Lately, several sellers in Richmond Hill have asked me why their townhouses with POTL fees aren’t attracting much interest. It’s a trend I’ve been noticing since last year. Today’s buyers are more cautious, and with so many options on the market, properties that were once considered more affordable and sold quickly are now met with hesitation, especially when additional monthly costs are involved.

Just a short drive south of Richmond Hill, I recently helped a client sell a townhouse in North York, and we closed the sale not long ago. It was a three-storey freehold with a POTL fee, and one of its standout features was a much larger backyard compared to neighboring units, a big plus for families looking for more outdoor space. But despite that advantage, many buyers walked away once they saw the fee structure and higher property taxes. Some were even confused, assuming it was a traditional freehold, only to be surprised when a status certificate was required, just like with a condo townhouse. That single document sparked a lot of hesitation. Buyers started to question: is this truly a freehold, or is it a condo townhouse in disguise?

Naturally, some also wonder why POTL fee townhouses exist in the first place. The main reason has to do with how land and infrastructure are managed. In certain developments, the city doesn’t take responsibility for privately built roads, laneways, or shared driveways. Since the municipality won’t maintain or service these areas, developers set up a common elements condominium corporation to handle them. That’s where the POTL fee comes in. It covers maintenance costs like snow removal, landscaping, and road repairs for these shared spaces. Legally, each homeowner owns their individual lot, but they also hold a small share of the common property, which is why there’s a monthly fee and a status certificate, similar to a condo. It’s a practical setup, but for some buyers, it adds a layer of complexity they weren’t expecting.

It’s easy to see why buyers are cautious. In today’s market, everyone is paying closer attention to total monthly costs. Mortgage rates are still high, and any additional expense, even $150 or $200 per month, can feel like a deal-breaker. For POTL townhouses, that fee usually covers shared private roads, snow removal, or common areas. It's not unreasonable, but for buyers trying to stretch their budget, it's just one more thing to think about.

A few years ago, many investors were eager to buy POTL townhouses because they were slightly cheaper than traditional freeholds, yet still generated comparable rental income. The numbers worked, and for a time, it seemed like a smart investment. These properties offered a similar tenant profile and rental rates, but at a lower upfront price. However, the investment landscape has shifted. Today’s investors are far more prudent. They carefully run the numbers, factor in every recurring cost, and compare returns against safer or more straightforward alternatives. One of the key differences now is that POTL fees, covering services like snow removal, landscaping, and maintenance of shared laneways, cut into profit margins. For traditional freehold townhouses, owners typically pass outdoor maintenance responsibilities to tenants, making those costs negligible in the ROI calculation. But with POTL properties, those shared service fees are unavoidable and must be paid regardless of tenancy. This added cost burden makes the return on investment less appealing, and as a result, the once-active segment of small-scale investors has pulled back. Without their presence, demand for these types of properties has noticeably softened. 

There’s also the question of perception. Freehold townhouses with POTL are legally freehold, but because they share elements like laneways or visitor parking, they require a status certificate. That makes them feel a little closer to condo townhouses in structure, even if the ownership is different. Buyers expecting a traditional freehold can get spooked when they see a setup that includes shared management or fees, even if the difference is mostly technical.

All this doesn’t mean these townhouses can’t sell, they absolutely can. But in this market, everything comes down to positioning and clarity. When buyers understand exactly what they’re getting, what the fees cover, and how the value compares to other options, they’re more likely to move forward. And when sellers know who they’re marketing to, not just families, but also cautious buyers who want clarity and value, it becomes easier to navigate the sale.

Right now, in Richmond Hill and nearby areas, townhouses with POTL fees need not only the right price, but also more explanation, and a bit more patience. The right buyer is out there, but they’re asking more questions, comparing more details, and taking longer to decide. It’s our job to make sure they have all the information they need to feel confident moving forward.