Interim Occupancy Closings in Ontario: What Buyers Need to Know

What Interim Occupancy Is

You get a letter from the builder: Interim Occupancy Closing Notice. There is no title transfer on it. There are no mortgage instructions. There is a date, and you are told to prepare to move in.

That is occupancy, not ownership. On a pre-construction condo in Ontario, the unit can be fit to live in before the building is a registered condominium. You get the keys. Your name is not on title. The lender does not advance. You pay occupancy fees until final closing, when the corporation is registered and you actually own the unit.

A Toronto real estate lawyer still has to close occupancy and, later, the title transfer. Keys are not ownership.

Two Closings

Resale possession and title happen on the same day. Pre-construction splits them.

Interim closing is when the unit is ready to occupy. You can move in. You are an occupant under the purchase agreement, not an owner under the Condominium Act. You cannot mortgage the unit. You cannot list it. You do not vote at owners' meetings.

Final closing is later, sometimes months later, when the whole building is registered and title can transfer. That is when the mortgage funds, land transfer tax is paid, and occupancy fees stop. Both signings are usually remote.

How Long It Lasts

A few months for some buyers. A year or more for others, especially higher floors in a large building. The agreement has a target. The actual length is how long the builder takes to finish the common elements, pass inspections, and register the corporation at the land registry. Your unit can be done while the lobby, elevators, or garage are not. Registration waits on the building, not on your suite.

What the Occupancy Fee Is

The monthly fee has three parts: interest on the unpaid purchase price, estimated property taxes, and estimated common expenses. The interest is not your mortgage rate. It is the prescribed Bank of Canada conventional rate in the agreement. The builder is not allowed to profit on the fee.

It does not reduce the price. It is not held as a deposit. It does not build equity. People call it phantom rent because that is how it spends. Your original deposits still come off the price at final closing. These monthly payments do not. Budget them as a carrying cost, separate from legal fees.

Renting, Assigning, HST

Most builder agreements forbid renting or assigning during occupancy without written consent. Doing it anyway can be a breach. Even with consent, renting can cost you the new-housing HST rebate if the unit was supposed to be your primary residence. Read the agreement before you list it on a rental site.

When Occupancy Ends

Occupancy ends when the condominium is registered and final closing completes. The lawyer gets the final closing notice, searches title, and coordinates the lender. You pay the balance of the price. The transfer and the mortgage register. Estimated taxes and common expenses paid during occupancy are reconciled on the statement of adjustments.

After that you are the owner. Occupancy fees stop. Condo fees start, paid to the corporation. The mortgage starts. You can sell, refinance, or vote. That is the actual closing, not the day you got the keys. The rest of a residential file still follows the ordinary closing process.

Frequently Asked Questions (FAQ)