When you purchase a pre-construction condominium you’ll be given two different dates: the interim occupancy date and the closing date. Interim occupancy is unique to pre-construction condos, and the process may be foreign to some, especially first-time homebuyers. Here’s your comprehensive guide on what to expect.
What is Interim Occupancy?
Interim occupancy is the period of time between the day you occupy your unit (move in) and the day you take ownership (close). One of the reasons for interim occupancy is to allow the builder to focus on the sold suites and some of the common elements before the building is registered.
Interim occupancy takes place as soon as the city deems the building is safe and ready for homeowners to move in. Typically this can last between three to eighteen months, depending on the project. The building is still under construction during this time, but homeowners are required to occupy their units. Keep in mind that whether you choose to choose to live in your suite at this time is up to you; however, all purchasers must pay a monthly fee during this time. It’s important to note that the occupancy fees are not credited to the final purchase price. They are equivalent to rent payments, as homeowners do not legally own their suites yet. Because of this, mortgages cannot be secured and renting your suite is not permitted.
Final closing occurs once construction is complete and the developer is ready to register the condominium. Ownership is now transferred to the individual unit purchasers, and interim occupancy now ends. Homeowners are now able to secure a mortgage, rent or sell their suite; property management will also take over at this time.
What Are My Occupancy Fees Paying For?
The monthly fees charged by the builder during interim occupancy include interest on the unpaid balance of your suite, contribution fees for common elements (not unlike maintenance fees) and estimated property taxes. For more details, refer to Section 80(4) of the Condo Act.
What Are the Developer’s Responsibilities During Interim Occupancy?
During the interim occupancy period, the builder has a number of regulations that must be adhered to. This includes providing the services that the condo corporation will take over once the building has been registered, such as garbage disposal, concierge services (where applicable), property maintenance (HVAC, fire alarms, etc.). To view the full list of the builder rights and responsibilities, check out section 80(6) of the Condo Act.
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