Taking possession of your condominium

By Jacqueline Moneta, JD and Jayson Schwarz, LLM
August 06, 2019

Despite the excitement of getting handed the keys to your new condominium, many new purchasers of new development condominiums are surprised to find out that title to their property may not be transferred at the same time. New construction condominiums in Ontario have two closings: The interim occupancy closing, and the final closing.

INTERIM OCCUPANCY CLOSING

When you buy a new development condominium, you may be required to take possession before construction is complete on some of the units or after completion but before registration. This is called interim occupancy and it is governed by the Condominium Act (the “Act”).

As buildings become ready for occupancy, the builder will advise you of your interim occupancy date. Once the interim occupancy date arrives, you must take occupancy. However, it is important to understand that you don’t own the unit until final closing; you are in effect a tenant in your soon-to-be-owned unit.

Ownership can only be transferred if the condominium has been registered on title, which occurs once the majority of units are occupied. Interim occupancy periods can be a few weeks or a month, or up to years. All is dependent on the completion of construction, and occupancy depends on how quickly construction is complete on all units.

INTERIM OCCUPANCY FEES

During the interim occupancy period, you must pay your builder or seller 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 (set out in the Act and Regulations thereto); estimated monthly municipal taxes for the unit; projected common expense fees for the unit.

DELAYED OCCUPANCY

Construction can sometimes be unpredictable and this could result in delays in condominium development projects, and you may be unable to move into your unit as expected or close within the time frames set forth in the Agreement of Purchase and Sale (“APS”). Your APS must include a Tarion Addendum that sets out important dates for your agreement, including your occupancy date. These are set out in the statement of critical dates. You need to determine when you are buying whether you are buying with a Firm or a Tentative Closing Date. There are two addendums available from Tarion: READ THEM CAREFULLY, as they set forth exactly what can happen and what delays can accrue if any.

Delays can affect financing, accommodation notices, budget, etc. In this market, you need to be prepared to deal with the results if an extension occurs. If the builder complies with Tarion, you will have no remedy to compensate yourself for the inconvenience or the additional expense. The consequence of these delays can be quite upsetting. I recommend that everyone buying a new home prepare himself or herself when they make the original offer and continuously thereafter, for extensive delays and that way, you face no surprises.

Remember, most builders want to give you what you contracted for and will work with you to achieve mutual satisfaction. In closing, please use your lawyer to the fullest extent, and remember, only your lawyer can give you legal advice.

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