If you’re a first-time homebuyer in the Canadian real estate market, the term “interim occupancy” may be unfamiliar to you. The world of pre construction condos comes with its own language, but fear not – we’re here to break it down for you.
Interim occupancy is the time when you get the keys to your unit before you officially own the property, which is called final closing. This phase is unique to pre construction condos and deserves your attention. It’s like the final step before officially becoming a condo owner, but there’s more to it.
When the developer confirms the interim occupancy date, your lawyer will receive an “Interim Statement of Adjustments”. This is when you can move in, even if not all units are ready. Builders usually allow occupancy in stages, starting from lower floors. During this period, it’s important to note that you are not yet the legal owner. Ownership will only be transferred once the building registration is complete.
On average, interim occupancy lasts between 3-6 months, but the actual duration varies. Lower floors generally mean longer occupancy, while higher floors enjoy a shorter period. Consider reputable builders to ensure smoother experiences. The builder’s reputation has an impact on the process.
To rent during this period, you need written permission from the builder. Before construction begins, be sure to talk to the owners about your rental plans. Remember, they are the legal owners of the unit until the final closing. Note that renting might affect certain rebates and legal aspects.
Unlike mortgage payments, you don’t pay a mortgage during interim occupancy. Instead, you pay monthly “interim occupancy fees“. These fees include the remaining balance, estimated taxes, and projected common expenses. Your actual mortgage payments start only after final closing.
Interim occupancy fees consist of interest on the amount due, estimated taxes, and shared expenses. Remember, these fees go towards the builder’s costs and are similar to rent payments. They aren’t deducted from the final purchase price.
Interim occupancy is the gap between moving in and full ownership. Final closing marks the completion of construction and property ownership transfer. During final closing, you can secure a mortgage, sell, or rent your unit.
Interim occupancy might seem complex, but it’s a crucial step when purchasing pre constructions condos. Understanding how it works helps you confidently navigate this phase. It also helps you make informed decisions as you become a condo owner.