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When you buy a condo unit at pre-construction stage, you have to wait for some time for your unit and some parts of the building to finish and get ready for occupancy. After waiting, receiving the keys to your brand new home will certainly be very exciting! Before you move in to your new condo unit, here are important things you should know about interim occupancy.

What is interim occupancy and what happens during this period?

Interim occupancy is different from closing in that interim occupancy allows you to move into your condo unit, but you don’t own it yet. The builder will inform you of the interim occupancy start date once your unit is ready. This period might run for a few months depending on how fast the building reaches full completion and is registered.

Before the builder hands over the keys to you, they will conduct pre-delivery inspection or PDI along with the purchaser. The purpose of PDI is to go through items in the unit that are deficient in any way such as scratches, dents or any structural issues. The builder will then make sure to have these deficiencies corrected before you move in.

What charges to expect?

While living in your new condo unit, you will have to pay for “occupancy fees” to the builder up to the closing date. This fee or “rent” is a monthly payment to the builder and it includes the builder’s interest divided amongst the purchasers, maintenance costs and taxes. You will be paying a monthly fee to the builder.

Interim occupancy vs. Final closing

            Interim occupancy is a temporary phase when you can start living in your unit but you are not yet the owner of it. It is in the final closing when you will be given full ownership of the unit under your name. In interim occupancy, you pay monthly fees to the builder. After the final closing, this monthly fee stops instead you will start paying for your mortgage.

Is condo assignment possible during this period?

You have to review the assignment conditions in the contract or purchase agreement. If a builder allows condo assignment, there might be a legal fee that comes with it. But since you are not yet the official owner of the unit, you can assign your original agreement with the builder instead. You will become the assignor and the one you assign your contract to will be the assignee.

Can condo unit be rented out?

During this period, the builder is still the owner of your unit. If you want to rent out your unit during interim occupancy, you will have to review first the purchase agreement and ask for building’s permission in leasing your unit. Leasing your unit might also make your HST rebate complicated since you will have to apply for it as an investor not as resident.

Now you have basic knowledge about interim occupancy. It will be a good idea to start preparing for costs to be expected during this period. Ideally, shorter occupancy period is better since you will pay less on fees. Usually, higher floors will get shorter occupancy period.
 

If you have any questions about this or looking to purchase a pre-construction condo, I would be happy to help. Contact me at 647-834-9928 or send an email to [email protected]