Interim Occupancy vs Final Closing, your questions answered
With Interim Occupancy set for Fall 2015 for Tao Boutique Condos, we’ve had some recurring questions from our purchasers that we would like to address: What is the difference between Interim Occupancy and Final Closing? And, what is the Occupancy Fee and what does this fee include?
Newly built condominiums have two “closings”. The interim occupancy or interim closing date which is set by the builder, and the final closing which occurs at the time of registration. Let’s take a look at the difference between the two and what this means for you.
When purchasing a new condo, there is a period of time between the day you take possession of your unit and when you take ownership. This is known as interim occupancy.
Once your unit is ready and liveable and the Municipality grants the builder permission, you will be able to occupy or take possession of your unit. Although you will be required to live in your unit you will not actually own it yet. Also during this period the building may not be entirely finished.
Prior to your Occupancy date your Solicitor will notify the utilities companies of the interim closing date so they can arrange for a meter reading and changeover of utilities applicable to the unit (gas, electricity, water and taxes). It’s also during this period when the deposit for interim closing is due, as per your Agreement of Purchase and Sale. Your solicitor will also review the financial documents for the interim closing, sign the interim occupancy agreement and notify you when you can pick up your keys.
There is no way to say with certainty how long the occupancy period will be, but it normally lasts several months. During this period you must pay the builder an Occupancy Fee.
The amount of the Interim Occupancy Fee is based on three things:
1. Interest on Unpaid Balance of Purchase Price (the rate is protected under the Condominium Act)
2. Estimate of Common Elements Fee
3. Estimate of Property Taxes (apportioned monthly).
The interim occupancy fee does not accrue to the mortgage, and it’s like a rent you pay the builder for the right to live in the unit.
The occupancy period ends when the condominium is registered with the Land Registry Office and you receive the title to your property. This is also when you start paying your mortgage. Once the condominium is registered you must pay the balance of the purchase price together with any adjustments. You will then receive the ownership of the condominium and will be able to register your mortgage against the condominium and receive the money you have borrowed.
As mentioned previously, there is no telling how long the Interim Occupancy period will last. At SigNature Communities, we will strive to register the condominium as quickly as possible, as it has been our goal from the beginning to ensure a successful ownership experience.