Buying a pre-construction condo is one of the more popular choices for young consumers hoping to enter the incredibly expensive markets in some of Canada’s cities. But when the years of building are finally up and you can finally move in, that doesn’t mean you necessarily own the condo immediately. There is an interim occupancy period between the date you are allowed to move in and the date the condo sale closes and ownership fully transfers to you, and you should be ready for the fees that come with it.
What is it? Just because your condo is move-in ready, that doesn’t mean the condo sale is complete. The interim occupancy period is the period of time (months, usually) where ownership of the condo can’t be transferred to the buyers from the builder because it can’t be registered with local municipality until the condo is complete.
Why does it exist? Since condos on the lower floors will be completed much earlier than condos on the higher floors, it wouldn’t make sense for the builder to keep those on the lower floors from moving in until the top floors are completed. So, this period allows every owner to move into their new home as soon as possible, even though they technically won’t own it until the building is entirely finished.
The lower the floor, the sooner your interim occupancy date will be, and the longer the period will be. Those on the top floors will likely have a short interim occupancy period, from waiting longer to be able to move in. The interim occupancy fee is the fee owners pay to the building during this period—whether you move into your unit or not—so it is ideal to close on your current home as close as possible to this date to avoid paying for two homes at the same time. While the fee isn’t as much as you’d be paying once the building sale closes, this money does not reduce the price you pay for the condo, so it’s ideal to have a short interim occupancy period.
How to prepare for it. Make it a point to save up for this expense while you are waiting for the building to be completed. Separate it from your other savings so you know it will be there when you need it. Try to coordinate the sale of your current home with the timing of your move-in date, if possible. If your unit is on a lower floor and there are any delays, you could be paying this fee for up to 18 months. Make sure to review the purchase agreement with your lawyer so you know what to expect in terms of fees.
