Pre‑Construction Condo Closing: Legal Considerations

Two Closings, Not One

A pre-construction condo in Ontario does not close like a resale. You sign the builder's Agreement of Purchase and Sale years before you own anything. Then there are two closings: occupancy, when you get the keys and still do not have title, and final closing, when the condominium corporation is registered and your name goes on title.

The builder wrote the agreement. The 10-day cooling-off is the off-ramp. Occupancy fees are not a mortgage. Land transfer tax and the mortgage wait for final closing. A resale status certificate is the wrong document for this file.

The 10-Day Cooling-Off

On a new condo, you have 10 days to rescind after you receive the fully signed agreement, the disclosure statement, and Ontario's Residential Condominium Buyers' Guide. That clock is the Condominium Act, not a courtesy. Use it. After it expires, you are in a builder contract that lets the vendor change finishes, delay occupancy, and pass through levies the disclosure did not itemize as a hard cap.

A Toronto real estate lawyer reads the agreement you actually signed in those 10 days: deposit schedule, occupancy date language, assignment consent, HST and rebate wording, and what the builder can charge as an adjustment. Walking away in the 10 days is how you avoid a file. "Negotiating the APS" after the fact is not the usual path. The form is the builder's.

Deposits go in trust. They are not rent. They come off the price at final closing. Occupancy fees do not.

Builder deposits also have Tarion protection and a 10-day cooling-off that resale does not. The resale deposit rules are in real estate deposits in Ontario.

Occupancy Is Not Ownership

When the city issues an occupancy permit, the unit is fit to live in. It is not 100% finished, and the building is not a registered condominium. You may move in. You do not own it. The corporation does not exist yet. Your lender does not advance the mortgage. That stretch is interim occupancy. Tarion's condo occupancy guide puts it the same way: occupancy is not title.

The monthly occupancy fee is set by the Act. It is interest on the unpaid purchase price, estimated property taxes, and estimated common expenses. The builder is not allowed to profit on it. It is not credited to the price. It does not build equity. People call it phantom rent because that is how it spends.

You still have to insure the unit, follow the building rules, and pay on time. Renting it out during occupancy is only if the agreement says so. The pre-delivery inspection is where you list deficiencies before you take the keys. Tarion warranty coverage on the unit runs from occupancy; common-element coverage waits for registration.

Final Closing: Title, Mortgage, Tax

Final closing happens after the builder registers the condominium. You get a notice of the final closing date. Time is short. The lawyer searches title, reviews the statement of adjustments, arranges title insurance, and coordinates the lender. The balance of the price is paid. The transfer and the mortgage register. Occupancy fees stop. Condo fees and the mortgage start.

Land transfer tax is calculated on final closing, on the value of the consideration, not on the occupancy date. HST applies to a new condo in a way a resale usually does not. Whether the price is HST-included, and whether you qualify for a new-housing rebate, is in the agreement and the rebate paperwork. Do not assume the listing price already netted it.

Adjustments on a builder deal are where money hides: development charges, levies, hydro meters, Tarion enrolment passed through. The cap, if there is one, is a clause. No cap means the number can move between the day you signed and the day you take title.

All-inclusive legal fees on a residential purchase start at $2,299 plus HST. A pre-construction file has occupancy and final closing on it. That is still the legal bill, not the occupancy fee and not the tax. Most of the signing is remote.

Frequently Asked Questions (FAQ)