After a 99-year lease expires on a condo, ownership of the property typically reverts to the original landowner or the government, leaving the unit holder with no remaining rights or compensation. The building may be demolished, or the lease can be renegotiated if the land is not needed for redevelopment. Value often becomes effectively zero as the lease nears its end.
Once the lease of the development run its course and expires, the land where the development sits on reverts to the government without any compensation. This happened a few years back with the row of houses at geylang and the owner's had to move out when date was due.
Concrete and steel structures often last 50 to 100 years, while wood-framed condos may need major repairs sooner. Environmental conditions, such as humidity, salt air, and extreme temperatures, also impact longevity.
The Life Cycle of a Condo
Aging buildings often face issues such as weakened foundations, outdated electrical and plumbing systems, and weather-related damage. These issues can lead to safety concerns if not addressed properly.
Under this model, residents do not purchase the land itself. Instead, they acquire a long-term leasehold right to occupy and use the property for a 99-year period. Crucially, when the leaseholder sells the property or passes it on to heirs, the lease does not diminish in remaining years.
The average cost of buying the freehold is around £8,500. This is based on the value of the house and a share of its marriage value. Your surveyor will take the current value of the property, the years left on the lease and the annual ground rent to calculate the premium.
The 90% rule in leasing is an accounting guideline for classifying leases, stating that if the present value (PV) of a lessee's minimum lease payments equals or exceeds 90% of the leased asset's fair market value (FMV), the lease should be treated as a finance lease (or capital lease) rather than an operating lease, reflecting essentially a purchase for accounting purposes. This rule helps determine if the lease transfers substantially all the risks and rewards of ownership, requiring balance sheet recognition of the asset and liability.
Many condos in Canada are over 30 years of age and have gone through a mature cycle of repairing and replacing some significant and costly common elements of their building. Based on this experience, much of the replacement or major (high-cost) repair work may not happen until a building is more than 20 years old.
It depends on your priorities, budget, and willingness to invest in maintenance and potential renovations. A 100-year-old house — or an even older house — isn't necessarily a dealbreaker. Many of these properties have been lovingly maintained and even updated with modern amenities while preserving their original charm.
Be aware of what years they are most prevalent in
Typically the issue regarding leaky condos was a crisis with buildings built between 1981/1982 and up until around 1998.
Restrictions on your use of the property could apply, for example, you may not be allowed to own pets, make certain alterations sublet your flat – and there are sometimes even restrictions on sharing your flat with another household .
The 99-year term originated as a practical common law choice — long enough to outlast any person involved in the lease, yet finite enough to eventually return control to the landowner or their heirs.
86 - 90 years remaining will make it difficult to sell
Many estate agents will tell you that attempting to sell a flat with a lease of 90 years or less is going to be difficult. This is because many buyers recognise that a lease with this number of years remaining may be something to be concerned about.
In 2025, the scales are tipping slightly in favor of condos, thanks to higher inventory and softer pricing—making them a potential win for today's buyers.
What's the five-year rule for selling a house? The five-year rule, as it's known in real estate, suggests that new homeowners generally should live in a home for at least five years before selling. While it's not a legal requirement, following this guideline helps reduce the risk of losing money on your investment.
Condos tend to appreciate steadily in value and offer a solid return on investment — but they come with their share of drawbacks too.
A critical drawback of condo investments lies in the absence of land ownership. Unlike traditional real estate, where land accompanies the property, condos solely represent airspace. This limitation can adversely affect the market value of condos, making them less desirable compared to properties with land ownership.
The "3-3-3 rule" in real estate isn't a single guideline but refers to different strategies: for buyers, it's about financial readiness (3 months savings, 3 months reserves, 3 property comparisons) or a financial affordability check (30% income, 30% down, 3x income); for agents, it's a marketing habit (call 3, note 3, share 3) or prospecting (talking to everyone within 3 feet). There's also a developer rule (1/3 land, 1/3 build, 1/3 profit), though it's considered outdated by some.
A "good" lease length depends on your needs: 1-year is standard for apartments (balancing stability and flexibility), while 2-3 years offers more stability, lower risk of annual rent hikes, and sometimes better deals, especially for cars where 36 months spreads fees well. For long-term property (like buying), a lease of 90+ years is ideal, as shorter leases (under 80 years) can devalue the property and make mortgages difficult.
The "1% lease rule" is a guideline in both real estate (rental income should be 1% of property cost) and auto leasing (monthly payment ideally under 1% of MSRP), used for quickly assessing potential deals, though it's a simplified benchmark that doesn't account for all expenses or market variations. In car leasing, a $40,000 car should ideally lease for around $400/month (before tax), while for real estate, a $200,000 home should aim for $2,000/month in rent.
If the lease meets any of the criteria, then it must be recorded as a finance lease. The five criteria relates to a bargain purchase option, transfer of ownership, net present value of lease payments, economic life, and whether the asset is specialized.