The 3 Parts of an Occupancy Fee

If you've worked on a true pre-construction purchase, you know some deals (especially condos) have 2 closing dates:

The Occupancy Closing and the Final Closing.

The Occupancy Closing is when the buyer can take possession. They get the keys and live in the unit, but they don't legally own it yet. Title stays with the builder, and neither the buyer nor their lender has paid the full purchase price.

Final Closing happens once the building registers as a condominium. That's when title transfers and the mortgage funds.

The time in between is interim occupancy. It can last a few months or more than a year, depending on the project. And the purchaser becomes something like a tenant.

During that period, they pay the builder a monthly Occupancy Fee.

And while that fee often seems confusing and high to clients, it's easier to understand once you know what it's made up of.

1. Interest on the unpaid balance
   
   The builder hasn't been paid in full yet. So, the unpaid balance is the purchase price minus the deposits already paid.
   
   The buyer pays interest on that balance at the Bank of Canada's reported rate for a one-year conventional mortgage.
   
   For reference, that is 5.49% as of September 9, 2026.
   
2. Estimated property taxes
   
   The unit doesn't get its own tax assessment until the building registers. Until then, the builder charges a monthly estimate.
   
   Any difference between the estimate and the actual taxes is sorted out in the final closing adjustments.
   
3. Projected common expenses
   
   This is the unit's share of the building's monthly costs, taken from the budget in the disclosure package.
   
   It's roughly what the buyer will pay in maintenance fees once they own the unit.

– – –

All together, the fee looks a lot like the monthly cost of owning the unit.

The difference is that none of it goes toward the purchase price. It doesn't reduce the balance, and no equity is being built.

And a builder can't charge more than the total of these 3 things. That comes from s.80(4) of the Condominium Act.

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