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Home > Pre-Construction Buying Guide > Pre-Occupancy Period

Pre-Occupancy Period

You are now one step closer to owning your pre-construction condo. In the GTA, the property market is bustling, with the average price for a condo hitting around $686,000 as of mid-2022. But whether you’re a seasoned investor or a first-time buyer, the dual stages of Interim Occupancy and Final Closing can feel like a maze if you’re not prepared.

What Is Interim Occupancy?

As your condo nears its completion date, you’ll be notified about your Interim Closing Date, marking a significant milestone on the road to living in your new home. During this phase, your lawyer will receive what’s known as the Interim Statement of Adjustments. This is where paperwork comes into play, but worry not—this step is usually quick and often takes just about 15 minutes. Interim Occupancy periods can last from two months up to two years.

The Catch: Interim Occupancy Explained

There’s a vital point to remember during this period: your condo is deemed safe to live in by the city, but it’s not officially registered yet. That means you can move in and reside there, but the title of the property is still with the developer. This arrangement serves a practical purpose. It allows for a streamlined process for potentially hundreds of move-ins while giving the developer time to complete any final touches on other units and common areas.

Warranty Protection During Interim Occupancy

One of the benefits during this phase is your TARION warranty begins, which is protection for new homebuyers in Ontario. It’s crucial that you fill out your warranty form within the first 30 days of occupancy. Note that the warranty for the building’s common elements doesn’t begin until the condo is officially registered.

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Occupancy Fees: What Are They?

While you’re living in your new condo but haven’t yet received the title, occupancy fees come into play. The term might sound a bit mysterious, but in essence, they are quite straightforward. These fees include taxes, estimated condo fees, and interest on the balance of the purchase price. Importantly, these aren’t fees that builders use to turn a profit. They’re regulated by the Condominium Act, ensuring that the charges are fair and reasonable.

Components of Occupancy Fees:

  • Taxes: A portion of your occupancy fee will cover the municipal property taxes, based on your share of the building.
  • Estimated Condo Fees: Your contribution to the building’s common elements and services like garbage collection, security, and maintenance.
  • Interest on Balance: Calculated on the unpaid balance of the purchase price of your condo.

Occupancy fees are temporary charges that cease once you reach the Final Closing stage, at which point you officially become the property owner. It’s worth noting that while you are paying to live in the condo, these payments do not contribute to your mortgage or build equity in your home.

Final Closing: The End of the Journey

The Final Closing happens once the building is officially registered and the title of your unit transfers from the developer to you. This is the point at which you become the official owner, and it concludes the two-stage process of buying a pre-construction condo in the GTA. 

Read more about it in the last part of our pre-construction guide.