When you buy a new condominium, you can sometimes move in before construction of all the units has been completed.
This can happen particularly if your unit is closer to the ground floor and is finished first. This is called interim occupancy and it is governed by the Condominium Act.
As your building nears completion, your vendor will advise you of your interim occupancy date. Once the interim occupancy date arrives, you can live in your unit. But it’s important to note that you don’t own it yet.
That’s because ownership of your unit can only be transferred to you if the condominium has been registered with the municipality. And it can only be registered with the municipality once all the construction is complete.
The period from your interim occupancy date to the date ownership is transferred to you is called your interim occupancy period.
Interim occupancy periods can be relatively short (perhaps a few weeks or a month), or lengthier (up to a year or more). This depends on when all construction will be completed.
Are you aware that you must pay an interim occupancy fee?
During the interim occupancy period, you must pay your builder or vendor an interim occupancy fee, whether you move into the unit or not.
The monthly interim occupancy fee is based on the:
- interest (calculated on a monthly basis) on the unpaid balance of the purchase price at the prescribed interest rate
- estimated monthly municipal taxes for the unit
- projected common expense fees for the unit.
In general, shorter interim occupancy periods are better for condominium buyers because you can avoid paying interim occupancy fees.
When evaluating potential condominiums to purchase, you should consider whether a builder has had lengthy interim occupancy periods for other projects.
Once the interim occupancy period ends and ownership of the unit is transferred, you may be owed money if your builder collected more money for property tax than the actual property tax amount. Alternatively, you may owe your builder money if they collected less property tax than the actual amount that was charged by the municipality.