, parking and driveways are usually owned in common.

There are exceptions. Thirty years ago, a number of fee-simple rowhouse developments were built in Burnaby and Coquitlam. They are still around. More recently, Parklane Homes, which has been interested in this form of housing for a number of years, built a 'fee-simple' rowhouse development in Langley known as Bedford Landing. Since the homes had a shared wall, there was a Party Wall Agreement. Since some of the pipes connecting to water and sewer crossed over different properties, there was a Services Easement Agreement.

To prevent someone from painting his or her portion of the row of housing bright yellow, there were also Design Guidelines registered on title. I compliment Ben Taddai of Parklane for his creativity and persistence in following through on this project.

Aragon Homes, another innovative development company, also built a fee simple rowhouse development as part of its Port Royal development in Queensborough, New Westminster. While I haven't checked the title, I assume that there were similar agreements in place there as well.

There are a few reasons why we have not seen more fee-simple row house developments. Firstly, they cost more than a conventional rowhouse complex. Instead of one hook-up to sewer and water, there are many. There are also additional costs associated with the party wall construction. Another key reason is their legality. In order for such developments to succeed, the party wall agreement needs to run with the land in perpetuity. The City of Vancouver and other jurisdictions have taken the position that this is not currently possible under current Land Title Act legislation.

As a result, Councillor Suzanne Anton, a proponent of innovative housing, and a longtime friend of Art Cowie is trying to get the province to amend this legislation to make it easier to build such housing in the future. When the Act is amended, she hopes it will be known as 'Cowie's Bill'.

The following is excerpted from a Chicagoan's experience living in a fee-simple townhouse complex. It is interesting in that notwithstanding the advantages of not being part of a legal association, his complex decided to create an association! Read on...

In a fee-simple rowhouse or townhouse, there is nothing that is owned by the association. The owners own their roof, their windows, the land under and around their townhouse. That means the individual owners are responsible for taking care of any lawn, painting the outside, fixing leaks in the roof, and shoveling the snow.

In my case, I live in a courtyard townhouse. There are two rows of homes with a beautiful little courtyard filled with trees and flowers (or mounds of snow) between them. A sidewalk runs down the exact middle. Only the end units face the street. I own, and am responsible for, the part of the courtyard that extends from my front door to the middle of the sidewalk. I have to pay for and plant the flowers. I have to cut my grass. I have to clean my gutters. I have to rake the leaves that fall on my bit of grass.

The only thing that I share with anyone are the walls dividing my home from the homes on either side of mine. If something were to poke a hole in either of those walls, both my neighbor and I would have to pay to have it fixed. If the damage is just on my side of the wall…it’s my problem.

Luckily, this complex of townhouses decided that it was nuts for each person to mow their own 10 foot x 10 foot bit of grass, shovel half of the side walk, and clean only their gutters. About 20 years ago, well before I bought here, they formed a loose association. We all pay a very small assessment so we can hire someone to do all these odd jobs that impact all of us. In our case, the association owns nothing. It just exists to buy services that all of us need and benefit from. This is why I was at the meeting last night—looking at expenses.

What Are The Pros & Cons of a Fee-Simple Townhouse?

The first pro you will notice is that there are no assessments. This, in my opinion, is a very big advantage. It means that you can pay more for the home. When you are looking to buy and you know you can spend $1,000 a month, that whole $1,000 can go toward your mortgage. None of your monthly payment is going toward an assessment. The added benefit is that all of the interest on a mortgage payment is tax deductible where an assessment payment is not.

The other pro that springs to my mind is the feeling of independence you have versus a standard condo. You don’t have to worry about what the neighbors think; they can’t make a rule about the size of your dog or how you empty your garbage.

The cons are just the other side of the same coin: you can’t control your neighbors in any way. So, if your next door neighbor—the person you share one wall with—decides to paint their house black with lime green accents, there’s not a thing you can do. If they decide to dig up their bit of grass and replace it with a spongy-floored play area for their kids, your hands are tied.

Geller's Note: Well, not exactly. As I noted above it is possible to put in place Design Guidelines to help control the aesthetics of the complex. For this and other reasons, while this housing form and tenue may not be for everyone, it might well serve those who don't want to live in a conventional single family home, or a 'shared ownership' rowhouse complex.